REC Prices Increase

08 Nov 2009

If anyone is in any doubt over the volatility of the REC market, they need only to have been around to see prices hike up towards the end of last week. We stick by our previous comments that supply and demand are the fundamental drivers in this commodity market, but when Climate Change Minister Penny Wong announced last Thursday that CoAG would review the REC Market (particularly the impact the drop in the prices is having on new renewable power projects), buyers responded immediately. The Government is currently reviewing the eligibility of heat pumps (amongst other matters), but this latest announcement played to market sentiment with the clear market expectation that the Government will make some changes that will address the REC oversupply in the short to medium term. CoAG is due to meet on 7 December and you can read what Minister Wong said here: http://www.climatechange.gov.au/en/minister/wong/2009/media-releases/November/mr20091105.aspx.