Australia’s Clean Energy Regulator has confirmed that the federal government’s 2020 Renewable Energy Target is as good as met, by wind and solar projects either already built or in the works.
In a market update released on Friday, the CER said there was now 6553MW of capacity from new renewable energy projects under construction or already built – considerably more than the 6400MW of capacity required to meet the 2020 RET of 33,000GWh.
A further 1454MW of projects, it said, were likely to be fully financed and under construction this calendar year, via power purchase agreements.
“We expect the 2020 Renewable Energy Target will be exceeded at current build levels,” the Regulator says in the report.
“We remain confident the market will continue to operate with a healthy working surplus of around 5 million LGCs in 2018 and 2019. The surplus should start to increase again from 2020.”
The Regulator also noted that if the spot LGC price remained high, electricity retailers may “time shift demand,” either by carrying forward less than 10 per cent of their liability to later years, or by paying the shortfall charge.
This means that retailers that have not bought enough LGCs to meet their obligation will “pay the shortfall charge” now and buy LGCs later.
According to the rules of the scheme, however, these companies have three years grace to pay, allowing them to buy when prices fall – as ERM Power did last year.
CER executive general manager Mark Williamson said the build-out of renewables in Australia, including the booming commercial and industrial solar market, was exceeding expectations.
“We do think everybody is underestimating the pace of (renewable energy development),” Williamson told Australian Energy Week in Melbourne on Friday.
Sophie is editor of OneStepOffTheGrid.com.au and deputy editor of its sister site, RenewEconomy.com.au. Sophie has been writing about clean energy for more than a decade.