The electricity retailers who have failed to meet renewables target

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A handful of small electricity retailers have failed to meet their large-scale renewable energy targets for the 2015 year, meaning that $4.5 million in “penalty charges” will be paid by consumers to the government, rather than supporting the renewable energy industry.

The table below was compiled by the Clean Energy Regulator, which administers the large-scale renewable energy target.

The RET aims for 33,00GWh of large-scale renewable energy by 2020, but it has stepping stone targets each year. Each retailer is obliged to meet their share of the target.

If they don’t, then a penalty of $65/MWh net, (or $92/MWh pre tax) is applied. That money is not actually paid by the retailer,  but by the customer. The money goes to government revenue, rather than to any renewable energy development.

renewables shortfall

It is suggested that these small retailers, including the struggling GoEnergy, may have chosen to pay the shortfall penalty of $65/MWh because they do not pay tax. That makes it cheaper to pay the penalty rather than the current market price of $80/MWh.

Those retailers who make profits, and pay tax, face an effective penalty of $92.60. Again, because the penalty is transferred to the customer, and paid to the government, there is no actual penalty on the retailer itself.

“This money is lost to the renewable energy industry,” says Ric Brazzale, from Green Energy Markets. UBS analysts also noted that because of this, the financial incentive for even big retailers to meet their commitments is not strong.  

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  • Talk about adding insult to injury! The utilities should pay if they don’t meet their target, not their customers who have no control over it.

    • Andrew Thaler

      except for the fact that a retailer kind of acts as an electricity broker for their customers.. so yes, the retailers can skip the liability. they would never have agreed to it otherwise.

      • Brad Sherman

        If true, this is appalling. No reasonable person could be expected to think of their energy retailer simply as an intermediary with no responsibility to comply with the RET. I’d wage virtually all customers assume their retailer takes care of all compliance issues. Can you imagine the amount of administration if each individual customer had to file compliance paperwork? If I was expected to pay a fine on behalf of my retailer, I’d be looking for a lawyer.

  • lin

    It is difficult to see this sort of screw-up as an accident, so I suspect it is just another instalment in the LibNat climate action sabotage. We need a government that will do the opposite of what these guys are doing in almost every instance.

    • MaxG

      You may feel this way, but the majority of Australians has voted for these guys, hence, get what they deserve.

      • solarguy

        Yeah, but we reap the whirlwind of their stupid decisions.

  • solarguy

    Vote the Libs out and give Labour and the Greens a go. Their clear on their RE plan, at least 50% by 2030

  • rick

    Now if I don’t pay my bills or meet my charges I get charged or fined it seems there are two sets of rules doesn’t it.

  • Chris Fraser

    As disappointed as I am in discovering Retailers behaving badly, and as much as I fear this loss being used witlessly by the Coalition as a stick against RE during the next election … should not the penalty be higher to make brand new LGCs somewhat more attractive ?

  • rick

    When it comes to the incumbent retailers being charged or fined not going to happen with the current Governments either state or federal. They are all in bed with each other and only a government that is for the people and not the retailers is our only hope of some change for the better. Start to instigate for change through your network of contacts and friends. This is in your hands people. Get off your buts and do something about it.

  • rick

    Just shows how stupid people are when they have no idea of what happens from their actions, and then blame someone else for the outcome.

  • Mike Day

    As the article mentioned, these retailers most likely aren’t making a profit, therefore aren’t paying tax. This makes the $65 penalty cheaper than an $80 certificate. Since the LGC certificate price is also passed onto the customers as charges on their bill, the customer is actually saving money by paying the fine and not buying a certificate.

    Not the outcome that the LGC was setup to achieve, and yes, it is lost money from the renewables industry, but the customer is not being stung here.

    • “the customer is not being stung here”
      Your kidding aren’t you. They are being asked to $65/MWh for renewable energy generation that is not being delivered. They are just paying a tax for nothing.