I'm having trouble understanding the 'render element' key purpose when implementing hook\_theme().

```
function personal_news_theme($existing, $type, $theme, $path) {
  return array(
    'teaser_list_by_user' => array(
      'render element' => 'element',
    ),
  );
}

```

I did my research and the way I understand it, the `render element` key is use when creating a theme function to modify another theme function's output ONLY! And there's no way to use it as to implement a new theme function.
If I'm wrong, how can I use it instead of `variables`?