Renewable Energy Target Australia

Energy & Telecom SEO Specialist

Updated on 16/11/2023

min reading

Australia’s Renewable Energy Target is a goal set by the Australian Government to increase the amount of renewable energy generated in the country, through residential and commercial incentives. While first legislated in 2001, the Renewable Energy Target has expanded and transformed in multiple ways. Find out more about the Australian Renewable Energy Target, and how you can benefit, by reading more below.

What is the Renewable Energy Target?

The Renewable Energy Target is a goal set by the Australian government to increase the amount of electricity generated from renewable sources in the country. The Renewable Energy Target is divided into two schemes: Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme.

The Renewable Energy Target is under the responsibility of the Australian Department of Industry, Science, Energy, and Resources who provide policy advice and implementation support for the scheme, while the Australian Energy Regulator (AER) oversees the operation of the Renewable Energy Target scheme, in accordance with the legislation.

The Renewable Energy Target was first implemented in 2001, as the Mandatory Renewable Energy Target of 9,500 GWh of renewable generation by 2020. This was then expanded in 2009 from the original 9,500 GWh to 45,000GWh by 2020 with an expansion of the legislation until 2030 when it was agreed to be phased out.

In 2011, the Renewable Energy Target was split into what is now the Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme, with a goal of 41,000GWh generated renewable energy from large-scale generation and an uncapped small-scale generation goal.

In 2015 the LRET was reduced to 33,000GWh by 2020. The Large-scale Renewable Energy Target of 33,GWh was achieved in September 2019.

Renewable energy target Australia timeline 2001 to 2030

Large-scale Renewable Energy Target (LRET)

The Large-Scale Renewable Energy Target is one half of the Renewable Energy Target set by the Australian government, implemented to encourage more electricity generation through renewable resources, by incentivising investment into renewable energy power stations.

The LRET incentivises investment in renewable energy generation through the legislation and creation of large-scale generation certificates (LGCs) for each megawatt hour of renewable electricity produced.

These LGCs ae sold to entities such as electricity retailers, who then buy and surrender them to the Clean Energy Regulator in order to show their compliance with the Renewable Energy Target scheme. These LGCs, in turn, provide the power station with an additional source of revenue.

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Small-scale Renewable Energy Scheme (SRES)

The Small-scale Renewable Energy Scheme is the other half of the Renewable Energy Target, which aims to incentivise households, businesses, and communities to install small-scale renewable energy systems.

The Small-scale Renewable Energy Scheme legislates demand for small-scale technology certificates (STCs) which are created, bought, and sold to lower the cost of a small-scale system for the individual or business who purchased it.

What are small-scale renewable energy systems?

Small-scale renewable energy systems are systems too small to be considered a power station, according to the Renewable Energy Target legislation. In terms of residential energy generation, you probably won’t need to worry about whether your system qualifies as large or small scale.

Small-scale renewable energy systems include:

Rooftop solar PV (the most common)
Solar water heaters
Wind turbines
Air source heat pumps
Small-scale hydro systems
solar pool heaters

Small-scale certificate (STCs) price

Small-scale certificates (STCs) are a financial incentive used to promote the use of small-scale and residential renewable energy. STCs are created per system installed, and the amount of STCs you can get depends on a number of factors including geographical location, installation date, and amount of energy it can produce over a period of time, but in general one certificate is approximately equal to one megawatt hour.

With residential renewable systems, STCs are often assigned to the installer or company that provides your renewable energy system, in exchange for a point-of-sale discount. However, it is possible to create and sell them yourself.

STCs can be bought and sold on the open market for an uncapped price, or sold through the STC clearing house (owned by the Clean Energy Council) which currently sets the STC price at a fixed $40.

STC priceDue to the increased number of STCs on the market, the value of these certificates will continue to decrease until they are phased out by 2030. However, as of 2020, the STC price in the open market hovers somewhere around $37 per STC.

If you have a small scale system at your home, you may be able to sell energy back to the grid to help pay for your system. See our article of the solar feed-in tariff for more information.

The state of renewable energy in Australia

So, how is Australia doing with meeting it’s Renewable Energy Target? As stated, Australia hit it’s Large-scale Renewable Energy Target in September 2019, more than a year before it’s goal date. In addition the percentage of renewable energy generated continues to rise, reaching 24% of total energy generated in the country in 2020.

Renewable energy in Australia

Below, you can see the total amount of renewable energy generated by state, as well as the national total (excluding the Northern Territory due to it’s small grid) in 2019.

Renewable energy generation by state 2019
State	Total Generation (GWh)	Fossil Fuel Generation (GWh)	Total Renewable Generation (GWh)	Percentage of energy generated from renewables
Tasmania	10,786	473	10,313	95.6%
South Australia	15,062	7213	7849	52.1%
Victoria	47,780	36,352	11,428	23.9%
Western Australia	19,264	15,242	4022	20.9%
New South Wales & ACT	71,011	58,851	12,160	17.1%
Queensland	66,068	56,747	9321	14.1%
National	229,971	174,879	55,093	24.0%

Source: Clean Energy Council 2020 Report

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This 24% of energy generated by renewable sources is a 3% increase from the previous year, and an almost 10% increase from when the Clean Energy Council first began its Clean Energy Australia Reports in 2013.

Clean Energy Council Reports 2013 - 2021

Renewable energy technologies in Australia

Australian renewable energy is generated through many different means. These include:

Wind power
Hydropower
Small-scale solar energy (residential solar panels)
Medium and large-scale solar energy
Bioenergy

According to the 2020 Clean Energy Council, wind power made up the greatest percentage of renewable energy generation in the country at 35.4% total generation, with hydro coming in second place with 25.7% of total renewable energy generation.

Source: Clean Energy Council 2020 Report

How can I support renewable energy in Australia?

There are many different ways you can support renewable energy in Australia, including:

Switch to a green electricity provider: There are so many energy providers who now offer 100% carbon-neutral energy while investing heavily in renewable sources of generation. According to GreenPeace, Enova Energy is the “greenest” energy provider in Australia with a perfect 10+ out of 10 according to their Green Energy Provider ranking for 2022, with Diamond Energy coming in at a close second.

Consider GreenPower: GreenPower is a voluntary carbon-offset program designed to support the generation of renewable energy. For an additional cost (usually in c/kWh), you can offset your energy usage through your energy provider.

Most major energy providers, including AGL, EnergyAustralia, and Origin Energy offer GreenPower, but it will usually cost you extra.

Invest in a solar PV system for your house: Now is the best time to invest in solar and get the most you can through the small-scale technology certificates.

The STC price is expected to decline until it’s phased out by 2030, and certain states within Australia offer additional solar rebates, loans, and schemes to incentivise households to invest in solar energy.