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Price changes to Environmental Certificates (Jan – April 2020)

Prices of Environmental Certificates fluctuate on a daily basis, much like shares on the stock market. But in order to truly appreciate something you need to look at the bigger picture – price movements over a longer period of time.

In this post we look at spot trade prices for each type of environmental certificate from January through April 2020. For simplicity and comparison purposes, prices are captured at the end of each month and analysed.

Spot Trade Price Movements for VEECs, ESCs, STCs and LGCs – Jan – Apr 2020

The environmental certificate scheme prices below are for comparison purposes.

There is a general softening of prices across the board, as STCs, VEECs and ESCs all falling in value from March through April. The only exception is Large-Scale Generation Certificates (LGCs) which rose by almost 10% Month-on-Month, from $28.30 to $31.00, however still a far cry off the $42 recorded in January.

Price Changes for Environmental Certificates-  Spot Trade Prices Jan - Apr 2020

Environmental Saving Certificates (ESCs) were the most significant of all prices changes to environmental certificates since the closing of the March quarter, where we see a significant fall in the value of ESCs down from its peak of $39.75 as at end of March, to $28.90 at the end of April. This is now back line with the sub $30 pricing levels across January and February. This wild swing may be due to a softening in demand resulting from the impact of COVID-19.

Victorian Energy Efficiency Certificates (VEECs) fell slightly from March to April but with narrow swings within the $34 – $36 range across January through April.

Small Technology Certificates (STC) Market prices changed a little and dealt with a narrow range closing at $39.10 with a turnover of 147,000 STCs.

The below chart illustrates the price changes in environmental certificates

Chart: Price Changes of Environmental Certificates VEECs, STCs, LGCs, ESCs

Environmental certificates bring money to the table for lots of businesses in the renewable energy and the energy efficiency sectors given the change since the March quarter LGCs have slightly increased now as compared to two to three months ago, therefore LGC projects are somewhat more expensive to install as potential upfront discounts (typically offered by ESCOs that claim these certificates) have also decreased quite significantly.

Environmental Certificate Pricing Jan-Mar 2020

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