Exposure draft legislation on the design of the expanded RET
scheme has been released for public comment. Legislation to
implement the scheme will be in place by mid 2009 and commencing in
What is the RET scheme?
The RET scheme is an expansion of the MRET scheme (which
includes a legislated target of 9,500 gigawatt hours (GWh) in
2010). The RET scheme includes a target to source 45,000 GWh in
2020, designed to deliver the Federal Government's commitment
that at least 20% of Australia's electricity supply is to be
generated from renewable sources by 2020.
The RET scheme is being designed in co-operation with the states
and territories through the Council of Australian Governments
(COAG) and brings the existing MRET scheme and existing state based
targets into a single national scheme.
Changes to the target and scheme length
The design includes a ramp-up of annual targets commencing in
2010 and peaking at 45,000 GWh in 2020. This target will be phased
down from 2025 and will terminate at the end of 2030.
Other changes to the scheme
Multiplier for Renewable Energy Certificates created by small
A transition is proposed from the rebate under the Solar Homes
and Communities Plan to a multiplier under the RET scheme. The
multiplier is to be applied to Renewable Energy Certificates (RECs)
created by micro-generation units (including household solar
From 2009, the multiplier will decrease over time from five RECs
for every megawatt hour (MWh) of deemed renewable energy generation
to one REC for every MWh of deemed renewable energy generation, so
that by 2015 there will be no multiplier.
For each micro-generation system, the multiplier applies only to
the first 1.5 kilowatts of system capacity, for bigger systems,
only one REC can be created for each deemed MWh.
The RET scheme is to be reviewed in 2015. The terms of reference
for the review have not been outlined.
Design aspects that are unchanged
Project eligibility periods
All projects would be able to create RECs until the RET scheme
expires (this is consistent with the current approach under the
Treatment of existing generators
All existing projects eligible under the MRET scheme will be
eligible to participate in the RET scheme for the life of the RET
scheme. The current baselines above which existing projects are
able to create RECs under the MRET scheme remain.
The same eligibility criteria as under the current MRET scheme
applies, including solar hot water heaters and native forest wood
Banking of RECs
The banking of RECs is permitted for the life of the RET scheme
without restriction (this is consistent with the current approach
under the MRET scheme).
Design aspects still to be considered
The treatment of electricity-intensive, trade-exposed
A decision is yet to be made as to whether certain
electricity-intensive, trade-exposed industries may be excluded
from liability under the RET scheme. This will be considered in
detail following stakeholder consultations. Provisions to implement
the decisions made will be included at a later date.
Setting the level of the shortfall charge
This will be set at a level marginally above the projected peak
REC price to encourage compliance with the target as opposed to
opting to pay the shortfall charge. The level will be finalised
once the final design of the RET scheme has been completed by COAG.
Similarly to the current approach, the penalty will not be indexed
Transitional arrangements for the Victorian Renewable Energy
The Commonwealth and Victorian Governments are working closely
to finalise the arrangements for transition from the Victorian
Renewable Energy Target (VRET) scheme into the national RET scheme
by early 2009.
Interested stakeholders are invited to provide comments on the
exposure draft legislation by Friday 13 February 2009 to
email@example.com or Joelle Richardson, Renewables, Offsets
and COAG Branch, Department of Climate Change, GPO Box 854,
Canberra ACT 2601.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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