The federal government has a target capacity of 9.5 million megawatt hours from renewable sources by 2010.
Under the Renewable Energy (Electricity) Act 2000, to avoid shortfall charges, wholesale purchasers of electricity must contribute towards the generation of renewable energy.
Wholesale energy purchasers have the option of paying charges equivalent to 1.25% of the total energy purchased in a year, with collected monies spent on the development of renewable energy sources.
Alternatively, wholesale purchasers can meet their renewable energy requirements by surrendering renewable energy certificates (RECs).
Energy purchasers can create RECs by using eligible renewable power stations, small generation units and solar water heaters.
One REC represents one megawatt hour of renewable electricity generated above a power station's baseline, or 1MWh of electricity displaced in the case of a solar water heater.
The Australian Government's Renewable Energy Regulator this week released details of RECs surrendered under the Act for the 2001 to 2004 compliance years, saying that energy wholesalers had increased the surrender of RECs year-over-year to achieve renewable energy compliance.
The REC scheme was introduced by the Australian Government to encourage the additional development and generation of renewable energy within Australia.
The renewable energy requirement for 2004 was 1.25% of liable energy throughout Australia. The renewable energy target for 2004 was 2.6 million MWh.
Targets will increase annually until they reach the "peak level" of 9.5 million MWh in 2010, in line with the federal Mandatory Renewable Energy Targets (MRET).
"In 2001, the first year of operation, just over 92% of compliance was by REC surrender," said the federal regulator, David Rossiter.
"For 2004 compliance exceeded 99.8%, which is very good news for the renewable energy industry as RECs directly assist developers of additional renewable energy in Australia. This high level of compliance maximises support for the renewable energy industry."
Rossiter said that some companies who had failed to pay shortfall charges in previous years had achieved compliance by surrendering additional RECs in 2004.
For the 2004 compliance year, only six liable wholesale energy purchasers have not chosen to meet their renewable energy requirements by surrendering RECs.
The regulatory body identified the six companies as Aurora Energy, Bulwer Island Energy Partnership, Newmont Mining Services, Perth Energy, Victoria Electricity and Yamasa Australia.
The combined shortfall of the six companies is equivalent to 2827 RECs.
The federal regulator said 5.76 million RECs had been surrendered over the first four years of compliance, falling just short of the 5.8 million cumulative mandated target.
