Mandatory Renewable Energy Target Sample Clauses

Mandatory Renewable Energy Target. The Mandatory Renewable Energy Target was set by the Commonwealth Government under the Renewable Energy (Electricity) Act 2000, and is administered by the Office of the Renewable Energy Regulator (ORER). It requires electricity retailers to source an additional 9500 GWh of electricity (compared to 1997 levels) from renewable energy generators by the year 2010.12 However most, if not all, residential-scale renewable energy systems qualify. Each REC represents 1,000 kWh of renewable electricity, and is currently worth about $37 or 3.7 ¢/kWh. The penalty for not complying with the Act is 4.0 ¢/kWh, which after tax considerations (at a 30% marginal tax rate), gives a potential maximum value to the retailer of 5.7 ¢/kWh for renewable energy generation. Small-scale renewable energy systems need not be metered in order to generate RECs, since a deeming formula can be applied as long as they were installed on or after 1st April 2001—see Appendix 6.4 for how the deeming formulas are applied. Currently five years of future generation can be claimed up front for PV. For example, a 1 kWp PV system with an expected annual output of 1.2–1.6 MWh would typically generate 6–8 RECs over its first five years of operation, with a nominal value of $220–300. The maximum number of RECs that can be generated by a small system has been set at 25 per annum, representing 25 MWh of generation (the expected output of a PV system with a capacity of 15–20 kWp). Small systems generating more than 25 MWh per annum should meter their output and will need to separately seek accreditation as a power station if they wish to participate in the MRET scheme. System owners can choose to claim their RECs directly or assign the rights to their RECs to an agent, such as their electricity retailer, the system supplier or a government agency. The transfer of RECs and the sale of electricity are independent transactions, and so all RECs, regardless of whether they correspond to electricity used on site or exported, are treated the same way. To claim RECs directly, the system owner must register with the ORER at a cost of $20. To assign their RECs to an agent the system owner must sign a document stating they have chosen to do so. Normally this would be in return for some benefit, such as a rebate in the case of an electricity retailer or a reduction on the price of the system in the case of a system retailer. However, the agent is under no obligation to make such offers. According to the ORER, if an ag...