Market Update | 15 September

• NSW Hot Water Activities see co-payments and calculation updates
• Pressure on Federal Government to consider Renewable Industry Package of $100 billion
• RECs tradings agreement reached between AGL and Microsoft

OECC announces upcoming changes to the ESS Hot Water Activities

Earlier this week the Office of Energy and Climate Change (OECC) released a consultation paper to Scheme participants that endeavours to address two key areas:

• Further accuracy for energy savings calculations for residential hot water systems.
• The introduction of hot water activity co-payments to bolster consumer engagement and confidence, Scheme integrity, and increase product and service value.

Calculation amendment
The paper states that current calculations have been identified as not reflective of real-world savings which has prompted the OECC review and updates to ensure the scheme’s benefits are maximised. The updates will reduce the amount of Energy Savings Certificates currently eligible for hot water upgrades by reevaluating the baseline energy consumption and litres per person per day. This adjustment is set to be introduced in the the residential program initially (HEER) but the paper makes comment that further amendments may be considered for the commercial hot water activities in later rule changes.

Co-payments
The second item concerns the introduction of co-payments, which are intended to encourage customer engagement and ensure they receive a suitable product.
The effectiveness of a co-payment hinges on it aligning with a product’s value. The paper acknowledges that the current co-payment requirements for hot water system upgrades may not sufficiently engage customers or consider the high value of the products involved. The new co-payment put forward pertains to both residential and commercial hot water upgrade activities, and is set to a minimum of $200 (ex-GST).

Increased pressure put on the Federal Government to fund $100 billion Renewal Industry Package

A coalition of organisations gathered at the Australian Renewables Industry Summit is urging the Federal Government to commit to a $100 billion Renewable Industry Package over a decade. They fear that without this investment, Australia risks falling behind in the global race for renewable energy leadership. The push aims to seize a rare economic opportunity for the nation.

This trails the government’s commitment made in the last Federal Budget to respond to the passage of historic renewable industry policies overseas, including the Inflation Reduction Act in the United States.

John Grimes from the Smart Energy Council stressed that Australia is at a pivotal moment, with immense potential to lead the global green economy.
“$100 billion package will help re-industrialise the nation, create hundreds of thousands of jobs, diversify our export base and revenue streams as well as increase local value-added production, secure supply chains and develop sovereign manufacturing capabilities.”

 

AGL and Microsoft leverage trades in RECs

AGL Energy has secured a 15-year agreement with Microsoft to provide Renewable Energy Certificates (RECs) from New South Wales’ largest wind farm, Rye Park. This follows AGL’s previous power purchase deal with Tilt Renewables for nearly half of the wind farm’s output. The agreement with Microsoft allows AGL to sell the Rye Park certificates, estimated at 513,000 annually, rather than using them to meet regulatory requirements. The spot price for these certificates has remained high, bolstering revenue streams for renewable projects.