Market Update | 6 December

• VEEC targets see reduction proposal in consultation draft
• Default electricity price in VIC seeks feedback
• AEMO demanding response to summer peak

Have Your Say on the Future of Victorian Energy Upgrades.

The Department of Energy, Environment and Climate Action (DEECA) is seeking feedback on proposed program targets for the Victorian Energy Upgrades (VEU) program for 2026 and 2027.

Out of the three options proposed, the preferred option from the VEU is Option 2 which would see a decrease from 7 million VEECs in 2025 to 5 million in 2026 and then 6 million in 2027. Given that the total VEECs created this compliance year to date is marginally below 4 million, the revised target would lend to reduce the risk of large shortfalls however may concurrently result in a softer average VEEC price with the market supply and demand more balanced.

The ESC Seeks Feedback on 2025–26 Victorian Default Electricity Price.

The Essential Services Commission (ESC) is inviting feedback on its approach to setting the Victorian Default Offer (VDO) for 2025–26. Currently, the VDO applies to about 13% of households and 20% of small businesses, with a draft decision for the 2025–26 pricing expected in March 2025 and a final decision by May 2025.

Big Batteries Lead the Charge for a Reliable Summer Grid.

The Australian Energy Market Operator (AEMO) reports that over 3 gigawatts of new solar, wind, and battery storage capacity have been added to the National Electricity Market (NEM) since September 2023, with an additional 750 megawatts expected to become fully operational by December. This 60% increase in available storage is anticipated to play a crucial role in maintaining electricity reliability during the upcoming summer, which is forecasted to experience conditions similar to the previous year. Last week AEMO called on two batteries in NSW – including the newly connected but not yet fully commissioned Waratah Super Battery – to stand ready with a certain level of charge in case they were needed.

The Waratah battery – at 850 MW and 1680 MWh – will be the biggest unit in terms of capacity ever connected to the Australian grid, including coal, gas and hydro plants.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.

Angus Taylor | Business Development Manager, Energy & Carbon Services
Angus specialises in ESS activities including Heat Pumps, Air Conditioning, and Commercial Lighting.