The MRET scheme will increase to ensure that 20 percent
of Australia's electricity is sourced from Renewable Energy by
The Commonwealth Government's commitment to expand renewable
energy to 20 percent of Australia's electricity supply is in
the process of being implemented through the release of the
Renewable Energy (Electricity) Amendment Bill 2008 exposure draft.
The increase in the national target will coincide with the
phase-out of a number of state-based schemes also designed to
increase renewable energy capacity.
The Bill will amend the Mandatory Renewable Energy Target of
2001 (MRET) by significantly increasing the renewable energy target
(RET), starting from the year 2010. The scheme aims to increase the
new renewable energy supply from a target of 9,500 GWh to 45,000
GWh in 2020. The expanded scheme will now expire in 2030 rather
than the previous date of 2020. The RET scheme sets annual interim
targets that ramp up to 45,000 GWh in 2020, the initial ramp up is
slower between 2009 and 2014 and then accelerates to 2020. From
2024 to 2030 the scheme targets reduce to 23,000 GWh when the
For Queensland electricity consumers there are now three
potential schemes designed that on the electricity price: the
Carbon Pollution Reduction Scheme (CPRS), Renewable Energy Target
and the Queensland 18 percent Gas Scheme. The CPRS White Paper has
stated that the Queensland Gas Scheme should be phased out with the
introduction of Emissions Trading, however this has not yet been
put into place through legislation.
Carbon Pollution Reduction Scheme
The increased targets are designed to be complementary to the
CPRS goal of reducing carbon pollution. The administration of the
scheme will come under the same regulator as the CPRS and the NGER
Trade Exposed Industries
The recent CPRS White Paper outlined a process for assistance to
emissions intensive trade exposed industries (EITE). While the
original MRET scheme provided for no assistance to such industries,
there is a proposal to provide assistance to industries that will
be materially impacted by the RET scheme. The level and form of
assistance is the subject of a discussion paper currently under
review. Assistance will only be provided for the impact of the
increased targets and will not cover the original scheme
Assistance will not automatically be provided to those
industries that qualify for assistance under the CPRS. Only
industries that are classed as "Renewable Energy Target
Affected, Trade Exposed (RATE)" will qualify. RATE industries
are likely to be high-intensity electricity consumers such as the
aluminium and steel industries.
The draft bill and emissions intensive discussion paper are open
for public comment until February 13. Passage of the bill is
expected to take place by mid-2009 with a start date of the amended
scheme on 1 January 2010. The first obligation to surrender
Renewable Energy Certificates will not occur until early 2011.
The electricity sector is experiencing rapid change in a number
of regulatory areas. It is important for participants to be up to
date with the impacts of these changes. In particular any contracts
that have covered obligations under the original MRET or Queensland
Gas Scheme should be reviewed.
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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