Renewable Energy Target scheme

The Renewable Energy Target (RET) scheme encourages the additional generation of electricity from renewable sources to reduce greenhouse gas emissions in the electricity sector.

The RET comprises two schemes.

Large-scale Renewable Energy Target

The Large-scale Renewable Energy Target (LRET) incentivises investment in renewable energy power stations, such as wind and solar farms, or hydro-electric power stations, by legislating demand for large-scale generation certificates (LGCs). One LGC can be created for each megawatt hour of eligible renewable electricity produced. LGCs can be sold to liable entities (mainly electricity retailers) who buy and surrender the LGCs to the Clean Energy Regulator to demonstrate their compliance with the scheme's annual targets. In turn, the LGCs provide the power station with a source of revenue additional to the sale of the electricity generated.

The Regulator has advised that the LRET target of 33,000 gigawatt hours of additional renewable electricity generation was met on a rolling 12-month basis at the end of January 2021. The annual target will remain at 33,000 gigawatt hours until the scheme ends in 2030.

Small-scale Renewable Energy Target

The Small-scale Renewable Energy Scheme (SRES) incentivises households, businesses and the community to install eligible small-scale systems such as rooftop solar panels, solar water heaters, small-scale wind or hydro systems by legislating demand for small-scale technology certificates (STCs). STCs are created at the time of installation according to the system’s deeming period—the estimate of years the system will create renewable energy from installation until 2030. Liable entities have a legal requirement to buy and surrender STCs to the Regulator quarterly.

While it is possible for the system owner to create and sell the STCs themselves, installers of these systems usually offer a discount on the price of installation in return for the STCs.

Emissions-Intensive Trade-Exposed activities under the RET

A 100% exemption from RET liability is applied to electricity used in carrying out eligible emissions-intensive trade-exposed (EITE) activities. Companies that conduct an eligible EITE activity may be issued with an exemption certificate by the Regulator.

EITE activities are specified in the Renewable Energy (Electricity) Regulations 2001.

Guidance for determining EITE activity boundaries are described in the instrument Emissions-Intensive Trade-Exposed Activity Boundaries. 

Responsibility for the RET

Our department provides policy advice and implementation support for the RET scheme.

The Regulator oversees the operation of the RET scheme in accordance with the RET legislation:

• Renewable Energy (Electricity) Act 2000
• Renewable Energy (Electricity) (Small-scale Technology Shortfall Charge) Act 2010
• Renewable Energy (Electricity) (Large-scale Generation Shortfall Charge) Act 2000
• Renewable Energy (Electricity) Regulations 2001

Read more

• View the Clean Energy Regulator’s website
• Read about Australia's domestic climate change strategies

See also

The Emissions Reduction Fund incentivises Australian businesses to cut the amount of greenhouse gases they create