Market Update | 25 August

• City of Sydney puts forward interest in banning gas connections

• VIC Gov increases penalties for energy distributors

• The Solar Homes Program enables further access to rebates for households in VIC

This week has seen the lowest ESC spot price since prior to March 2020 on the back of high certificate supply paired with high volume trades seen through the week. The VEEC spot price holds steady as the market maintains weekly undersupply awaiting the set-to-be-released VEU Roadmap. PRCs continue to be quiet and steady in the spot while forwards for June 2024 through to December 2024 saw a spread of trades in 25k parcels.

LGCs saw thinner liquidity than average in the spot and with volatility fluctuating within the week. The closing spot provided a negative trend overall. Noteworthy high-volume trades were seen for Cal25s, with single trades as high as 125k trading sideways at $45. This is in comparison to other vintages experienced softening.

Generic ACCUs saw marginal activity for the week and smaller trade volumes edged the spot lower while forwards tracked positively for April 2024.
The HIR spot was also subject to volatility with a decline and recovery pattern off the back of sizeable trade volumes. The method-specific ACCUs closed the week without any movement.

City of Sydney Proposed Gas Connection Ban 

The City of Sydney has announced it is welcoming of banning gas connections within its borders following on from the recent ban seen in Victoria, in step with other local councils such as Waverley Council. Waverley recently banned gas in new buildings and the City of Parramatta has banned gas connections in new buildings in the city centre. With current research reinforcing the significant savings potential, emissions reduction, and mitigation of health risks, the statement from City of Sydney has garnered some support, but has not been formally approved as a motion. “The City is committed to having net zero emissions in our area by 2035. Reducing fossil fuels is a key part of this. Until this happens, we’re looking at other ways we can electrify residential homes and reduce new gas connections within the City of Sydney.” A spokeswoman from City of Sydney said.

Victorian Government Strengthen Penalties for Electricity and Gas Distribution Code Breaches

South of the NSW border the Victorian Government is looking to bolster the protection of electricity and gas consumers by implementing stricter penalties to distributors for breaches of the Electricity Distribution and Gas Distribution System Codes of Practice. Breaches seen to be causing significant consumer harm or adverse market outcomes could face court-ordered penalties of up to $10 million. Lesser breaches, such as inadequate complaint handling, may result in penalties of up to $1.5 million.

The new penalties build on the State Government’s Energy Fairness Act 2021, which banned unsolicited door-to-door sales, cold-calling, ‘win back’ and ‘save’ offers by energy retailers. The new policy seeks to align measures in place for retailers with their distributor counterparts.
Lily D’Ambrosio, the Victorian Minister for Energy & Resources, stresses the importance of deterring rule-breaking by energy distribution businesses and ensuring consumer protection during the ongoing renewable energy transition.

Solar Homes Program Income Threshold Increased

As a counterweight to the proposed penalties to be regulated on the distributor network, the Victorian Government has also just increased the combined household income threshold for the Solar Homes Program from $180,000 to $210,000, enabling further access to rebates for the installation of renewable and efficiency technology at home, including heat pumps. The increase makes room for an additional 10,000 households across the state that will be now able to leverage the incentives. 

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.