Markets, regulations and the electricity grid

A number of markets have been created for renewable energy products, highlighted as follows.

Mandatory Renewable Energy Target (MRET)

The Australian Government introduced the Mandatory Renewable Energy Target, or MRET in 2001. MRET is underpinned by the Renewable Energy (Electricity) Act 2000 and its associated regulations.

MRET is designed to increase the generation of renewable energy by an additional 9,500 GWh per annum by 2010.

The Act requires electricity wholesalers and large energy users to purchase additional amounts of renewable energy.

Renewable energy purchases are substantiated by tradeable Renewable Energy Certificates (or RECs).

Liable parties can either trade RECs to meet renewable energy targets, or use them to reduce or avoid financial penalties (a non tax-deductible penalty of $40/MWh) for failing to meet their MRET targets.

Green Power schemes

A number of electricity suppliers around Australia offer Green Power schemes, which provide retail customers with the opportunity to purchase electricity from eligible renewable sources at a premium over the cost of traditional power sources.

These schemes are nationally accredited trough the National Green Power Accreditation Steering Group, and are offered nationally through joint collaboration in NSW, Victoria , Queensland , South Australia and the ACT.

Eligible green power sources include biomass from energy crops, noxious weeds and sustainably managed forestry plantations.

NSW Electricity Retailer Greenhouse Benchmarks Policy

The Policy of the NSW Ministry of Energy and Utilities includes mandatory targets for power generators in regard to reducing their greenhouse emissions.

Victorian Greenhouse Strategy

The Victorian Government is encouraging the production of renewable energy by providing financial support to assist the development of renewable energy projects in the State. Financial assistance is available for the assessment of technical and economic opportunities for renewable energy sources.

‘Conventional’ markets for wood waste

The proven technologies for wood waste include direct combustion and dedicated bioenergy plants and the co-firing of wood waste with coal.

Many timber processing companies currently use their wood waste to generate heat and steam for drying their timber products, or to power their hydraulic processes. However, it is possible that the mills could generate electricity for use at the mill or to sell into the power grid.

Electricity fed into the grid could be sold as part of the base load supply or could be used to meet peak consumer demands.

For more information, refer to the following Information Sheets

Information Sheets:

5:                    What markets exist for renewable energy generated from wood waste?

8:                    What is the Mandatory Renewable Energy Target?

21:                  What markets are available for the credits and electricity supplied from
renewable energy projects?