Australia's Renewable Energy Certificate System

Abstract

Concern about climate change and concerted international action to reduce greenhouse gas emissions are powerful new drivers for renewable energy. Australia has developed a national tradeable renewable energy certificate system to encourage additional renewable energy in electricity supplies. This chapter outlines the objectives of the Renewable Energy (Electricity) Act, its legal framework, describes the tradeable certificate mechanism, and summarizes the experience of the first year of operation of the Act. The Renewable Energy (Electricity) Act 2000 operates well with over 150 accredited power plants by mid-2002 and many small generation units contributing towards the operation of the measure. For the year 2001, the certificate target was 300,000 MWh of additional renewable energy and over 790,000 MWh appears to have been generated and claimed to date. The surrender of over 314,000 MWh of those renewable energy certificates for the year bodes well for the achievement of the Act. The tradeable renewable energy certificate approach used in the Act is novel in Australia and internationally as a mandated national target. The Act represents a major change in how additional renewable energy electricity generation is valued in Australia. The industry has responded rapidly and effectively to this change and appears to be well positioned to assist Australia in meeting this greenhouse emission reduction measure.