Strong support for renewable energy industry
21 November 2005
Media release
Wholesale electricity purchasers have strongly supported the growing renewable energy industry for the fourth year in a row, by surrendering renewable energy certificates (RECs) rather than pay the renewable energy shortfall charge.
The Australian Government's Renewable Energy Regulator today released details of the RECs surrendered under the Act for the 2001 to 2004 compliance years.
Under the Renewable Energy (Electricity) Act 2000 (the Act) some wholesale purchasers of electricity (liable parties) must contribute towards the generation of additional electricity to reach the target of 9.5 million megawatts per hour (MWh) by 2010.
Each year, liable parties surrender RECs in proportion to the amount of electricity they purchase.
The scheme was introduced by the Australian Government to encourage the additional development and generation of renewable energy within Australia. The renewable energy requirement for 2004 was 1.25 per cent of liable energy throughout Australia.
For 2004 the target was 2.6 million MWh of renewable energy. The annual targets are continually rising until 2010 when the peak level is reached and they continue at the peak level of 9.5 million MWh until 2020.
"Over the past four years the number of companies choosing to meet the renewable energy target requirements by surrendering RECs rather than paying renewable energy shortfall charge has increased markedly," said the regulator, Mr David Rossiter.
"In 2001, the first year of operation, just over 92 per cent of compliance was by REC surrender. For 2004 compliance exceeded 99.8 per cent, which is very good news for the renewable energy industry as RECs directly assist developers of additional renewable energy in Australia. This high level of compliance maximises support for the renewable energy industry."
For the 2004 compliance year all but six liable parties fully met their liability under the Act by surrendering RECs rather than paying a renewable energy shortfall charge. Several liable parties who had shortfalls in earlier years made up their shortfalls by surrendering additional RECs. The six liable parties with a shortfall of 2,827 RECs are: Aurora Energy Pty Ltd, Bulwer Island Energy Partnership, Newmont Mining Services Pty Ltd, Perth Energy Pty Ltd, Victoria Electricity Pty Ltd (Victoria Electricity) and Yamasa Australia Pty Ltd.
For the first four compliance years about 5.76 million RECs have been surrendered to the Office of the Renewable Energy Regulator, slightly below the 5.8 million cumulative mandated target.
Media Contact:
David Rossiter 0408 276 214
Background
The Act requires wholesale purchasers of electricity (liable parties) to proportionately contribute towards the generation of additional renewable electricity to reach the target of 9.5 million MWh by the year 2010. Each year most wholesale purchasers of electricity demonstrate their support of electricity generated from renewable energy sources by surrendering RECs in proportion to the amount of electricity they purchase.
The renewable electricity requirement for 2004 was 1.25 per cent of liable electricity throughout Australia. The annual targets are progressively rising until 2010 when the peak level is reached and they continue at the peak level of 9.5 MWh until 2020. For 2005 the target requirement is 1.64 per cent of liable electricity and for 2006 the target has been proposed at 2.17 per cent. Liable parties that fail to surrender RECs must pay the renewable energy shortfall charge of $40 for each REC not surrendered.
RECs can be created from eligible Renewable Power Stations, small generation units and solar water heaters. One REC represents one megawatt hour (MWh) of renewable electricity generated above a power station's baseline, if applicable, or one MWh of electricity displaced in the case of a solar water heater.
Prior Year Shortfalls Still Outstanding
For 2001 the number of companies carrying renewable energy shortfall charge shortfalls (shortfalls greater than 10 per cent of the company's 2001 total wholesale electricity purchase) and REC shortfalls (shortfalls within 10 per cent of the company's 2001 total wholesale electricity purchase which can be carried forward to the next compliance year) has fallen to five. The total shortfall for 2001 is now only 373 RECs for the year. The following companies are still showing shortfalls:
Bulwer Island Energy Partnership, NT Power Generation Pty Ltd, Redbank Project Pty Limited (Redbank Power), Synergen Power Pty Ltd and Yamasa Australia Pty Ltd.
Outstanding shortfalls for 2001 can no longer be redeemed but for later years (2002, 2003 and 2004) the three year redemption period has not yet closed.
For 2002 the number of companies carrying shortfalls has fallen to three, with a total shortfall of 40 RECs for that year. The companies are:
Bulwer Island Energy Partnership, Redbank Project Pty Ltd (Redbank Power), and Yamasa Australia Pty Ltd.
For 2003 the number of companies carrying shortfalls has fallen to four, with a total shortfall of 1,638 RECs for that year. The companies are:
Aurora Energy Pty Ltd, Bulwer Island Energy Partnership, Perth Energy Pty Ltd and Yamasa Australia Pty Ltd.
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