• • Australian Federal Budgets on the Renewable Energy Sector
  • Gas Tariff increased in South Australia as Demand Expected to Fall

Australian Federal Budgets on the Renewable Energy Sector.

The 2026–27 Australian Federal Budget features targeted adjustments rather than vast new funding for utility-scale renewable generation, shifting focus toward system integration, environmental approval streamlining, and local supply chain resilience. A contentious proposal to broaden the 30% Capital Gains Tax (CGT) on foreign investors retrospectively up to 20 years triggered significant sovereign risk concerns from international backers, who provide three-quarters of Australia’s clean energy capital. In response, the government introduced a temporary 50% CGT transitional discount for eligible renewable generation and grid-firming battery assets, while signaling that further policy refinements remain under consideration following investor consultation.

Key market data points and allocations include:

• $425 million: The provision cost over four years to fund the temporary foreign investor CGT discount until June 30, 2030.
• $20 billion per year: The estimated investment required to keep pace with Australia’s target of 82% renewable grid power by 2030.
• Over $7 billion: In continuing funding to subsidise home batteries through the Cheaper Home Batteries scheme.
• Over $500 million: Allocated to establish the National Environmental Protection Agency and accelerate green project planning approvals.
• $97.2 million: Dedicated to launching a Consumer Energy Resources (CER) National Technical Regulator for distributed grid management.
• Up to $1 billion: Committed to supporting the transition of the Boyne Island aluminium smelter to renewable energy.
• 40GW by 2030: The Capacity Investment Scheme (CIS) target, underwriting 75 generation and storage projects with a 90% revenue floor safety net.

Gas Tariff increased in South Australia as Demand Expected to Fall.

A forecast 20% drop in South Australian gas demand over the 2026–2031 period has been announced as consumers switch to cleaner, cheaper electricity, creating financial instability for the pipeline network despite a lack of state policy incentives. To manage this transition, the Australian Energy Regulator (AER) is intervening by capping Australian Gas Networks’ (AGN) recoverable revenue at $1,370.3 million. The immediate impact of recovering this revenue from a shrinking customer base is an average annual tariff increase of 3.9%, which will raise annual bills by $26 for households and $266 for small businesses.

As a regulatory solution, the AER has approved $29 million in accelerated depreciation to mitigate asset stranding risks and allocated an extra $22.8 million to partially socialise connection abolishment costs, while joining consumer advocates in calling for a coordinated government and industry framework to prevent remaining consumers from bearing an unfair cost burden.

Weekly Market Update | 18 – 22 May 2026.

Large-Scale Generation Certificates (LGCs)

LGC spot price experienced a steady downward trend across the week, as shown by softening values and fluctuating intraday volatility. The week opened on Monday with flat trading at $2.40, a level that held through most of Tuesday before a late dip to $2.35. Wednesday saw increased volatility as prices toggled sharply between $2.30 and a temporary rebound back to $2.40. However, the downward pressure resumed on Thursday, pulling trades down to $2.30 and a low of $2.25. The week concluded on Friday reaching a weekly low of $2.20 alongside minor late resistance at $2.35.

The LGC forward mirrors this softening. On Monday and Tuesday, Cal26, fluctuating between $2.55 and $2.65, while Cal27 started strong at $2.60 before declining mid-week down to a low of $2.35 on Wednesday and Thursday. Friday marked a major liquidity event for Cal27, to settle firmly at $2.40. Further out the curve, Cal28 dropped from $2.25 down to a low of $2.05 on Friday, while the Cal29 and Cal30 strips dipped mid-week but closed Friday, drifting down to a final mark of $1.95.

Victorian Energy Efficiency Certificates (VEECs)

The VEEC spot market experienced a mid-week peak before softening on Friday, closing down 50 cents from its weekly high. Trading opened on Monday at $89.00 across modest volumes (15k total) before gaining upward momentum on Tuesday and Wednesday, consolidating at a higher flat rate of $89.50 across 65k total traded. Thursday touched a high of $89.70 (15k) while most volume traded at $89.50. However, buying pressure faded on Friday, with prices sliding back to $89.00 before a wave of late-week selling pushed the spot down to a low of $88.50.

The VEEC forward market experienced highly concentrated, steady liquidity through mid-year vintages across the week. Action kicked off on Monday with a 6k trade in Jun-26 trading at $89.25, but momentum shifted firmly to a $90.00 ceiling from Tuesday through Thursday. Followed by a 25k total trade in the Oct-26 – Dec-26 strip on Tuesday, combined with a 20k trade across Aug-26 and Sep-26 mid-week. Late-week activity also revealed a slight premium for Jul-26 – Aug-26, pushing briefly to a week-high of $90.25 on Thursday, while long-dated Mar-27 – Apr-27 paper found a steady floor just below the curve at $89.75.

Energy Saving Certificates (ESCs)

The ESC spot market saw a distinct downward decline this week. Trading opened steadily between $28.40 and $28.50 across Monday and Tuesday on light volume (15k total). On Wednesday a total of 123k certificates traded in the market putting a downward pressure on the spot price falling from $28.40 to a low of $27.60. The downward momentum slowed by Thursday with a lone 5k parcel clearing lower at $28.00 by Friday with no trades reported.

ESC forward market remained concentrated mid-week, with no trades recorded on Monday, Tuesday, or Friday. The week’s volume was driven by identical transactions on Wednesday and Thursday, where Jul-26 – Aug-26 ESC Strip packages traded at $28.00 at a clip of 10k per month, bringing the total weekly traded volume to 40k. Only one put option trade went through to short ESCs at $28.00 for $1.50 on a 50k trade went through this week.

Peak Reduction Certificates (PRCs)

A quiet week for PRCs this week with the market opening at $3.07 on a single 50k trade. And one forward trade for Feb-27 at $3.10 for a 50k trade. No other trades reported for the week.

Australian Carbon Credit Units (ACCUs)

Overall ACCU Generic spot activity was limited but showed marginal upward movement, opening Monday at $37.50 across two tranches (10k and 25k), dipping mid-week on Wednesday to a single 20k trade at $37.35, and recovering back to $37.50 on Friday with a 10k trade. Meanwhile, ACCU No AD experienced volume downswing early in the week before rebounding; prices steadily cascaded on Tuesday from $37.30 down to a low of $37.15 across multiple volume clips totaling 185k, recovered slightly on Wednesday to $37.35 (35k total), and fully corrected upward by Thursday to close at $37.50 in a 50k block.

The ACCU No AD forward market saw trades confined entirely to mid-week sessions. Both Monday and Tuesday recorded no market activity, before June-27 (No AD) contracts established a steady price floor mid-week. On Wednesday, 25k of June-27 (No AD) traded at $38.50, a level that was exactly mirrored on Thursday with another 25k transaction at $38.50. No trades reported on Friday.

Small-Scale Technology Certificates (STCs)

An unusually quiet week for STCs saw just a single 75k spot trade on Monday at $39.62, with no further activity reported. This stagnation aligns with the official REC Registry, where the Clearing House remains stuck in a heavy surplus of over 13.5 million STCs, signaling a substantial backlog that forces homeowners and businesses to wait in a lengthy queue for their cash. To bypass this delay, Ecovantage can deliver STC returns significantly faster than the current registry wait times; if you have upcoming jobs, feel free to give us a quick call to discuss how you can trade directly with us.

Certificates spot prices & graphs available at Market Update >

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.