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What is the SRES and the LRET?

The Clean Energy Regulator administers two parts of the Renewable Energy Target scheme to encourage the growth of the renewable energy generation in Australia:

  1. The Small-scale Renewable Energy Scheme (SRES) and
  2. The Large-scale Renewable Energy Target (LRET).

These schemes come into place on January 1, 2011. Renewable Energy Certificates (RECs) were the primary commodity in the RET and are now reclassified as large-scale generation certificates (LGCs) and small-scale technology certificates (STCs).

The Small-scale Renewable Energy Scheme (SRES)

The SRES provides a financial benefit for owners wishing to purchase eligible solar water heaters, air source heat pumps and small-scale solar photovoltaic panels, wind and hydro systems. Installation of these units permits the creation of small-scale technology certificates (STCs), which can be exchanged for financial benefit for owners.
Owners have two options for gaining a financial benefit for their certificates:

  1. Selling the right to include STCs to an Agent, in exchange for discounts or payment, or
  2. Selling the certificates themselves, either through the open STC market (pricing subject to market forces) or through the STC Clearing House (price fixed at $40 per STC, excl. GST.).

RET Liable entities (typically electricity retailers) are required to buy from agents or owners a number of STCs as defined by the Small-scale Technology Percentage (STP). These STCs are surrendered to the Clean Energy Regulator by  RET liable entities quarterly in April, July, October and February.

The Large-scale Renewable Energy Target (LRET)

The LRET, covering large-scale renewable energy projects such as wind and solar farms, hydro-electric schemes, aims to deliver the 2020 target of 41,000 GWh of Australia’s energy through renewable resources.  Renewable power stations generate large-scale generation certificates (LGCs) based on the amount of renewable energy they produce above their baseline.  Like STCs, RET liable entities are required to surrender LGCs in order to discharge their liability under the Renewable Power Percentage (RPP).  LGCs are purchased through the LGC market.  They cannot be purchased or sold through the STC Clearing House.

For more information see:

Date last updated: 28 Mar 2012