Environmental Charges
In accordance with the Australian Government’s Renewable Energy Target, energy retailers are legally obliged to ensure at least a specific amount of electricity generation comes from sustainable and renewable sources each year. Various incentives and environmental schemes drive this program and the costs are subsequently passed through to all energy customers.
What is the Renewable Energy Target?
To reduce greenhouse gas emissions in the electricity sector, the Commonwealth Government has introduced the Renewable Energy Target (RET). The scheme encourages the industry to generate more electricity from sustainable, renewable sources such as rooftop solar.
The RET operates at two levels:
Large-scale Renewable Energy Target (LRET)
The LRET reduces emissions in the electricity sector by incentivising large-scale investment in renewable energy.
Large-scale Generation Certificates (LGCs) are created and traded as a means to financially incentivise renewable energy creation. LGCs can be created by generating electricity from renewable energy sources, such as solar and wind, with one LGC equivalent to 1 MWh. Each year, energy generators such as power stations and other liable entities, must provide enough LGCs to offset the emissions they generated during that year. Some of the cost for these LGCs are passed on to energy retailers and in turn to energy customers.
The cost to achieve the LRET is shown as the Large-scale Renewable Energy Certificate (LREC) charge on your Origin Zero invoice.
Small-scale Renewable Energy Target (SRET)
At an individual, small business and community level, the SRET is the equivalent program to incentivise investment in renewable energy systems. Certificates are created based on smaller-scale renewable energy generation and are then traded to offset emissions.
The small-scale Renewable Energy Scheme section on the CER website is a great source of information on this scheme.
On your Origin Zero invoice, the cost to achieve the SRET is shown as the SREC or Small-scale Renewable Energy Certificate charge.
Understanding the ‘LREC Charge’ on Your Invoice
The Clean Energy Regulator publishes the Renewable Power Percentages (RPP) report in March each year, to track the industry’s progress against incremental RET targets. In doing so, they report on the current year’s actual figure and make an estimate at what the following year’s percentage will likely be.
Some customers, depending on their Electricity Supply Agreement, are charged for LREC against the ‘forecast environmental %’ as estimated in the RPP report. Once the actual RPP is published, we will include an adjustment for the difference between the forecast and actual figure.
Check the section titled ‘Environmental Products & Rates’ on your Electricity Supply Agreement to see further details about your specific rate structure.
What is the ‘SREC
Charge’ on Your
Invoice?
Similar to the renewable power percentage, small-scale technology percentages are published by the Clean Energy Regulator. Again, the figures published are a final figure for the previous year, and a forecast percentage figure for the coming year. Adjustments to your small-scale technology percentage charge are made in April to align to the actual percentage realised.
Other Charges
While the LRET and SRET are calculated at a national level, individual states also have green schemes to address their own sustainability goals. To learn more about any state-based charges on your bill, refer to the respective state government websites: