In news just in from Senator Penny Wong’s office, an announcement has been made that a Council Of Australian Governments (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.
According to Senator Wong, the review will examine the current state of the RET spot market and whether it has any implications for the deployment of large-scale projects including wind and solar farms.
Senator Wong says that uncertainty regarding the establishment of the Carbon Pollution Reduction Scheme could be harming the REC spot price, which has dropped dramatically since the beginning of this year. This has also cut rebates for consumers wishing to install residential solar power systems.
According to Max Sylvester of national solar power solutions provider Energy Matters, “While the REC value reductions didn’t affect us so much as we hedged against such a thing happening and therefore can offer more generous rebates on home solar power systems, once our hedging arrangements are exhausted we’ll face the same issue as the many providers who didn’t.”
However, the Senator’s office states 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 price of RECs is currently dictated by the market, with price fluctuations depending on the supply of renewable energy and demand created through the Renewable Energy Target’s annual targets. Some in the renewable energy industry have said the number of RECs being generated as a result of incentives programs such as the solar hot water rebate are negatively impacting on REC prices.
