The LRET and SRES Revealed

As of the start this year (January 1, 2011) the current RECS or renewable energy certificates will be divided into two namely: The LRET or large scale renewable energy target and the SRET or the small scale renewable energy scheme.

LRET offers monetary incentives based on the electricity produced by clean and renewable energy producing large scale power stations. LGC or large scale generation certificates are issued to these power stations (more like the traditional RECS issued before.) LRET also oblige electricity retailers to purchase energy from renewable energy power stations to cope with annual demand set by the Office of the renewable energy Regulator.

The main goal of LRET is to pull more electricity generation from clean and renewable sources and ultimately reduce our carbon footprint by supplying clean energy to electricity retailers.

On the other hand SRES offers a monetary incentive for small scale renewable energy owners. The scheme includes rooftop solar panels , solar hot water systems, small scale wind and hydro power systems and air sourced heat pumps.

Qualified systems can be issued and be entitled to STC’s or small scale technology certificates and again the amount of certificates will be determined by the amount of electricity that the system produces and or displaces. The SRES also oblige electricity retailers to buy some amount STC’s annually as STC’s can be sold.

You as a renewable energy system owner will have two options in monetizing your STC’s. 1st you can either use STC as a credit or a form of discount or directly sell the certificates in open STC market or the STC clearing house at a fair price(a fixed price of $40 each). However you must understand that selling STC in the open market will be governed by the STC clearing house, meaning prices, terms and conditions and disputes within the open market will not be interfered by the clearing house.

Unlike LRET, SRES does not have an annual target. The amount of STC’s that electricity retailers must buy is determined by the small scale technology percentage or STP. The body estimates the number of STC’s that can be produce in a year and sets the number of STC’s that retailers must purchase annually based on it.

Understanding the Certificates

LGC’s or Large scale generation certificates (for LRET), is one form of e-currency governed by the REC registry. To be issued by one LGC the system renewable energy power stations must produce 1MWh of electricity above their determined baseline production.
Meanwhile one STC or a small scale technology certificate is equivalent to 1MWh produced from renewable energy sources (solar credits and multipliers can take place).