Market Update | 23 February

• The 2024 Renewable Power Percentage (RPP) and Small-scale Technology Percentage (STP) have been set
• Update on Telemarketing Ban in the VEU Program
• El-Nino weather in Australia

The 2024 Renewable Power Percentage and Small- scale Technology percentage have been set

On Tuesday (20/02/24), the Renewable Power Percentage (RPP) and Small-scale Technology Percentage (STP) were set to 18.48% and 21.26% respectively.

With the RPP set to be 18.48% in 2024, this results in liable parties being required to surrender 33.0 million large-scale generation certificates (LGCs) to meet their Large-scale Renewable Energy Target (LRET) for the year, parallel with the target set last calendar year. The target of 33.0 million LGCs will remain constant until 2030, however, the percentage will fluctuate year on year due to changes in grid load.

This year’s STP set at 21.26%, requiring liable entities to surrender approximately 37.9 million small-scale technology certificates to fulfill their obligations. This is an increase from the previous year’s requirement of 36.4 million STCs, due to the higher target percentage of 21.26% compared to 20.5% in 2023.

With the status of the clearing house being in surplus of 500,000 certificates, market participants are anticipating the increased target may generate enough demand to reduce this surplus, bringing the clearing house back into a deficit and placing upward pressure on the STC Price throughout the year.

Update on Telemarketing Ban in the VEU program

Last year, the Minister for Energy Resources announced an intention to ban telemarketing and other high-risk forms of unsolicited marketing under the VEU program.

On Monday 19th of February 2024, the second round was opened consumers and industry stakeholders are encouraged to provide feedback on the proposed ban and policy options. Below are the options to be implemented:

• Banning only telemarketing starting May 1st, 2024.
• Banning both telemarketing and door-to-door sales starting May 1st, 2024.
• Banning telemarketing in May and door-to-door sales in August of 2024.

Other marketing channels such as online and traditional advertising would still be allowed under the proposed methods. The VEU has provided commentary that their preferred option is Option 3, however, feedback will still be considered from scheme participants.

El Niño weather in Australia

Australia might be bracing for warmer and drier times as the Bureau of Meteorology predicts a 70% chance of an El Niño developing in 2024. This phenomenon typically lasts for 9-12 months, bringing average temperature increases of 0.5-1°C above normal, particularly in southeastern regions. While the specific impacts can vary across states, conditions such as lower rainfall, higher bushfire risk, and potentially hotter summers may ensue – potentially resulting in a higher electricity demand.

Clearer skies could boost solar power generation, especially during peak summer demand. Dust storms and extreme weather pose challenges, though advancements in technology are making panels more resilient. Strategic responses like energy storage investments and grid modernisation offer opportunities to mitigate risks and strengthen the renewable sectors’ resilience.