The Energy Regulation and Markets Review - Stikeman Elliott

Australia
Australian Renewable Energy Agency
Another component of the Clean Energy Future Plan is the establishment of the Australian
Renewable Energy Agency (‘ARENA’) under the Department of Resources, Energy and
Tourism on 1 July 2012. 25 ARENA is to be an independent statutory body that will
administer A$3.2 billion in funding to support renewable energy technology development,
including research, development, demonstration, deployment and commercialisation
across technologies such as solar (including large-scale solar), biomass, biofuels, ocean and
geothermal. A$1.5 billion is already committed to existing projects from programmes and
initiatives that will be consolidated into ARENA, while the remaining A$1.7 billion of
funding is currently uncommitted and will be available for ARENA to provide early-stage
grants and financing assistance for renewable energy projects. 26 Furthermore, ARENA is
responsible for developing skills in the renewable energy industry and promoting knowledge
sharing and collaboration on renewable energy technology innovation with Australian and
international governments and institutions. 27
Renewable energy target
As mentioned above, the RET will continue in operation once the CPM is in effect.
The RET is established under the Renewable Energy (Electricity) Act 2000 (Cth) and
is designed to ensure that by 2020, renewable generation accounts for 20 per cent of
overall electricity generation. Since January 2011, the existing RET scheme has operated
in two parts: the Small-scale Renewable Energy Scheme and the Large-scale Renewable
Energy Target.
The RET requires electricity retailers to acquire and surrender a certain number of
renewable energy certificates (‘RECs’) as an incentive to bridge the gap between the price
of green energy and the price of black energy. The number is determined as a proportion
of the retailer’s overall acquisitions of electricity. Following changes to the RET that
commenced on 1 January 2011, there are now two forms of RECs that retailers can
purchase to satisfy their liability:
a large-scale renewable energy certificates, which can be created by accredited
renewable energy power stations (e.g., wind farms and large solar installations);
and
b small-scale technology certificates, which are created from small units (e.g., solar
PV panels and solar water heaters).
25 Australian Renewable Energy Agency Act 2011 (Cth).
26 Department of Resources, Energy and Tourism, Draft Energy White Paper 2011: Strengthening
the foundations for Australia’s energy future, Canberra, December 2011, available at www.ret.
gov.au/energy/Documents/ewp/draft-ewp-2011/Draft-EWP.pdf.
27 Martin Furguson (Minister for Resources and Energy and Minister for Tourism) and Greg
Combet (Minister for Climate Change and Energy Efficiency), 12 October 2011, media
release: Legislation introduced to establish ARENA, www.climatechange.gov.au/~/media/Files/
minister/combet/2011/media/october/mr20111012.pdf.
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