Market Update 11 August

The VEEC market saw the spot price reach a record high of  $90.00, while the ESC market experienced a short-lived hike to $29.00 to open the week on Monday. Spot ESCs fell on Tuesday to a low of $26.50, recovering by week’s end to a rate of $27.00. PRCs maintained a more consistent level of $1.70, and creation rates stagnated awaiting the approval of the initial round of PRC audits. 

AEMO Response to ISP Concerns

This week saw the Australian Energy Market Operator (AEMO) respond to divisive media alleging that the current Integrated System Plan (ISP) had not considered the cost of generation, transmission, and storage costs, by stating that the claims are “wrong”. A response of this kind from the Operator is not a common one and is likely a reaction to the growing debate around Australia’s green energy transition. 

This follows the determination of five key sites in regional NSW penned by the state government as power plants of the future. This has raised controversy, with Origin Energy’s Eraring plant set to close in two years, questions are emerging as to whether these future power stations are going to be ready to support the grid in time. The state government has expressed confidence in the timeline for the implementation. 

HIR Impacts on ACCU Prices 
The ability to create ACCUs under the HIR method is set to end on the 30th of September, and a recent compliance update by the Emissions Reduction Fund has brought additional focus on accuracy in information and record keeping for registration and crediting, reinforcing the need for more detailed and comprehensive supporting evidence for HIR projects. The compliance guidance can be found here. “HIR sunsetting shouldn’t have a direct impact on spot ACCU prices but may play into anxiety around a supply shortfall,” said Kyle Hamilton, associate director of markets, RepuTex, a carbon market research firm.

ACCC Comments on Company Greenwashing
The Australian Competition and Consumer Commission (ACCC) has made comment on their concern for companies Greenwashing and inflicting potential harm on both businesses and communities. The ACCC will look to place more pressure on businesses deemed to be engaging in greenwashing. The ACCC deputy chair, Catriona Lowe, has warned companies against making misleading claims about being ‘environmentally friendly’, ‘compostable’, or being a ‘sustainable production’, where many products, particular to the clothing, cosmetics, and food industry, were found in a survey not to be able to substantiate these benefits. “The misuse of these terms could reasonably mislead consumers and cause harm to those businesses that are doing the right thing when it comes to sustainability.

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.

Angus Taylor | Business Development Manager, Energy & Carbon Services
Angus specialises in ESS activities including Heat Pumps, Air Conditioning, and Commercial Lighting.