Market Update | 31 July 2026

• The PDRS & BESS: what we know and what we are waiting for

• Smart Energy Council report highlights need for reform for ‘Missing Middle’

• Victorian regulator confirms changes to Air Conditioning, effective 30 September

• Highly-electrified buildings better placed to manage energy flex

NSW Commercial Batteries: what we know so far and what we’re waiting for.

Since the release of the PDRS Rule at the start of the month, the Ecovantage Team has been working behind the scenes to prepare for the commencement of the much-anticipated commercial batteries activities;

• • BESS3: Apartment Buildings
  • BESS4: Small & Medium Businesses, and
  • BESS5: Commercial & Industrial Business

To help cut through the noise, Nancy Sanjoto has published an article The PDRS & BESS: What We Know and What We are Waiting For.

Ecovantage welcomes SEC’s ‘Missing Middle’ report.

Ecovantage welcomes the Smart Energy Council’s recent body of work analysing the underlying causes for the lack of uptake within the commercial and industrial sector. The analysis highlights the potential of the underutilised segment and the key drivers behind the inactivity in renewable energy deployment.

Referred to as the ‘missing middle’, the findings identify regulatory and policy structural blind spots that fail to provide clear market signals to stimulate investment in 100kW-30MW systems, while administrative burden continues to present challenges for the increasingly rare projects that successfully move beyond final investment decision.

Ecovantage supports the report and its key recommendations – in particular;

• • Increasing the threshold for system sizes under the Small-scale Renewable Energy Scheme (SRES) to between 500kW-1MW

  • Setting a $25/MWh floor price for Large-scale Generation Certificates (LGCs) 

  • Reducing red tape by implementing measures such as standardisation of the connection process, and

  • Introducing tax incentives for landlords and owner-occupiers through accelerated depreciation and green lease agreements.

Ecovantage looks forward to the full release of the report and would warmly welcome the introduction of its findings.

VEU Air Conditioning set for changes from 30 September.

The Victorian regulator has confirmed that the proposed changes released via consultation earlier this year will come into effect from 30 September.

The consultation outlined concerns resulting from field audits conducted by the VEU’s audit and enforcement team, which highlighted instances of over-sizing of multi-split air conditioning units.

It was revealed that consumers were sold systems vastly oversized for the size and profile of their home, driven by a desire to maximise VEEC revenue.

The proposed changes will therefore;

1. Limit incentives on multi-split air conditioning units, capping VEEC values to 20kW. Any systems sized above 20kW can still be installed but will only attract VEEC revenue to the 20kW level.
2. Increase the minimum co-payment on multi-split and ducted air conditioning systems above 10kW to $3,000 (incl. GST).

Included in the communication was a reminder that the regulator will continue to conduct field audits and target those who fail to size systems in alignment with regulatory guidance.

Read the full communication here.

NABERS report finds energy flex capability maximised in highly-electrified buildings.

The NABERS Energy Flexibility Feasibility Study, funded by the Australian Government, has been released, assessing how commercial buildings can modify, shift, or store electricity consumption to support grid stability during Australia’s transition to renewable energy.

Combining international literature with insights from 72 stakeholders across 36 property, energy, and government organisations, the report explores market readiness and outlines how NABERS can measure and encourage flexible energy management alongside traditional efficiency.

Key points include;

• • Energy flexibility enables commercial properties to shift peak electricity loads, absorb excess renewable generation, and reduce grid strain without sacrificing indoor environmental quality.

  • While industry interest is high, adoption is constrained by split financial incentives, operational complexities, market regulatory hurdles, and limited technical expertise.

  • The report recommends developing new metrics within the NABERS framework to recognise, reward, and benchmark load-shifting capability alongside operational energy efficiency.

  • The report establishes a phased program of work to integrate energy flexibility into rating tools, aligning commercial real estate practices with national grid transition goals.

To read the report in full, please click here.

Weekly Market Update | 27 – 31 July 2026

Large-Scale Generation Certificates (LGCs)

The LGC market was a buzz of activity this week, with a strong rally on Tuesday resulting in gains across the board.

Driven by strong buying interest, Tuesday’s session saw over 600,000 certificates exchanged, pushing prices above the $6.00 level across vintages, with CAL27s peaking at $7.00. It appeared as though this interest would fail to sustain throughout the week with the spot, CAL26-CAL28s all losing ground on Wednesday and Thursday. However, buying appetite returned on Friday, seeing spot push higher to close at $7.25.

This concludes another wild month in LGCs, with the spot market losing close to 50% of its value a fortnight ago before rebounding and regaining its losses. With ongoing uncertainty regarding requirements for data centres to purchase renewable energy to offset consumption during construction, it remains to be seen where we’ll see LGC pricing head into August and beyond.

Victorian Energy Efficiency Certificates (VEECs)

VEECs experienced another quiet week, as the spot market drifted downwards throughout to close a step lower at $83.00. This comes off the back of another strong month of creation volumes at just over 506,000. Despite this figure representing a decline of approximately 15% on June’s (598,000) volumes, this tracks well against the target set for 2026 at 4.4m.

These strong levels are expected to continue ahead of the scheduled changes to the program’s overwhelming primary creator – Activity 6 (High Efficiency Air Conditioning) – due to be introduced at the end of September. Included in the changes are caps to incentives for multi-split air conditioning units above 20kW, following over-sizing concerns identified during a series of field audit compliance blitzes by the Essential Services Commission.

Energy Saving Certificates (ESCs)

The ESC market saw a soft rebound this week, as the spot returned above the $29.00 level for the first time in a fortnight.

Movement was again limited to the spot market, as forward trading has evaporated over recent weeks, with market participants failing to indicate any buying interest due to a complete lack of certificate activity. Registration volumes have slowed to a standstill, with just 45,000 certificates entering the TESSA portal in July.

Despite the introduction of the Home Energy Saver, given the distinct lack of changes to the program under the newly introduced ESS rule, there are concerns that this inactivity could continue throughout the remainder of 2026. While the liquidity surplus currently remains healthy, this will rapidly erode should registration volumes fail to make any meaningful headway.

Peak Reduction Certificates (PRCs)

The much-anticipated revival of activity in the PRC market failed to accelerate this week ahead of the upcoming introduction of commercial BESS activities. Monday saw the only spot action, with a single 100k spot trade drawing pricing down to $3.00 even before buying interest ground to a halt through the remainder of the week.

The forwards market was a little more lively, though it indicated a relatively steep downwards curve, as strips for late 2026 and early 2027 were agreed between $2.75-$2.78.

Market participants will watch with keen interest, as the newly-introduced BESS activities find their feet and the HVAC activity now permits the installation of multi-split air conditioning units – measures which are anticipated to drive growth in registration volumes.

Australian Carbon Credit Units (ACCUs)

Interest in ACCUs picked up this week with some late-week action seeing both the spot and forwards market trading at a premium. This saw the spot and spot No Avoided Deforestation (AD) markets close at $38.35 and $38.30, up from Monday’s opening of $37.80.

The forwards market showed an upwards curve, as 25k parcels for April and May 2027 agreed at $39.25. The only reported trade in the Method Specific markets was a 5k HIR (Native Title) transaction at $37.00.

Small-Scale Technology Certificates (STCs)

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.