Renewable Power Percentage

The Renewable Power Percentage (RPP) establishes the rate of liability for LRET and is the mechanism that RET liable entities use to determine how many LGCs need to be surrendered to discharge their liability each year. 

For the 2001 – 2009 compliance years individual RET LGC liabilities can be determined by multiplying the total liable or relevant acquisition for a year by the RPP.

• For example, in 2009 the RPP is 3.64%. A RET liable entity purchasing 100,000 MWh of electricity in 2009 must surrender 3,640 LGCs to fully discharge their liability under LRET in 2010 or pay the large-scale generation shortfall charge of $145,600 (3,640 x $40).

For the 2010 and future compliance years individual RET LGC liabilities can be determined by multiplying the total reduced acquisition or relevant acquisition for a year by the RPP.

• For example, in 2011 the RPP is 5.62%.  A RET liable entity’s assessment year's reduced acquisition equals 110,000 MWh of electricity purchased in 2011 (relevant acquisitions) less 10,000 MWh partial exemption certificates received from customers conducting emission intensive trade exposed activities in 2011. The RET liable entity must surrender 5,620 LGCs to fully discharge their liability under LRET in 2012 or pay the large-scale generation shortfall charge of $365,300 (5,620 x $65).

The RPP is required to be published in the Renewable Energy (Electricity) Regulations 2001 (regulations) prior to 31 March of the year in which it applies. This allows RET liable entities time to plan their LGC acquisition strategies. If the RPP is not published prior to 31 March then the default formula under section 39 (2) (b) of the Act applies and can be used to determine the default RPP for the given year.

For more information visit - Legislation

The RPP is set to achieve the interim targets specified in the legislation which will achieve the Large-scale Renewable Energy Target for 2020 of 41,000 GWh.

As the RPP is calculated in advance, it is based on:

• the required amount of renewable electricity for the year;
• the estimated amount of electricity that will be acquired for the year;
  the amount by which the required GWh of renewable source electricity for previous years has exceeded, or has been exceeded by, the amount of renewable electricity required under the scheme in those years; and
• the estimated amount of all partial exemptions expected to be claimed for the year.

For example, the 2009 RPP is 3.64% to achieve a target of 8,100,000 LGCs;

• If the RPP resulted in 8,101,000 LGCs being surrendered, a later year target would be adjusted downwards by 1,000 MWh prior to calculating its RPP. For example, the 2011 target of 10,400,000 LGCs would be adjusted to 10,399,000.  Before calculating the 2011 RPP the Clean Energy Regulator then factors all partial exemptions expected to be claimed for the year.
• If the 2009 RPP resulted in 8,099,000 LGCs being surrendered, a later year target would be adjusted upwards prior to calculating its RPP. For example, in this case the 2011 target would become 10,401,000 LGCs.  Before calculating the 2011 RPP the Clean Energy Regulator then factors all partial exemptions expected to be claimed for the year.

The size of each liable entity's LGC liability for each year will not be adjusted after surrender if the RPP does not exactly match the interim target. The Clean Energy Regulator will recommend that the Australian Government adjust a later year RPP taking the overall LGC liability into account.