ICAP Green Day
ICAP GREEN SET - November 25th, 2011
"ICAP Green Set" off the blocks....
ICAP Green Set as at 10.15am, 25th November, 2011
Spot STCs $ 30.65
Spot LRECs $ 41.90
AS part of our Environmental Markets service ICAP Australia will provide a Daily Reference Price (DRP) initially for Spot settled Large Scale Renewable Energy Certificates (LRECs) and Small Scale Technology Certificates (STCs) via ICAP Green Set.
ICAP Green Set is a robust process designed specifically to provide a daily reference prices based on live ICAP transactions and market prices posted between 10.10am and 10.15am each business day.
The daily price will be referenced to minimum market parcels of 5,000 certificates for T+3 settlement. (See Protocol Function 1)
The Daily Reference Price will be published as soon as possible after 10.15am @ http://www.icapenergy.com.au/blog
ICAP Green Set will focus market attention to a discrete trading window for execution and price making that will provide:-
- An opportunity to execute transactions with the attention of the market drawn to the ICAP Green Set process.
- A reliable, market based reference price initially for spot LRECs & STCs that may be used as an index price for daily trades or the settlement of financial swap transactions.
The ICAP Green Set daily reference price will be established in accordance with the following protocols:-
Protocol Function 1 - Actual trades executed during the reference period, then
ICAP GREEN DAY - regular commentary and price updates on Environmental markets.
On Tuesday November 8th, 2011 the Carbon legislation was passed by the Senate.
So what now....?
As we know, this Carbon impost comes in two stages:-
1. A fixed price (Tax) to commence July 1st 2012 then transitioning to,
2. An Emissions Trading Scheme (ETS) to commence July 1st, 2015.
Anything may happen with the ETS in the next three years. Its form, operation and success will be influenced by the outcome of the “Conference of the Parties” (COP 17) in Durban, South Africa later this month, other global carbon initiatives and the state of domestic politics closer to 2015.
The legislative frame work for our carbon initiative is now in place and it all starts mid next year so it’s time to put together a “To Do” list addressing at least the fixed charge (first three years) obligations. The Clean Energy Bill 2011 is a good place to start but remember, much of the detail will be in the regulations and these have still to be released. But anyway here we go.....
Determine your liability
Liability will be based on the “Emissions Number” which liable entities must include in their report to the Regulator in accordance with new section 22A of the NGER Act (see Schedule 1, Part 2, item 367 of the Consequential Amendments bill). Failure to meet obligations will incur a fine equal to 130% of the fixed charge.
Determine how to meet your liability
1) The central element of the mechanism is the ability of liable entities to make...
ICAP GREEN DAY provides regular commentary and price updates on Environmental markets.
Australian Renewable and Carbon markets continue to develop in a somewhat uncertain environment.
Tony Abbott’s “blood oath” to repeal the Clean Energy Future bills with no compensation has got markets on edge. In reality, this will be much harder to achieve given the proposed “personal property” status of credits, implications for individual tax payers and the political vagaries that surround the timing of the next election or double dissolution.
State politics offers little clarity with the Victorian Government seeming to soften its stance on carbon emissions by announcing a review of the state’s Climate Change Act and a “sort your life out” by early 2012 to wind farm developers in that state. Transitional arrangements for New South Wales Greenhouse Gas Certificates and Queensland 15% Gas Electricity Certificates are far from clear while energy efficiency schemes (ESSs and VEECs) continue to provide plenty of compliance and administrative entertainment.
By now participants are starting to feel a bit “carbon fatigued” as the process of establishing a price mechanism has gone on for more than ten years, but all is not lost.
The Carbon Tax legislation is due for a vote in the Senate November 8th just in time for a Prime Ministerial address at the Carbon Expo the following morning, (exquisite timing barring any last minute political embarrassment).
We even appear to have by-partisan approval for the creation of the Australian Renewable Energy Agency...