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The Large-scale Renewable Energy Target is designed to deliver the majority of the 2020 target, while the Small-scale Renewable Energy Scheme supports the installation of small-scale renewables, such as household solar rooftop panels and solar hot water systems.
This is done through the issuing of certificates for the generation of electricity using eligible renewable energy sources and requiring certain purchasers (called liable entities) to surrender a specified number of certificates for the electricity that they acquire during a year.
Where a liable entity does not have enough certificates to surrender, the liable entity will have to pay renewable energy shortfall charge.
It provides a good example of a developing economy whose power sector has transitioned (in the relatively recent past) from a largely state-operated model to a market-oriented model.
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