Regulatory Tweaks Roil Victoria’s Energy Efficiency Certificates Market

November enviro markets update – VEECs and ESCs

Business Spectator, December 10, 2013

Recent months have yielded substantial changes in Victoria’s Energy Efficiency Certificate market, with considerable price movements and a decline in supply coinciding with the previously announced alterations to the Standby Power Controller (SPC) methodology.

Across most of the year the staggering numbers of VEECs derived from the SPC methodology had been contributing to an enormous oversupply and hence responsible for the continuing downward trend in prices. In early September the scheme’s regulator, the Essential Services Commission, announced a reduction in the default value for the methodology that would take effect in early October and bring to an end the viability giveaway business model. It took a number of weeks after that date for the spot price to cease its descent which occurred in the latter part of October after the market had reached the mid $11s.

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