EMS manage environmental certificate obligations in larger electricity contracts

By August 30, 2018Uncategorized

Energy and Management Services assist larger electricity consuming clients to cover obligations for environmental certificates. This arrangement is set up when negotiating the electricity contract and means that instead of a set pass-through fee for certificates, we confirm and independently purchase certificates to cover obligations. This arrangement can greatly reduce electricity costs, as trading can be performed using market rates throughout the year instead of the set price from the retailer (which is often high to cover their time and profit for managing these) for each year of the contract.

The market has been trending down in recent months, mostly due to the uncertainty of the National Electricity Guarantee (NEG) replacing the (RET) potentially in 2020. This widening gap between ceiling price and market price represents large cost savings for most of our clients. The politics surrounding the NEG have created uncertainty which has meant many sellers are not holding onto these and selling them in the short term. This has led to a gradual trend of decreasing pricing since May 2018.

There are also additional certificates in NSW (ESCs) and Victoria (VEECs), that have obligations linked to your consumption. Also if you report to the National Greenhouse and Energy Reporting scheme there are Australian Carbon Credit Units (ACCUs) which entities may be obligated to purchase for surrender under the Safeguard Mechanism.

We also manage exemption certificates for some clients that are eligible from the Clean Energy Regulator (CER) due to Emissions Intensive Trade Exposed (EITE) criteria. These exemption certificates reduce surrender obligations for eligible activities.

Please let us know if you’d like us to estimate the potential savings of managing your certificates for your business, or discuss these arrangements more generally.