PW 322/09
5 November 2009
COAG TO CONSIDER RENEWABLE ENERGY
CERTIFICATE MARKET
A COAG review into the Federal Government’s Renewable Energy Target will consider
factors that may be impacting upon the Renewable Energy Certificate (REC) market in the
short and long term.
“The review will explicitly examine the current state of the RET spot market and whether the
spot market has any implications for the deployment of large-scale projects such as wind
farms,” Senator Wong said.
Senator Wong said uncertainty regarding the establishment of the Carbon Pollution
Reduction Scheme could be harming market sentiment and impacting on the REC spot price.
The expanded Renewable Energy Target is designed to ensure 20 per cent of Australia's
electricity comes from renewable sources by 2020.
The price of RECs is set by the market, depending on the supply of renewable energy and
demand created through the Renewable Energy Target’s annual targets.
The significantly expanded targets under the RET begin on 1 January 2010, which will boost
demand for RECs and growth in the renewable energy sector.
The target will increase to 12,500 gigawatt-hours in 2010, up from 8,100 gigawatt-hours this
year, strengthening the demand for RECs.
The recent decline in the spot market REC price has prompted concern from some in the
renewable energy industry. Whilst the focus has been on the spot market, most renewable
energy projects enter into long term contracts for the sale of RECs and are therefore less
subject to short term fluctuations in the spot market.
The review will look at both short-term developments in the REC market and the factors that
will determine longer-term pricing.
The review is to report to COAG by the end of the year.
Parliament House, Canberra ACT 2600 Tel 02 6277 7920 Fax 02 6273 7330