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Power Stations Guide

Large-scale Renewable Energy Target (LRET) process for owners of power stations
In this guide:
Overview Large-scale generation certificates (LGCs) Power station process under the LRET Determine eligibility Apply for accreditation How to create, sell and transfer LGCs in the REC Registry LGC eligibility formula Annual reporting

Determine eligibility

Under the Renewable Energy (Electricity) Act 2000 (the Act), only the power stations using at least one of the eligible renewable energy sources under Section 17 (1) of the Act, can become accredited under the LRET.

A full list of eligible renewable energy sources is included in Section 17 (1) of the Act and guidance on the eligibility of a number of fuel sources is included in the Renewable Energy (Electricity) Regulations 2001 (the Regulations). Electricity generated from fossil fuels or waste products derived from fossil fuels are not eligible for LGCs.

Co-firing power stations that are accredited for renewable energy generation can still use these fuels to create electricity, as long as no LGCs are created in respect of the fossil fuel generation.

For a copy of the Renewable Energy (Electricity) Act 2000 and Renewable Energy (Electricity) Regulations 2001 visit the ComLaw website.

Overview
As of 1 January 2011 the Renewable Energy Target (RET) has been split into the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Under the LRET accredited renewable energy power stations may be entitled to large-scale generation certificates (LGCs). These certificates can then be sold and transferred to liable entities (usually electricity retailers) using a market based online system called the REC Registry. Renewable Energy Certificates (RECs) for eligible renewable energy power stations created from 1 January 2011 will be classified large-scale generation certificates (LGCs). Certificates created for small-scale renewable energy systems installed before 1 January 2011 which are created on or after 1 January 2011 will also be classified as LGCs. For more information visit LRET/SRES the basics.

Apply for accreditation

Once you have determined whether your renewable energy source is eligible you can apply for the accreditation of the renewable energy power station. To apply you will need to:

1 Become a For parties applying for accreditation of a power station for the first time, the owner or operator of registered the power station will need to become a registered person in the REC Registry. This is an internet person in the based registry system that: online REC Maintains various registers (as set in the Act) Registry

Facilitates the creation, registration, transfer and surrender of LGCs and small-scale technology certificates (STCs).

A registered person can create, sell and transfer LGCs in the REC Registry. You can register as follows:

1. Go to the Registration Wizard

Large-scale generation certificates (LGCs)

Large-scale generation certificates (LGCs) are an electronic form of currency created on the REC Registry by eligible entities. A LGC is equivalent to: 1 MWh of eligible renewable electricity generated above the power stations renewable energy baseline. Properly created LGCs are validated by ORER and after payment of fees, become registered LGCs. These are then able to be transferred between eligible parties and liable entities for a negotiated price. Payment is arranged outside the REC Registry. 2

2. Follow the steps to the power station account pages.

3. The Wizard will ask you to Download the Accreditation of a Power Station Form.

4. Follow the steps to create an account in the REC Registry and become a Registered Person

5. Pay a $20 registration fee to complete the registration process.

Please DO NOT send any payment to ORER.

Payment of the $20 registration fee is made via your account in the REC Registry. The application fee is GST exempt.

Once your application has been approved, you will be allocated a unique registration number.

Power station process under the LRET

Apply for Complete an Application for Accreditation of a Power Station form and send it to ORER. Download via Accreditation the Registration Wizard as above or visit Application for Accreditation of power station form.

This webpage includes explanatory notes to assist you with your application. Also read the information below regarding Power station boundaries and components and Setting the baseline

Copies of all required documentation relevant to the application for accreditation must be attached to a completed application form.

Applicants will receive notification of receipt.

Separate application forms are required if seeking accreditation of multiple power stations

demand constraints; and

3 application fees The REC Registry contact detailed in the form will receive an email from the REC Registry asking for payment of the accreditation fee.
An accreditation fee must be paid prior to a power station becoming accredited. The fee varies depending on the size of the power station and the complexity of the accreditation process. Accreditation fees are listed in Regulation 28 of the Act.

Pay the

The ORER will notify you in writing when your application is considered to be a properly made application under sections 12A and 13 of the Act.

other factors as listed under Schedule 3 of the Regulations.

The legislation stipulates that the Register of Accredited Power Stations include the renewable energy baseline for each accredited power station. The Register of Accredited Power Stations is available from the REC Registry.

How to create, sell and transfer LGCs in the REC Registry

Creating LGCs

4 Application Once the accreditation fee is received by the ORER the Regulator will determine matters under assessment section 14 of the Act and either approve or refuse 'Accreditation of Power Station Application' under section 15 of the Act. The primary contact (which may be different to the REC Registry contact) will be informed through a letter from the Regulator indicating whether or not the application has been successful. Under section 12C of the Act, the Regulator must make a decision regarding an application for accreditation within 6 weeks from the time an application is deemed to be properly made (unless otherwise agreed with the applicant for a longer period). 5 Notification If accredited, the accredited power station will be assigned a unique identification code (accreditation of application code) by the Regulator. The code will form part of the information contained in each LGC created by the registered person in the REC Registry under the Large-scale Renewable Energy Target (LRET). This means that each LGC is identifiable and traceable to an individual power station or LGC owner. outcome The accreditation start date will be the date the application was deemed to be properly made under section 13 of the Act. If the power station begins generating electricity after this date, LGCs may be created from the date the power station begins generating eligible electricity. 1

Once your power station has become accredited, under the Act and Regulations, you (nominated person) can access your REC Registry account, using your username and password, to create LGCs in the REC Registry. Answer validation questions

Before you create your LGCs in the REC Registry for the first time you should prepare answers to the LGC validation questions and email them to lgcvalidation@orer.gov.au

Visit Standard LGC validation questions. 2 Create LGCs through the REC Registry

Once your application to accredit the power station has been approved, you are ready to create LGCs for your power stations eligible electricity generation. For details on how to calculate the number of LGCs you can create see LGC eligibility formula.

The main details required to create LGCs include the following:

Power station name Generation year Generation month Fuel source Number of LGCs to create

LGCs created for power stations can be assessed by ORER on a monthly basis.

Power Station Boundaries and Components

Guidelines are contained in Schedule 1 of the Regulations regarding which components may be taken to be part of a power station. This is not exhaustive and additional components may be considered, by the Regulator, to be part of the power station. In the application for accreditation of a power station, the applicant is required to specify the components of the electricity generation system that the applicant considers are a single power station. The Regulator uses the information provided by the applicant and guidelines under Schedule 1 of the Regulations to determine the components that are to be taken to constitute the accredited power station. The accredited power station can then be eligible to create LGCs if conditions under section 18 of the Act along with Regulations 14 to 16 are satisfied.

Go to the REC Registry to complete the process.

The REC registry contains online help screens and a Support Desk to assist in the use of the Registry.

LGCs with different energy sources and for different months need to entered in separately

Power stations must create LGCs for eligible generation before the end of the calendar year following the year the electricity was generated. For example, for 2010 calendar year generation, LGCs must be created on or before 31 December 2011.

Setting the baseline

Baselines for individual power stations are determined and set as part of the power station accreditation process. The Act and Regulationsstipulate that power stations must generate renewable electricity above their 1997 eligible renewable power baseline (MWh), before LGCs can be created using the formula specified under regulation 14. Baselines for all accredited power stations can be viewed in the REC Registry Register of Accredited Power Stations. Example: if a power station is accredited with a renewable energy baseline of zero then all of the eligible renewable electricity delivered to an electricity network or load is eligible for LGCs. if the power station started to generate electricity prior to 1 January 1997 the power station will be accredited with a non-zero renewable energy baseline. In this case only the eligible renewable electricity generated above the renewable energy baseline is eligible for LGCs. A baseline is determined using a number of factors including: the average of electricity generated in the three years prior to 1997; seasonal variations; major changes to infrastructure;

3 Provide all relevant Once LGCs have been created in the REC Registry, you will need to email all relevant documentation to lgcvalidation@orer.gov.au. documentation Documentation may include:

Generation data as collected by electricity meters with the ability to accurately measure the amount of generation by the power station.

For power stations using multiple fuel sources; documentation regarding the origin of the fuel sources, the amount of fuel consumed and characteristics, such as the calorific (heating) value of the fuels must be submitted.

Any other documentation that may assist to calculate and verify the amount of eligible electricity generated and auxiliary power consumed by the power station.

Wait while your LGCs are validated

Once you have created your LGCs, they will be validated by an ORER officer to ensure they have been created correctly. This may take up to 4 weeks.

If the LGCs are not correctly created they are failed by ORER and will need to be re-created correctly.

When your LGCs are validated, they become Pending Registration.

5 Register your LGCs To register LGCs you need to pay an 8 cent registration fee, as required under section 26 of the Act. The 8 cent registration fee is a cost recovery mechanism for providing the REC Registry service and also helps to provide improvements to the current service.

To pay the registration fee you will need to log into the REC Registry, using your username and password, and render the registration fee item to an invoice and pay the invoice through the REC Registry. Information on invoice payment methods and processes are available through the REC Registry help pages or by contacting the REC Registry helpdesk on 1800 159

724. Once the payment has been received and the invoice settled your LGCs will be registered. Once registered, LGCs can be traded to liable entities or surrendered to ORER to discharge an LGC liability under the Act. 6 your LGCs. Sell your LGCs and transfer them in the Price and payment date should be key considerations when negotiating the sale of your LGCs. You should ensure that: REC Registry
you are satisfied with the price and payment date your receive for your LGCs details are recorded in writing before entering any contractual arrangement to sell your LGCs.

Valid LGCs can be created for renewable electricity generation using metered data of sufficient quality (please refer to Regulation 4 for power station metering requirements). In cases when meter quality is not of a sufficient standard the number of LGCs eligible to be created may be reduced, to ensure that LGCs are not created in respect of any electricity generation which is subject to error. Example:

Find a buyer for

If you wish to sell your LGCs, it is your responsibility to find a buyer and negotiate the price and other terms of sale. Most potential buyers will be liable entities (wholesale purchasers of electricity) who must buy LGCs in order to acquit their liability under the Act.

A power station with a baseline of zero generates 100 MWh of electricity. Of the 100 MWh generated:

45 MWh are used internally to power machinery to manufacture product;

5 MWh are used within the power station to generate renewable electricity and therefore are considered auxiliaries; 50 MWh are dispatched to the pool; and

Once you have found a buyer and negotiated the terms of sale, you will need to transfer the LGCs to the buyer through the REC Registry and arrange payment outside the REC Registry.
ORER does not set the price of LGCs nor does it get involved in disputes between buyers and sellers. Payment for LGCs is a contractual matter between the buyer and seller.

5 MWh are lost in transmission (i.e. MLF will be 0.9 representing a 10% loss factor). Using the formula:

Eligible generation = 100 MWh 0 5 MWh [50 MWh x (1 0.9)] = 95 MWh 5MWh = 90 MWh

7 Retain copies of all documents

More information on compliance is on the ORER website. ORER may conduct auditing and compliance activities which can include sighting and verifying any relevant documents required under the Act and Regulations for applications for power station accreditation and the validation of LGCs

LGC eligibility formula

LGCs can only be created by accredited renewable energy power stations for electricity delivered to an electricity network or an equivalent point of use and for electricity generated above the power stations renewable energy baseline. A formula has been developed to describe the point at which eligible electricity must be measured: The amount of electricity generated above the baseline for a year (in whole MWh) (i.e. LGC eligibility) equals TLEG (FSL + AUX + (DLEG x (1 MLF))) TLEG - is the total amount of electricity, in MWh, generated by the power station in the year, as measured at all generator terminals of the power station in the year. FSL - Power stations may be using a combination of fossil fuels and renewables. Where a mixture of renewable and fossil fuels is used to generate electricity, the fossil fuel component must be netted from the generation output, as it is not eligible for LGCs. Therefore, FSL is the total amount of electricity (in MWh) generated by the power station, attributable to ineligible fuel sources. AUX - Auxiliary losses relate to electricity used in the generation of electricity and electricity used in the operation and maintenance of the power station. The auxiliary loss is not eligible for LGCs. However, electricity consumed in a manufacturing or production process can be eligible for LGCs. Auxiliary loss is defined under regulation 3B and this definition may differ from various industry definitions of the term. The auxiliary loss as per regulation 3B is the amount of electricity used in generating electricity, and operating and maintaining all the components of the power station (as determined by the Regulator under section 14 of the Act). Where available, metered data of sufficient quality should be used to calculate auxiliary losses. However, where metered data is not available, a proportion of the total output (which has been identified in advance) may be used. DLEG and Transmission losses - Transmission losses are to be calculated through applying the marginal loss factor (MLF) to the amount of exported electricity. The MLF is calculated for each power station by the Australian Energy Market Operator (AEMO) in National Electricity Market (NEM) regions. Power stations in non-NEM regions should contact their State or Territory Government for this information, where available. Please note, if all of the electricity generated by a power station is used within the power station and/or the local distribution network, the MLF is taken to be 1.

This power station can create 90 LGCs, as each LGC is equal to 1MWh. LGCs may be created for each whole megawatt hour of electricity generated by the power station above the power stations 1997 eligible renewable power baseline.

Note, that if the total amount of electricity generated in a year, in excess of the power stations 1997 eligible renewable power baseline is less than 1 MWh, but greater than 0.5 MWh, 1 LGC may be created in respect of the electricity generated in that year.

To assist in the process of creating LGCs the following guidelines must be followed when calculating the level of eligible generation from a power station:

Guidelines for Determining the Renewable Components Waste to Electricity Generation

Guidelines for Calculating Eligible Renewable Generation when Co-firing Renewable Fuels with Coal Woodwaste assessment sheets

Annual reporting

Under section 20 of the Act, an Electricity Generation Return (the return) must be submitted by 14 February (or any other day approved by the Regulator) each year for electricity generated in the previous year, by each accredited power station. Under Section 30E(1) of the Act the Regulator may suspend the accreditation of a power station if the return is not lodged with the ORER before the due date.

The Electricity Generation Return must be completed by the nominated person for each power station that was accredited with ORER on or before 31 December each given year. Example:

The return for electricity generated in the 2010 calendar year must be lodged with the ORER on or before 14 February 2011. A separate return must be submitted for each power station accredited with ORER, including those power stations with nil generation. Visit Electricity Generation Return.

Last updated:Monday July 04 2011

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