Electricity Market Tag

03 Feb LGC prices slide

Yesterday we considered the possibility of large-scale generation certificate (LGCs) prices reducing due to the federal review. Prices have slid $4/certificate this week. In recent news reports, ERM founder, Trevor St Baker said the government would need to adjust the renewable energy target (RET) to 20,000 gigawatt hours to fall in line with infrastructure expectations. "There is no way we are going to make the 33,000 target. It's impossible to get there.” Mr St Baker said. We concur, and have for quite some time.  Fundamentally, in a politically stable environment, we can only see LGC prices trending to and sitting at the full tax adjusted penalty of around $93/LGC. There aren’t enough certificates...

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