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Amar Rathore, General Manager RET Market Operations Branch, Clean Energy Regulator delivered this presentation at the Remote Area Power Supply Conference. The conference brings together remote communities, mine sites and industrial operations and the renewable energy sector to outline the opportunities and barriers for solving off-grid energy challenges with renewable and hybrid energy solutions. For more information, please visit http://www.informa.com.au/remotepower
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Incentives for renewable generation under the Renewable Energy Target Amar Rathore - General Manager Remote Area Power Supply Conference, 17 to 18 March 2014
Overview
• About the Renewable Energy Target (RET) • The Large Scale Renewable Energy Target: supply and demand • The Small-scale Renewable Energy Scheme: supply and demand • The RET Review
About the Renewable Energy Target
Legislated objectives
• To encourage additional generation of electricity from renewable sources
• To reduce emissions of greenhouse gases in the electricity sector
• To ensure that renewable energy sources are ecologically sustainable
About the Renewable Energy Target
• Incentive for investment through creation and sale of renewable energy certificates – One certificate represents one megawatt hour (MWh) – Large-scale Renewable Energy Target (LRET): large-scale
generation certificates (LGCs) – Small-scale Renewable Energy Scheme (SRES): small-scale
technology certificates (STCs) • Liable entities (mostly electricity retailers) purchase certificates
The scheme is designed to generate an additional 41,000 gigawatt hours of electricity from renewable energy sources by 2020.
Renewable Energy Target market mechanism
What is the REC Registry?
• Facilitates the creation, registration, auditing, transfer and surrender of large-scale generation certificates and small-scale technology certificates
Renewable Energy Target market mechanism: supply
Renewable energy power stations
• Accredited power stations may create large-scale generation certificates (LGCs) for additional renewable energy generation above the baseline. – One LGC equals one megawatt hour
• To apply for accreditation under the Large-scale Renewable Energy Target a power station must: – generate some or all electricity from an eligible renewable
energy source – meet requirements as specified by the Act, such as operate in
accordance with Commonwealth, state and local government planning/approval requirements
Eligible renewable energy sources
1. Hydro 2. Wave
3. Tide 4. Ocean
5. Wind 6. Solar
7. Geothermal-aquifer
8. Hot dry rock 9. Energy crops
10. Wood waste 11. Agricultural waste
12. Waste from agricultural products
13. Food waste 14. Food processing waste
15. Bagasse
16. Black liquor 17. Biomass-based components of municipal
solid waste 18. Landfill gas 19. Sewage gas and biomass-based
components of sewage 20. Waste coal mine gas
Accredited renewable energy power stations
Renewable energy source ACT NSW NT Qld SA Tas Vic WA Total Agriculture, food and agriculture waste 0 6 1 2 0 1 2 2 14
Bagasse co‑generation, energy crops 0 3 0 23 0 0 0 1 27
Black liquor 0 1 0 0 0 0 1 0 2
Hydro 1 31 - 10 1 34 21 3 101
Landfill Gas 2 16 1 14 4 3 13 9 62
Sewage gas and biomass‑based 0 9 0 4 0 1 4 1 19
Solar 4 16 13 11 5 1 8 10 68 Waste coal mine 0 4 0 3 0 0 0 0 7 Wind 0 9 1 3 17 9 18 21 78 Wood waste 0 6 0 4 1 1 3 1 16
Total(1) 7 101 16 74 28 50 70 48 394
Data accurate at 31 December 2013 (1) Certain power stations are accredited for multiple fuel sources
Additional renewable energy generation under LRET
*Actual generation from biomass is small relative to capacity as many of these accredited power stations do not operate at a high capacity. (Sugar Industry) LGCs shown in the graph include LGCs generated from sugar mill fuel sources such as bagasse, bagasse co-generation, biomass-based components of municipal solid waste energy crops, wood waste and black liquor. LGCs shown in the above chart are generated from eligible/ renewable sources above the relevant electricity power baseline.
Large-scale renewable energy investment
End 2011 End 2012 End 2013
Total estimated investment in renewable power stations *
$10.5 billion $10.6 billion $14.3 billon
Number of accredited power stations
335 368 394
Estimated generation capability of accredited power stations
13,500 GWh per year
16,200 GWh per year
17,300 GWh per year
Equivalent supply of electricity
2.0 million households
2.5 million households
2.7 million households
*estimated based on data provided to the Clean Energy Regulator ^ Based on average household electricity use of 6.57 megawatt hours per year (Source: ABS)
Renewable Energy Target market mechanism: demand
Large-scale Renewable Energy Target Demand Year Target (GWh) Renewable power
percentage (RPP) 2001 300 0.24% 2002 1,100 0.62% 2003 1,800 0.88% 2004 2,600 1.25% 2005 3,400 1.64% 2006 4,500 2.17% 2007 5,600 2.70% 2008 6,800 3.14% 2009 8,100 3.64% 2010 12,500 5.98% 2011 10,400 5.62% 2012 16,673 9.15% 2013 19,088 10.65% 2014 16,950 9.87%
Acquitting annual liability: large-scale generation certificates
• The amount of liable electricity acquired (MWh) is multiplied by the renewable power percentage
• This calculates the number of LGCs a liable entity must purchase and surrender
• A $65 shortfall fee per LGC applies if a liable entity fails to surrender the required amount of LGCs
Partial exemption certificates (PECs)
• Partial exemption certificates are provided in relation to liable electricity consumed for an emissions-intensive trade-exposed (EITE) activity.
• The level of partial exemption is based on the industry-average electricity intensity.
• The EITE activities which have received the most partial exemption for 2013 are: 1. Aluminium smelting 2. Petroleum refining 3. Smelting zinc
Renewable Energy Target market mechanism: supply
Small-scale system eligibility
The system must: • a small generation unit must have a capacity of no more than 100
kilowatts for solar PV, 10 kilowatts for wind and 6.4 kilowatts for hydro. Larger systems must apply for accreditation as power stations solar water heater or air source heat pump systems must be listed on the Register of solar water heaters to be eligible for STCs
• be installed by a CEC accredited installer, in accordance with local, state and federal installation requirements and guidelines, including safety.
• have STCs created within 12 months of the installation date.
Small-scale system deeming
Deeming • The amount of STCs a system may be eligible for is based on its
deemed amount of renewable energy generates or displaces over the course of its lifetime – this is up to 15 years for small generation units and up to 10 years for solar water heaters
• The system’s kilowatt capacity and geographic location (postcode) is used to calculate the deemed amount of electricity generated or displaced by small generation units and solar water heaters respectively
Small-scale system installations Installation quantity
Rated output (kW)
Solar photovoltaic (PV) panels 1,189,902 3,218,286
Wind 380 1,362
Hydro 15 22
Air source heat pumps 174,532 n/a
Solar water heaters 675,096 n/a
Total 2,039,925 3,161,202
Data correct as at 1 March 2014 Note: These numbers will increase as certificates can be created up to 12 months after the date the system was installed.
Renewable Energy Target market mechanism: demand
Small Technology Percentage: demand
Year
The estimated number of STCs
created (A)
Number of STCs estimated above the previous target
(B)
SRES target Equals (A) + (B)
Small-scale technology percentage
2014 16,708,470 + 1,948,868 18,657,338 10.48%
2013 20,700,000 + 15,000,000 35,700,000 19.70%
2012 22,306,000 + 22,480,000 44,786,000 23.96%
2011 28,000,000 N/A 28,000,000 14.80%
Acquitting liability: small-scale technology certificates
• The amount of liable electricity acquired (megawatt hours) is multiplied by the small-scale technology percentage
• This calculates the number of STCs a liable entity must purchase and surrender each quarter (28 April, 28 July, 28 October and 14 February)
• A $65 shortfall fee per STC applies if a liable entity fails to surrender the required amount of LGCs
• Liable Entities that do not surrender the required amount of STCs, must pay a small-scale technology shortfall charge of $65 for each STC not surrendered
RET Review
• The Australian Government announced the review of the Renewable Energy Target scheme by an expert panel on 17 February 2014.
• The panel will undertake public consultations and seek submissions before reporting to Government by mid-2014.
• Until the 2014 review is complete and any consequent legislative amendments are in place we will continue to administer the Renewable Energy (Electricity) Act 2000 and other associated legislation.
• More information about the 2014 RET Review, including the Terms of Reference can be found on the Department of the Prime Minister and Cabinet website www.retreview.dpmc.gov.au.
• 394 renewable energy power stations are accredited under the Renewable Energy Target, with an estimated generating capacity is over 17,300 gigawatt hours each year
• More than two million small-scale systems have been installed under the scheme
• Liable entities are highly compliant with over 99.5% compliance through certificate surrender rather than shortfall charge
What the Renewable Energy Target has achieved
Questions