RET accreditations in Australia to hit 4 GW in 2019
Willogoleche wind farm in South Australia. Image by Engie (www.engie.com.au)
Power plants in Australia with a combined capacity of some 4 GW will secure accreditation under the country’s Renewable Energy Target (RET) this year, breaking the 2018 record of 3.5 GW.
This is according to an overview by the Clean Energy Regulator (CER) last week, which confirms that the RET capacity added since 2016 reached 7.3 GW at the end of September. This is more than enough to meet the 2020 RET. There are also 4.3 GW of renewable power projects fully financed and under construction, and 1.6 GW whose realisation is subject to power purchase agreements (PPAs).
According to official data, only 19% of projects tracked by CER since 2016 have been underpinned by Australia’s three largest electricity retailers -- AGL, Energy Australia and Origin. The regulator said recent additions to the pipeline have been driven by smaller market players and corporate PPAs.
Utility-scale investment has moderated, but Australia is experiencing growth in the mid-scale solar segment as the economics of behind-the-meter solar remain strong, CER noted. This year, capacity additions from systems of 100 kW to 5 MW under the large-scale renewable energy target (LRET) are expected to reach 200 MW, up from 113 MW in 2018.
When a power plant gets RET accreditation in Australia, it starts receiving large-scale generation certificates (LGCs) for the electricity it produces. "Liable entities" have to buy these certificates, generating extra revenues for renewable power generators. The spot price of the LGCs has been on the slide for quite some time. It fell from roughly AUD 85 (USD 59/EUR 53) in January 2018 to AUD 47.50 in December 2018, and then to a low of AUD 31 in March 2019. In June and July it jumped to AUD 48 and it mid-October it stood at AUD 44.
CER says the LGC forward prices for 2020 and 2021 are at AUD 34.75 and AUD 15.60, respectively.
The table below shows the regulator’s expectations for LGC supply and demand in the 2019 assessment year.
LGC balance February 14, 2019
Expected LGC supply (available for 2019 surrender)
ACT government scheme
Shortfall charge refunds
Total balance (before any shortfall options taken)