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Large-scale generation certificate market update and position on carried forward shortfall

04 October 2018

The Clean Energy Regulator has released:

Current market observations

  • Since 2016, 10,066 megawatts of new large-scale capacity has been firmly announced, exceeding the 6400 megawatts required to meet the 2020 target. Of this capacity, 8332 megawatts is either already built or under construction.
  • New renewable energy power station accreditations are accelerating faster than anticipated. We now anticipate over 3400 megawatts of new capacity to be accredited during this year and up to 4300 megawatts in 2019. This is considerably higher than our May 2018 estimate.
  • In 2018 to date, 2278 megawatts of new capacity has been accredited and 1307 megawatts is currently under application. We expect at least another 200 megawatts to apply for accreditation this year.
  • The Clean Energy Regulator has been approached regarding our position on carried forward shortfall (up to 10 per cent) and paid shortfall (over 10 per cent). Our previous market update stated that the use of these mechanisms is a commercial matter for liable entities. Given that the Renewable Energy Target will be clearly exceeded, the Clean Energy Regulator has no objections to the use of shortfall in the expectation that clients would true up these positions with LGCs in a subsequent year, as allowed for under the law. For more information, see Industry update on surrender of LGCs.
  • LGC prices have fallen significantly since our last market update. Spot LGCs closed at $71.90 on 27 September 2018, having dropped to the lowest price levels since October 2015.
  • 15.7 million LGCs have been validated to 27 September 2018 with a further 1.4​ million pending. We expect hydro power stations to create 2018 LGCs during this year. Our previous estimate of 24 million LGCs validated for the 2018 assessment year may be exceeded. We now expect the surplus after the February 2019 surrender date to exceed 5 million certificates.

For the complete market update please read the Large-scale generation certificate market update – October.


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