RET Costs - All Energy HQ

How much does the "RET" cost the average family

RET-Costs-Graphic

Graphic supplied by Greenbank Environmental

What is RET?

RET refers to Australia’s Renewable Energy Target which was implemented by the Australian Federal Government in August 2009. The RET is designed to deliver on the Government’s commitment to ensure that 20 per cent of Australia’s electricity supply will come from renewable sources by 2020. The RET expands on the previous Mandatory Renewable Energy Target (MRET), which began in 2001.

To power our homes and businesses, Australia generates electricity from coal and gas fired power stations, as well as a range of renewable energy sources including large-scale hydropower facilities and wind farms, and small-scale solar hot water and solar rooftop panels.

The Renewable Energy Target is an Australian Government scheme designed to reduce emissions of greenhouse gases in the electricity sector and encourage the additional generation of electricity from sustainable and renewable sources.

The Renewable Energy Target works by allowing both large renewable power stations and the owners of small-scale systems to create renewable energy certificates for every megawatt hour of power they generate. Certificates are then purchased by electricity retailers who sell the electricity to householders and businesses. These electricity retailers also have legal obligations under the Renewable Energy Target to surrender renewable energy certificates to the Clean Energy Regulator, in percentages set by regulation each year. This creates a market which provides financial incentives to both large-scale renewable power stations and the owners of small-scale systems.

In the case of small-scale systems, all renewable energy certificates are provided ‘up front’ for the systems’ expected power generation or displacement over a 15 year period. Generally, householders who purchase these systems assign the right to create their certificates to the seller in return for a lower purchase price. The level of this benefit differs across the country depending on the level of solar radiation.

How the Renewable Energy target works

The Renewable Energy Target has two core components: the Large-scale Renewable Energy Target and the Small-scale Renewable Energy Scheme. The Large-scale Renewable Energy Target is designed to deliver the majority of the 2020 target, while the Small-scale Renewable Energy Scheme supports the installation of small-scale renewables, such as household solar rooftop panels and solar hot water systems.

The Renewable Energy Target operates through the creation of tradable certificates. Certificates are created and issued through the Renewable Energy Certificate Registry (REC Registry), an online trading platform managed by the Clean Energy Regulator.Infographic_howtheRETworks

Through the scheme, large renewable power stations and the owners of small-scale systems are eligible to create renewable energy certificates for every megawatt hour of power they generate. Certificates are then purchased by electricity retailers who sell electricity to householders and businesses. These electricity retailers also have legal obligations under the Renewable Energy Target to surrender renewable energy certificates to the Clean Energy Regulator, in percentages set by regulation each year. This system creates a market that provides financial incentives to both large-scale renewable power stations and the owners of small-scale systems.

The number of certificates issued to an individual or business is determined by the amount of electricity generated or displaced by an eligible system. Eligible systems may include renewable energy power stations, small-scale solar panels, wind and hydro systems, or solar water heaters and heat pumps.

Certificates are traded and paid at a rate determined by supply and demand of the market. For more information about certificates and how they work, see certificates.

As part of the Renewable Energy Target, liable entities (usually electricity retailers) must also source a proportion of the electricity they supply from renewable sources. This is called the renewable power percentage.

To meet the requirement of the renewable power percentage, liable entities must purchase and surrender a certain amount of these certificates to the Clean Energy Regulator each year. The number of certificates they are required to surrender represents the amount of electricity they sell to their customers which has been generated from renewable sources. This process also helps to achieve the Large-scale Renewable Energy Target of 41,000 gigawatt hours by 2020.

Since 2001, the Renewable Energy Target has increased the number of installations of small-scale renewable energy systems, and successfully stimulated investment in renewable energy power stations.

There are currently more than 15 different types of renewable energy sources being used in accredited power stations including solar energy, wind, ocean waves and the tide, geothermal-aquifers, wood waste, agricultural waste, bagasse (sugar cane waste), black liquor (a by-product of the paper-making process), and landfill gas.

Infographic_howtheRETworks

All information (RET) displayed on this page has been sourced directly from the Australian Government Website – Clean Energy Regulator

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