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Volume weighted average market price for large-scale generation certificates

31 October 2016
RET

Before the introduction of full exemption for emissions-intensive trade-exposed activities, the Clean Energy Regulator was required to estimate the volume weighted average market price per large-scale generation certificate.

The volume weighted average market price per large-scale generation certificate was used in calculating the partial exemption assistance rate, in order to account for the cost component of the Large-scale Renewable Energy Target.

Volume weighted average market price for large-scale generation certificates in 2015

The Clean Energy Regulator has estimated the volume weighted average market price for a large-scale generation certificate for the 2015 year as $29.38.

In order to make this estimate, the Clean Energy Regulator sourced market data from TFS Australia Pty. Limited (TFS). As a broker of environmental products, TFS collect data associated with the LGC trades that they facilitate or are facilitated by other brokers and reported in the market.

The price per large-scale generation certificate and volume of large-scale generation certificates as provided by TFS for each spot market trade in the period from 1 October 2013 to 30 September 2014 was used to calculate a volume weighted LGC price as follows:

 

Where, for each trade i:

P is the price per LGC

Q is the volume of LGCs

Data from spot market trades was used as the basis for the estimate because this data represents objective and arms-length transactions which are representative of the market value of an LGC.

Volume weighted average market price for large-scale generation certificates in 2014

The Clean Energy Regulator has estimated the volume weighted average market price for a large-scale generation certificate for the 2014 year as $35.24.

In order to make this estimate, the Clean Energy Regulator sourced market data from TFS Australia Pty. Limited (TFS). As a broker of environmental products, TFS collect data associated with the LGC trades that they facilitate or are facilitated by other brokers and reported in the market.

The price per large-scale generation certificate and volume of large-scale generation certificates as provided by TFS for each spot market trade in the period from 1 October 2012 to 30 September 2013 was used to calculate a volume weighted LGC price as follows:

 

Where, for each trade i:

P is the price per LGC

Q is the volume of LGCs

Data from spot market trades was used as the basis for the estimate because this data represents objective and arms-length transactions which are representative of the market value of an LGC.

Volume weighted average market price for large-scale generation certificates in 2013

The Clean Energy Regulator is required under Regulation 22ZH to estimate and publish the volume weighted average market price for a large-scale generation certificate for the following year, by 31 October of the current year.

The Clean Energy Regulator has estimated the volume weighted average market price for a large-scale generation certificate for the 2013 year as $38.69.

In order to make this estimate, the Clean Energy Regulator sourced market data from Next Generation Energy Solutions (Nextgen). As a broker of environmental products, Nextgen collect data associated with the LGC trade that they facilitate or are facilitated by other brokers and confirmed by two independent sources as true.

The price per large-scale generation certificate and volume of large-scale generation certificates as provided by Nextgen for each spot market trade in the period from 1 October 2011 to 30 September 2012 was used to calculate a volume weighted LGC price as follows:

 

Where, for each trade i:

P is the price per LGC

Q is the volume of LGCs

Data from spot market trades was used as the basis for the estimate because this data represents objective and arms-length transactions which are representative of the market value of a LGC.

Volume weighted average market price for large-scale generation certificates in 2012

The Regulator is required under Regulation 22ZH to estimate and publish the volume weighted average market price for a Renewable Energy Certificate (REC)/Large-scale generation certificate (LGC) for the following year, by 31 October of the current year. The Office of the Renewable Energy Regulator was amalgamated into the Clean Energy Regulator on 2 April 2012.

The Regulator has estimated the volume weighted average market price for a REC/LGC for the 2012 year as $35.24.

In order to make this estimate, the Office of the Renewable Energy Regulator sourced market data from Next Generation Energy Solutions (Nextgen). As a broker of environmental products, Nextgen collect data associated with the REC and large-scale generation certificate (LGC) trades that they facilitate or are facilitated by other brokers and confirmed by two independent sources as true.

This year's calculation included data from RECs and LGCs, as the scheme began separately trading LGCs on 1 January 2011. The price per REC/LGC and volume of RECs/LGCs as provided by Nextgen for each spot market trade of the relevant certificate in the period from 1 October 2010 to 30 September 2011 was used to calculate a volume weighted REC price as follows:

 

Where, for each trade i:

P is the price per REC/LGC

Q is the volume of RECs/LGCs

Data from spot market trades was used as the basis for the estimate because this data represents objective and arms-length transactions which are representative of the market value of a REC/LGC.

Volume weighted average market price for large-scale generation certificates in 2011

The former Office of the Renewable Energy Regulator has estimated the volume weighted average market price for a Renewable Energy Certificate (REC) for the 2011 year as $38.39. The Office of the Renewable Energy Regulator was amalgamated into the Clean Energy Regulator on 2 April 2012.

In order to make this estimate, the former Office of the Renewable Energy Regulator sourced market data from Next Generation Energy Solutions (Nextgen). As a broker of environmental products, Nextgen collect data associated with the REC trades that they facilitate. The Office of the Renewable Energy Regulator additionally sought to obtain data from other REC brokers and market analysts, but found no other suitable sources with the ability to provide the type and detail of data required.

The price per REC and volume of RECs as provided by Nextgen for each spot market trade in the period 1 October 2009 to 30 September 2010 was used to calculate a volume weighted REC price as follows:

 

Where, for each trade i:​

P is the price per REC

Q is the volume of RECs

Data from spot market trades was used as the basis for the estimate because this data represents objective and arms-length transactions which are representative of the market value of a REC.

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