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Renewable Energy Target

The Renewable Energy Target aims to encourage new investment in renewable energy and reduce greenhouse gas emissions in the electricity sector. It does this by providing incentives in the form of renewable energy certificates, which helps drive investment in the sector. It operates on a calendar year basis and has two parts:

  • Large-scale Renewable Energy Target—This requires Australia to generate an additional 33,000 gigawatt hours of electricity from sustainable, renewable sources by 2020, compared with 1997 levels. It encourages companies to invest in new large-scale renewable energy power stations, including solar and wind farms, hydro and biomass power stations.
  • Small-scale Renewable Energy Scheme—This creates incentives for households and businesses to install small-scale systems including solar panels, solar water heaters, small-scale wind or hydro systems and air source heat pumps.

The scheme creates a market for renewable energy certificates, which drives investment in the renewable energy sector.

Accredited power stations

In 2019–20, we continued to see strong investment in large-scale renewable energy, with 374 new power stations accredited under the scheme, an 8 per cent increase on 2018–19. The total capacity of renewable energy power stations is also increasing, with 4349 megawatts capacity accredited during 2019–20. This included the accreditation of the 532 megawatts for Stockyard Hill Wind Farm in Victoria, the largest accredited wind farm in Australia. This brings the total number of accredited renewable power stations to 1610, with a total capacity of 24,908 megawatts. Wind continues to generate the most capacity of all energy sources, accounting for 53 per cent of renewable capacity.

Table 4: Accredited power stations by energy source and capacity, 2019–20

Energy source

Number

Capacity (megawatts)

Solar

358

2028.6

Wind

12

2311.3

Biomass

3

8.3

Hydro

1

0.9

Total

374

4349.1

2020 Large-scale Renewable Energy Target capacity achieved

Large-scale renewable investment continued to grow with 4.3 gigawatts of new capacity accredited in 2019–20.

In September 2019, we announced enough capacity had been accredited to meet the 2020 Large-scale Renewable Energy Target.

As at 30 June 2020, Australia had 24.9 gigawatts of accredited large-scale capacity under the Large-scale Renewable Energy Target, with another 5.2 gigawatts in our pipeline. This included 2.9 gigawatts that had reached financial close, and 2.3 gigawatts with power purchase agreements.

Figure 5: Progress towards the 2020 Renewable Energy Target Figure 5 shows accredited capacity under the Large-scale Renewable Energy Target is 10.7 gigawatts, committed capacity is 2.9 gigawatts and probable capacity is 2.3 gigawatts from January 2016 to June 2020.

Small-scale renewable energy systems

Momentum in the Small-scale Renewable Energy Scheme also continued in 2019–20, with Australian businesses and households installing 352,192 small-scale renewable energy systems (Table 5). This includes the installation of 297,025 small generation units (small-scale solar PV, wind and hydro systems) with a capacity of 2294 megawatts, which is a 23 per cent increase on installed capacity in 2018–19. This brings total cumulative capacity under the Small-scale Renewable Energy Scheme to 11,427 megawatts at the end of 2019–20. During this period, small-scale renewable energy systems generated or displaced 17.8 million megawatt hours of electricity.

Table 5: Small-scale renewable energy systems validated, as at 30 June

Solar PV

Solar
water heater

Air source heat pump

Wind

Hydro

Total

Capacity
(megawatts)

2019–20

297,024

34,812

20,355

1

0

352,192

2294

Cumulative total (since 2001)

2,466,615

967,263

282,847

424

18

3,717,167

11,427

Renewable energy certificates

In 2019–20:

  • We validated 30,496,990 large-scale generation certificates compared with 26,250,722 validated in 2018–19, as a result of an increase in electricity from renewable sources. Each certificate represents one megawatt hour of renewable energy generation.
  • We validated 40,267,622 small-scale technology certificates1, compared with 33,265,332 validated in 2018–19. This was due to higher volumes of solar PV systems installed and an increase in the average capacity of these systems.

At 30 June 2020, more than 50 per cent of small-scale technology certificate applications used solar panel validation, resulting in processing within 24 hours, compared with four to six weeks for non-solar panel validation applications. For more information on solar panel validation see Maturing our approach to compliance.

We publish details about the operation of the Renewable Energy (Electricity) Act 2000 in annual administrative reports, as required by the legislation.

Small-scale Renewable Energy Scheme inspections program

Each year, we inspect a statistically significant sample of small-scale solar panel systems to check conformance with the relevant Australian standards, including state and territory electrical safety standards, and compliance with Small-scale Renewable Energy Scheme eligibility requirements.

Our role is to ensure the integrity of the Small-scale Renewable Energy Scheme by providing the results of unsafe and substandard inspections to the relevant state and territory electrical safety regulators that are responsible for electrical safety. We also provide this information to the Clean Energy Council, which manages the accreditation of solar panel installers and approves the key components used.

In 2019–20, a total of 2564 systems were inspected. Of these:

  • 79.8 per cent were assessed as compliant
  • 18.6 per cent were assessed as substandard. This rating does not mean the whole system is substandard. Typically, such a rating is because one or two defects are found in the installation that do not affect performance. Defects may include equipment or installation non-compliance with relevant standards and industry guidelines, and
  • 1.6 per cent were assessed as unsafe or potentially unsafe. The most common issue associated with water ingress into DC isolators (a switch), particularly the isolator on the roof. In cases where systems are assessed as potentially unsafe, our inspectors take immediate action to render the system safe and notify relevant safety regulators.

In 2019–20 we published the Small-scale Renewable Energy Scheme residual systemic safety risks report in response to the Australian National Audit Office’s recommendation to assess the extent to which any residual systemic electrical safety risks present in our scheme data for installed rooftop solar systems. The report found water entering DC isolators was the most common cause in the small number of cases where rooftop solar was considered potentially unsafe. This provides opportunities for state and territory governments and industry bodies to address the residual risks related to DC isolators.

Footnotes

  1. Small-scale technology certificates can be created up to 12 months after the system is installed. This means that during 2019-20, we validated small-scale technology certificates created for systems installed prior to 2019–20.