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Market Recap | October 2023

In case you missed it, here’s a recap on what’s been happening in the energy market over the last month.

Queensland Government Expand Rebate Program to SMEs

This week, the Queensland Government announced its expansion of the household appliance cashback scheme to small and medium-sized businesses. The rebates provided will be up to 50% of the cost of high-efficiency appliances, and cover an expanded range in comparison to the household program. Eligible technologies include fans, lights, motors, compressors, and chillers.

Carbon Border Adjust Mechanism (CBAM) was launched in Europe

Last Sunday, the Carbon Border Adjust Mechanism (CBAM) was launched in Europe to start taxing carbon-intensive imports from 2026. Prior to this date the imported aluminium, cement, iron and steel, fertilisers, electricity, and hydrogen will begin by reporting the embedded carbon emissions in the products. Imports from countries with higher carbon values per unit of production and fewer recognised offsets will ultimately be taxed more highly and increase the cost. The requirement to report will necessarily be on the European purchaser of the product. Products will be encouraged to be provided with fully verified emissions data as defaults will be applied where they are not. The defaults will logically be set very conservatively.

In effect, CBAM extends the reach of the ETS to all those covered products being imported into Europe. The number and type of products will be expanded over time. The ability for Australian exporters to respond in a positive manner to the challenge of both reporting and remaining competitive is largely within the control of the companies involved. Whilst it is true that Australia has some experience in reporting voluntarily and through the National Greenhouse Emissions Reporting Scheme (NGERS), the intensity of emissions per unit of production in Australia compared to other countries is generally less favourable.

Many of the emissions reduction activities from using less intensive inputs to varying inputs to production can benefit from Federal and state-based support through grants, rebates, and incentives. CBAM could, for those able to measure and reduce emissions, be seen as an opportunity to successfully compete with products from other countries with a less developed or supported emissions reduction industry.

CEC launch Power Playbook for Australia’s clean energy revolution future

The Clean Energy Council has unveiled its Power Playbook, a comprehensive set of 45 strategic proposals for the Australian Federal Government to achieve 82% renewable energy by 2030. Titled “Power Playbook – Accelerating Australia’s Clean Energy Transformation,” the submission outlines a blueprint for a formalised national master plan. Key recommendations include a $10 billion per annum Clean Energy Transformation Investment Package, a ‘Renewable Energy Superpower Masterplan’, and full decarbonization of the electricity sector by 2035. The proposal also advocates for an extended Large-scale Renewable Energy Target (LRET) beyond 2030 and national targets for rooftop solar and distributed energy storage. Additional suggestions involve expanding the Small-scale Renewable Energy Scheme, establishing a national offshore wind target, and major investments in green hydrogen, green iron, and energy transition minerals processing. The submission emphasises the need for streamlined project assessment processes and a National Clean Energy Supply Chain strategy. Clean Energy Council CEO, Kane Thornton, stressed the historic opportunity for Australia to lead in renewable energy and urged a unified approach. The proposal also calls for prioritising investment in green hydrogen and minerals processing markets over the next decade.

Solar reaches new heights for demand records

A new solar energy milestone was achieved in South Australia, with rooftop and large-scale solar together meeting an impressive 126.7% of the state’s peak energy demand at 12:55 pm (AEST) on Sunday. This follows last week’s feat where rooftop solar alone covered over 101% of state demand. Rooftop solar reached a peak of 95%, while utility-scale solar contributed the remaining 31.6%. This excess energy was either exported to Victoria or stored in the state’s growing household battery portfolio.

In another significant development, rooftop solar PV in New South Wales (NSW) set a new output record of 4223 MW on Monday, up from 4175 MW just five days prior. It also accounted for an impressive 47.4% of demand, up from 46% in late September. These shifts signify a major transition in Australia’s energy landscape, showcasing the substantial progress being made in renewable energy adoption.

NSW announces ambitious Net Zero climate Bill 2023

The NSW Government has introduced the Climate Change (Net Zero Future) Bill 2023, a landmark legislation aimed at enshrining emissions reduction targets in law for New South Wales. The bill commits to cutting greenhouse gas emissions by at least 50% by 2030 and achieving net-zero emissions by 2050. This move provides, most importantly, certainty and opportunities for households, industries, and clean energy investors in the pursuit of climate action. The bill also introduces the Net Zero Commission to monitor progress through to 2030, and ensure transparency and accountability all the while. The government aims for community-led, informed, fair, and transparent climate action by engaging with diverse regions and communities.

Proposed changes to the PDRS:

  • Improvements to the pool pump activity to increase viability
    • The method has been simplified to remove the pool volume as a calculation.
      input, and instead use the projected annual energy consumption and daily run time values from the GEMS Registry.
    • The adjustment factors have been increased from 0.28 to 0.42.
    • The claiming period has been decreased from 12 years to 7 years.
  • The heat pump hot water equation will be updated to add a capacity factor
    • A capacity factor will be added to the method to align it with ESC creation.
    • Notice has been given that any changes to heaps pumps under the ESS Rule, creating ESCs, will be mimicked under the PDRS.
  • Addition of the requirement for demand response capability for HVAC1 and HVAC2
    • All installations of new high-efficiency air conditioners must have inbuilt demand response capabilities.

Proposed Additions to the PRDS

  • Wholesale Annual Response Mechanism (WARM)
    • This is an incentive for users with capacity participating in the Wholesale Demand Response Mechanism. Incentives are based on the amount of demand response capacity provided to the market over the summer period.
    • Peak Energy Reduction Certificates will be created annually based on actual capacity.
    • The WARM leverages the Wholesale Demand Response Mechanism (WDRM) to incentivise the availability of demand response capacity from large energy users in the form of Wholesale Demand Response Units (WDRU).
  • Residential Batteries One: Install a new behind-the-meter residential battery energy storage system
    • Available to households where certificates are created based on an estimated load shifted by the battery outside of the peak period.
    • One-off certificate creation based on the lifetime of the battery.
  • Residential Batteries Two: Sign a behind-the-meter residential battery energy storage system into a demand response contract
    • PRCs will be created on an annual basis rather than as a ‘once-off’.
  • Demand Response Residential HVAC: Sign a residential air conditioner into a demand response contract
    • Incentives are based on an estimate of the air conditioner load reduction when the set point temperature is increased.
    • PRCs will be created on an annual basis rather than a ‘once-off’.

Industry-backed campaign to meet clean energy workforce gap

Billionaire software developer Mike Cannon-Brookes has emphasised that the climate and clean energy sectors are poised to become Australia’s leading employers. This comes as part of a new initiative called Careers for Net Zero, led by the Clean Energy Council and Energy Efficiency Council. The campaign aims to address a growing workforce gap as Australia targets 82% renewables by 2030. It is estimated that two million new jobs will be needed to achieve net zero by 2050, along with 200,000 to meet the federal government’s 2030 emissions reduction goal. Cannon-Brookes stressed the urgency, stating that while the technology is available, time is running out.

The campaign will spotlight ten Australians already active in the sector and introduce an online “career explorer” tool through the Careers for Net Zero website. The Victorian government is also endorsing the campaign, unveiling the re-launch of the state-owned utility, the State Electricity Commission (SEC). The SEC plans to develop multiple gigawatts of new renewables and energy storage, aiming to create 59,000 clean energy jobs through its Centre of Training Excellence.

SEC announces big plans for VIC energy transition

As an extension to the above, the Victorian Government has outlined the SEC Strategic Plan 2023-2035 to boost renewable energy supply by focusing on increasing storage, onshore generation, and building industry confidence.

The Strategic Plan’s three priorities for the next 10 years include:

    • Investing to accelerate the energy transition
    • Supporting the switch to all-electric households
    • Building a renewable energy workforce.

The plan includes a $1 billion investment to construct 4.5 gigawatts of renewable energy and storage projects, supporting 2.6 gigawatts by 2028.

As well as supplying to commercial and industrial customers the SEC will also launch a pilot program next year in attempt to assist the electrification of older homes and transition them away from gas.

The plan anticipates savings of approximately $1,400 per year for detached homes transitioning to electric power, with additional benefits for solar-equipped households.

Call for REGOs to include emissions declaration

The Clean Energy Investor Group (CEIG) believes that including emissions data on renewable energy certificates, specifically the Renewable Electricity Guarantee of Origin (REGO), could drive demand for new renewables and storage. The CEIG’s proposal calls for data on the emissions displaced by each megawatt-hour of renewable electricity, while the government is considering adding timestamps to REGO certificates. CEIG argues that the necessary data is already available through the Australian Energy Market Operator’s Carbon Dioxide Equivalent Intensity Index (CDEII), and could empower buyers to understand the emissions reduction achieved through their purchases.


Regarding energy storage, the proposed REGO scheme poses challenges. Batteries are expected to surrender REGOs for all absorbed grid electricity during charging, then claim REGOs for dispatched energy, potentially resulting in losses. The CEIG suggests making the market voluntary to avoid market distortions and any risk of discouraging battery installations.

Additionally, the REGO scheme may impact the existing Renewable Energy Target (RET) by including pre-1997 renewable generation. The government aims to prevent double counting and limit certificate surrender before 2030. The CEIG recommends creating a two-tier certificate system or restricting certificate use for emissions-intensive trade-exposed activities.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.

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