Mandatory Renewable Energy Target (MRET)

The Renewable Energy (Electricity) Act 2000 sets the framework for the Mandatory Renewable Energy Target (MRET). The governments renewable energy target seeks to raise the contribution of renewable energy sources in Australias electricity mix by 9 500 GWh per year by 2010 and maintain this requirement until 2020. Under this measure, tradable Renewable Energy Certificates (RECs) are used to demonstrate compliance with the objective.All wholesale electricity purchases on grids of more than 100 MW of installed capacity have to apply mandatory renewable energy targets since 1 April 2001. In order to meet their obligation, liable parties (wholesale purchasers) surrender Renewable Energy Certificates to the Renewable Energy Regulator. A Renewable Energy Certificate represents 1 MWh of electricity. The penalty payment for non-compliance is AUD 40 per MWh (non-tax deductible). The Office of the Renewable Energy Regulator administers the MRET.All interim targets for the elapsed years 2001 to 2007 have been met, with over 99.7% of target beeing met by REC surrender.Legislation to increase the MRET target to 20%(or 45,000GWh) of electricity consumption by 2020 is expected to be in place by mid-2009.

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