Queensland Gas Scheme

The Queensland Gas Scheme commenced operation on 1 January 2005 and was established to boost the state's gas industry and reduce greenhouse gas emissions. The scheme is regulated under Chapter 5A of the Electricity Act 1994 (the Act).

The scheme has been operating successfully in its aims to diversify the state's energy mix towards the greater use of gas, assist in encouraging the development of new gas sources and infrastructure in Queensland and reduce greenhouse gas emissions from the Queensland electricity sector.

Under the scheme, Queensland electricity retailers and other liable parties are required to source a prescribed percentage (currently 13 per cent) of their electricity from gas-fired generation (liability).

Building on the success of this scheme, the mandatory target for gas-fired generation in the state will increase from 13 per cent to 15 per cent in 2010, with the option to increase the target to 18 per cent by 2020. The Queensland Gas Scheme will be transitioned into the Federal Government's Carbon Pollution Reduction Scheme as soon as practicable.

Gas-fired generation is electricity generated from eligible fuels such as:
• natural gas (e.g. liquefied natural gas or compressed natural gas)
• coal seam gas (including waste coal mine gas)
• liguefied petroleum gas
• waste gases associated with conventional petroleum refining

The scheme offers gas-fired generators a direct subsidy to reduce its generating cost.

How the scheme works
A power station that does or will generate electricity from an eligible fuel can apply to become an Accredited Generator under the scheme. The electricity generated from eligible fuels is Eligible Electricity.

Accredited generators create Gas Electricity Certificates (GECs). Each GEC represents one megawatt hour (MWh) of eligible electricity generated.

The GECs are sourced and purchased through the GEC registry by a liable person (usually an energy retailer).  The liable persons are required to surrender their acquired GECs to the Regulator on an annual basis to demonstrate they have met their annual liability. The GECs surrendered, must equate to the prescribed percentage of the liable persons amount of electricity sold or used in Queensland.

If insufficient GECs are surrendered, a penalty is imposed on the liable person.

In order to calculate the amount of eligible electricity generated by an accredited generator, a specific method is applied. The approved methods use factors such as Queensland Usage Factors (QUF) (PDF - 62KB) and Loss Factors (PDF - 90KB). QUFs and Loss Factors are fixed for each financial year.