Declining to disclose the names of companies which failed to meet targets in time for the first compliance period deadline, Rossiter says no company has blatantly shirked their responsibilities and only a few "minor payments" have been required for non-compliance. The penalty for non-compliance is a charge of A$40 a MWh -- effectively acting as a price cap. In the first period Renewable Energy Certificates traded below this at between A$32-37.
A total of 314,856 Renewable Energy Certificates were surrendered to the regulator -- more than the required 300,000 certificates (each representing 1 MWh of eligible renewable generation). The additional RECs resulted from higher than expected electricity demand, Rossiter says. With 659,085 certificates actually created during the period, the excess RECs, measuring at least 345 GWh of renewable generation, can be carried forward to meet next year's target of 1100 GWh.
Meanwhile, the system of using RECs may be expanded to include the introduction of distinct certificates for the different renewable energy sources -- thereby leading to the introduction of wind energy certificates. The proposal is being investigated by the Marketplace Company (M-Co), which operates Australia's electronic Green Electricity Market, used for RECs trading.
M-Co director Ken Chapman says by making the distinction clear it would provide greater certainty for electricity customers wishing to support specific renewable forms of energy, such as wind, and improve the efficiency and cost effectiveness of verifying compliance to the scheme.
A similar certificate system using another type of environmental instrument, such as a transferable unit of carbon compensation, may be suitable for the program in New South Wales whereby as of July mandatory targets will require all state electricity retailers to cut greenhouse gas emissions by 5% on 1990 levels by 2007. Details of the scheme, including the selection of a regulator, have not yet been finalised.