The Clean Energy Regulator has today published the 2018 certificate shortfall list and large scale generation certificate market update - February 2019 following final surrender by liable entities for the 2018 assessment year.
Across both the Large-scale Renewable Energy Target and Small-scale Renewable Energy Scheme, 93.3 per cent of certificates were surrendered on time by Renewable Energy Target liable entities (usually electricity retailers).
Surrender rates for small-scale technology certificates was 99.9 per cent. Surrender rates for large-scale generation certificates was 86.1 per cent, with a shortfall of 3.9 million large-scale generation certificates or 13.9 per cent of total liability.
In October 2018, the agency released an industry position on shortfall. This position stated that as the Renewable Energy Target will be exceeded, the agency has no objections to the use of shortfall in the expectation that clients will true up their position by surrendering sufficient LGCs in a subsequent year, as allowed for under the law.
The use of shortfall by liable entities has substantially shifted demand for large-scale generation certificates from the current year into future years, leaving a surplus of 7.1 million large-scale generation certificates after final surrender. As large-scale generation certificate spot prices fell from above $71.90 to $39, the impact of the Large-scale Renewable Energy Target on household electricity prices will also decrease.
Under the Large-scale Renewable Energy Target, liable entities with a shortfall of less than 10 per cent of their total large-scale generation certificate (LGC) liability for an assessment year may carry forward that shortfall amount to the following assessment year. For example, liable entities with a LGC shortfall of less than 10 per cent for the 2018 assessment year will have this amount added to their liability for 2019.
Any small-scale technology certificate (STC) shortfalls must be acquitted with the payment of the small-scale technology shortfall charge. The STC shortfall charge is $65 per certificate. STCs can be purchased through the STC clearing house for a fixed price (currently $40 per certificate). There is no option to carry forward a STC shortfall or to provide STCs at a later date to receive a refund on the shortfall charge paid.
The certificate shortfall register presents certificate shortfalls and shortfall charges for each assessment year. The register can be filtered and ordered by liable entities with LGC shortfall, STC shortfall and percentage of total LGC certificate liability.