You are here:

1. Home

2. For Industry

3. RET Power Stations

4. LGC Eligibility Formula

LGC Eligibility Formula

Large-scale generation certificates (LGCs) can only be created by accredited RET power stations for renewable electricity delivered to an electricity network or an equivalent point of use and for renewable electricity generated above the RET power station’s renewable energy baseline.

A formula has been developed to describe the point at which eligible electricity must be measured:

The amount of electricity generated above the baseline for a year (in whole MWh) (i.e. LGC eligibility) is determined by Regulation 14 and equals:

TLEG – (FSL + AUX + (DLEG x (1 – MLF)))

Where:

TLEG - is the total amount of electricity (in MWh) generated by the RET power station in the year, as measured at all generator terminals of the power station in the year.

FSL - RET power stations may be using a combination of fossil fuels and renewable energy sources.

Where a mixture of renewable and fossil fuels is used to generate electricity, the fossil fuel component must be netted from the generation output, as it is not eligible for LGCs.

Therefore, FSL is the total amount of electricity (in MWh) generated by the RET power station, attributable to ineligible fuel sources.

AUX - Auxiliary losses relate to electricity used in the generation of electricity and electricity used in the operation and maintenance of the RET power station. The auxiliary loss is not eligible for LGCs. However, electricity consumed in a manufacturing or production process can be eligible for LGCs.

Auxiliary loss is defined under Regulation 3B and this definition may differ from various industry definitions of the term. The auxiliary loss as per Regulation 3B is the amount of electricity used in generating electricity, and operating and maintaining all the components of the RET power station (as determined by the Regulator under Section 14 of the Renewable Energy (Electricity) Act 2000 (the Act)).    

Where available, metered data of sufficient quality should be used to calculate auxiliary losses. However, where metered data is not available, a proportion of the total output (which has been identified and agreed with the Regulator in advance) may be used.

DLEG - is the net eligible generation which is exported to a distribution network, transmission network or a point of use.

MLF - Transmission losses are too be calculated through applying the marginal loss factor (MLF) to the amount of exported electricity. The MLF is calculated for each RET power station by the Australian Energy Market Operator (AEMO) in the National Electricity Market (NEM) regions. RET power stations in non-NEM regions should contact their State or Territory government for this information, where available - for example, the Independent Market Operator (IMO) in Western Australia. 

Please note, if all of the electricity generated by a RET power station is used within the RET power station and/or the local distribution network, the MLF is taken to be 1.

When metered data of sufficient quality (please refer to Regulation 4 for RET power station metering requirements) is submitted to Clean Energy Regulator, LGCs can be created for renewable electricity generation. In cases when meter quality is not of a sufficient standard the number of LGCs eligible to be created may be reduced, to ensure that LGCs are not created in respect of any electricity generation which is subject to error.

LGC eligibility example:

A RET power station with a 'nil' (0 MWh) baseline generates 100 MWh of electricity. Of the 100 MWh generated:

• 45 MWh are used internally to power machinery to manufacture product;
• 5 MWh are used within the RET power station to generate renewable electricity and therefore are considered auxiliaries;
• 50 MWh are dispatched to the pool; and
• 5 MWh are lost in transmission (i.e. MLF will be 0.9 representing a 10% loss factor).

Using the formula:

Eligible generation = 100 MWh – 0 – 5 MWh – [50 MWh x (1 – 0.9)]

= 95 MWh – 5MWh

= 90 MWh

This RET power station can create 90 LGCs, as each LGC is equal to 1 MWh. LGCs may be created for each MWh of electricity generated by the RET power station above the RET power station’s 1997 eligible renewable power baseline.

Note, that if the total amount of electricity generated in a year, in excess of the RET power station’s 1997 eligible renewable power baseline is less than 1 MWh, but greater than 0.5 MWh, 1 LGC may be created in respect of the electricity generated in that year.

To assist in the process of creating LGCs the following guidelines must be followed when calculating the level of eligible generation from a RET power station:

Guidelines for determining the renewable components in waste for electricity generation

Guidelines for calculating eligible renewable generation when co-firing renewable fuels with coal

Wood waste guide and assessment sheets