Carbon & Environmental Certificates

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A broad range of environmental and carbon trading obligations exist in the Australasian marketplace, all of which require specific financial and prudential management by participants in the sector.

 

Mandatory Renewable Energy Target (MRET) – Established in 2001, the MRET is a government requirement upon electricity retailers to obtain a specific proportion of their electricity sales from renewable energy sources. In Australia, this target is 20% (or 9,500 GWh) of new generation to be achieved by 2020. These obligations upon energy retailers are managed via the creation and surrender of Renewable Energy Certificates (RECs). In 2011, modifications (now under review) to the scheme introduced the LRET and the SRES.

 

Clean Energy Bill – In 2012 the Australian Federal government introduced a carbon price of A$23 per tonne of emitted CO2-e, on selected fossil fuels consumed by major industrial emitters and government bodies. Whilst this scheme is scheduled for review in 2014, the market has seen considerable change in response to the carbon price, including the introduction of “Carbon Passthrough” clauses attached to energy hedging contracts. These contracts, often with multi-year tenors, will require capture, valuation and settlement for an extended period beyond the advent of new schemes.

 

National Greenhouse and Energy Reporting Scheme (NGERS) – Introduced in 2007, the scheme obliges major industrial corporations and emitters to record and submit data on greenhouse gas emissions and energy consumption and production. Businesses emitting more than 25,000 tonnes of carbon dioxide equivalent, or consuming more than 25,000 megawatt hours of electricity or 2.5 million litres of fuel in a financial year, can expect to be required to report. (read more: http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx)

 

New Zealand Emissions Trading Scheme (NZ ETS) is a partial-coverage, uncapped, internationally linked emissions trading scheme, established in 2008. The scheme created the New Zealand Unit (NZU) for the purposes of emissions trading and obligation management. As of 2012 there were 286 mandatory NZETS participants and 2,264 voluntary participants.

 

GreenPower – Is a voluntary Australian industry program that enables energy providers to purchase renewable energy on behalf of customers who elect to participate. As of 2013, 725,000 households participate in the scheme, which is administered via the production and surrender of Greenpower LGC certificates. http://www.greenpower.gov.au/About-Us/Why-GreenPower/

 

Other Schemes – Various schemes such as:

  • European Emission Trading Scheme
  • NSW Greenhouse Gas Reduction Scheme
  • Qld Gas Electricity Certificate Scheme
  • Victorian Energy Efficiency Scheme
  • Kyoto Emission Reduction Units

Are all schemes that have a current, future or legacy impact on businesses with obligations under them or potential to trade within them. All these schemes require the trading, valuation and inventory management of certificates in exchange traded or informal price discovery markets.

 

Product solutions offered for Carbon & Environmental markets
EnergyOne Trading offers out-of-the-box functionality for all green, environmental and carbon obligations, including:

  • Full inventory management functionality
  • Management for all certificates available in the market today (e.g STC, LGCs, EUAs, NZUs,etc)
  • Certificate position reporting
  • Full deal capture, valuation and settlements functionality
  • Capability to trade foreign market certificates (i.e ETS-ready)
  • Reporting and analytics functionality
  • Full integration (using EnergyFlow module) with the REC registry interface, providing:
    • Greatly reduced workloads in certificate management
    • Greater compliance and reduced risk
    • Ensured reconciliation between inventory and registry, and
    • Advanced green position reporting, including integration with demand and load systems for dynamic position reporting

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