This week in the certificate markets, LGCs took center stage on Thursday as stark opinion pieces followed an announcement of an expansion to the Capacity Investment Scheme (CIS). PRCs saw a marginal increase to $1.34 from their last rate of $1.30, and ESCs continued to decline from $24.95 to $24.50. ACCUs saw moderate activity, and VEECs continued to climb hitting a recent high of $87.00.
1.13 LGCs Trade on Thursday Following Inflammatory Opinion Pieces on the Renewable Energy Target
On Thursday the LGC market saw a reflexive response following inflammatory opinion pieces released claiming the Renewable Energy Target is dead. The articles arose following Federal Energy Minister Chris Bowen’s announcement of an expansion of the Capacity Investment Scheme, after the scheme was first announced in late 2022. The expansion marks significant positive investment by the Federal Government, placing a strong propulsion toward the 82% renewables target by 2030. In alignment with its design, the CIS underwrites renewable investment through both floor and capped pricing mechanisms.
Importantly, to date, there has been no government commentary on the Renewable Energy Target (RET). In the wider environment, many industry bodies such as the Clean Energy Council and the Smart Energy Council are advocating for an extension or expansion of the RET given its marked success and suitability.
In a knee-jerk response a total of 1.13 million LGCs traded in quick succession, with large activity placed from the Spot Market through to the 2028 vintage. While the Spot moved down in a minor way, all traded vintages fell by a range of $2.00-$6.00.
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.