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Environmental Certificate Scheme Prices from Jan – Mar 2020 (STC, LGC, VEEC and ESC)

Environmental Certificate Scheme Prices (Jan – Mar 2020)

Environmental certificates bring money to the table for lots of businesses in the renewable energy and the energy efficiency sectors. The fact that they can be such a large proportion of your income means it’s a good idea to keep tabs on environmental certificate scheme prices.
There are four main types of environmental certificate schemes: two established under a national scheme and two under state-based schemes.

These environmental certificates are bought and sold on a daily basis, and the value or price of each certificate scheme fluctuates daily based on demand and supply factors. 

Spot Trade Market Update: Environmental Certificate Scheme Prices – STCs, LGCs, VEECs and ESCs (Jan-Mar 2020)

The environmental certificate scheme prices outlined below are snapshots of spot trade prices at particular points in time (at month’s end January, February and March 2020) for monthly comparison and trend analysis purposes.

 Table outlining the price of certificates for various schemes (Jan - Mar 2020)

Environmental Certificate Scheme Prices: Small-scale technology certificates (STC) prices are relatively stable between the $37 – $40 mark, while Large-scale generation certificates have fallen sharply over the last quarter, from $42.00 in January to $28.30 in March, falling an average of 18% each month in the same period. NSW-based projects will benefit from the sharp increase of 35% in the price of Energy Saving Certificates (ESCs) from February to March, while Victorian Energy Efficiency Certificates (VEECs) are steadily increasing at an average of 3% over the quarterly period Jan-Mar 2020.

Small-scale Technology Certificate (STCs) price updates:

The latest pricing (as at 31 March) for STCs are $39.60, which is a slight increase of 4.2% from the previous month’s end, up from $38.00.  STC pricing rose by $1.75 between 31 January 2020 to 31 March 2020, an increase of 4.6%. STC prices rose an average of 2% over the quarterly period. 

What this means is that that revenue from STCs generated on lighting upgrades and other eligible technologies under the scheme, is slightly higher compared to two-three months ago, and therefore slightly cheaper to install as potential upfront discounts on eligible energy efficiency upgrades have also increased.

Large-scale Generation Certificate (LGCs) price updates:

LGC prices have been particularly volatile and is on a downward trend since January – falling from $42.00 at 31 Jan, to $28.30 by 31 March 2020; over the space of these two months, LGC prices have fallen sharply by $13.70 or 32.6% (January vis-a-vis March). LGC prices have decreased by an average of 18% over the quarterly period.

What this means, is that the revenue from creating LGCs is significantly lower now as compared to two to three months ago, therefore LGC projects are much more expensive as upfront discounts offered by ESCOs is considerably less. 

Victorian Energy Efficiency Certificates (VEECs) price updates:

There has been a small increase of approximately $1.85 in VEEC prices over the last two months – up from $34.15 at 31 Jan, to $36.00 at 31 March – an increase of 5.4% from January compared to March. The average quarterly increase over the period was 3%.

What this means is that that revenue from VEECs generated on lighting upgrades and other eligible technologies under the scheme, is slightly higher compared to two-three months ago, and therefore slightly cheaper to install as potential upfront discounts on eligible energy efficiency upgrades have also increased.

Energy Saving Certificates (ESCs) price update:

The price of ESCs have risen sharply – by an average of 30% – over the quarterly period (Jan- Mar 2020). The ESC (eski) price at Jan 31 was $24.25 and by Mar 31 the spot trade price was $39.75 – an increase of $15.50 representing a 63.9% MoM increase when comparing Jan and Mar. A major portion of the significant price movement occurred mostly March as by the end of February there was a modest gain of 6.5% compared to the previous month.

What this means is that that revenue from ESCs generated on eligible technologies under the scheme, is significantly higher compared to two-three months ago, and therefore considerably cheaper to install as potential upfront discounts (typically offered by ESCOs installing eligible energy efficiency upgrades) have also increased.

Summary of Environmental Certificate Scheme Prices:

Small-scale technology certificates (STC) prices are relatively stable between the $37 – $40 mark, while Large-scale generation certificates have fallen sharply over the last quarter, falling an average of 18% each month in the same period. NSW-based projects will benefit from the sharp increase of 35% in the price of Energy Saving Certificates (ESCs) from February to March, while Victorian Energy Efficiency Certificates (VEECs) are steadily increasing at an average of 3% over the quarterly period Jan-Mar 2020.
 

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