Come the LREC surrender deadline this Wednesday, things are getting tight for power companies to purchase and surrender enough LGCs from the market to meet their liability. Historically, Liable Entities (LE) have had excellent compliance rates, but when the price of LGCs soared last year, ERM and some other LEs opted to pay the shorftfall penalty price rather than surrender LGCs. They were taken to task by the Clean Energy Regulator, and appear to have re-engaged with the market.

This year, there is still plenty sufficient LGCs available on the market to meet this year's liability - 32.7million are available, and 25.2million need to be surrendered. The problem facing many LEs is that, whereas in previous years LGCs were easy to find as there was a sizeable oversupply, this year some LEs are holding far more than what they need, meaning there are others who must scramble to find LGCs from the market.

There is only three more days for the LEs who don't currently hold enough LGCs to meet their liability - so they need to quickly discover who is holding excess LGCs, and line up a trade - otherwise they'll be paying a fine and could suffer reputational damage. But its difficult to know who is holding excess LGCs, as there isn't a publicly-accessible source of information on who is holding LGCs, how many they're holding, and how much they have to surrender.

Fortunately, SunWiz has been analysing the REC Registry for 7 years now, and has built up a rich database of information on current holdings, recent years' surrender volumes, projected 2018 surrender volumes, and trading partners for each Liable Entity. From our RETelligence, we can identify who is holding enough LGCs, and who isn't. 

Here's some insights we can pull from the data. Note that all of these statements are based off last year's surrender volumes, adjusted for the increase in the RET target.
  1. As a group, the LEs hold sufficient LGCs to meet their collective liability, holding 29M as seen in the chart below
  2. However, individual LEs appear to hold up to 1M LGCs than their need (e.g. Snowy Hydro).
  3. Pacific Hydro is holding three times the volume they need for their own requirements. Water Corp is in a similar position, as is Power & Water Corp
  4. Other individual LEs are very short, holding up to 500k LGCs less than their Liability with three days left to trade.
  5. Two of the big three retailers appear to have met their individual liability. The third appears to be 17% short (540k LGCs). 
  6. There are 9 LEs who need to secure 100k or more LGCs in the next three days
Current Holdings by Classification of Owner: LE's hold 29M at present
Let's take a look at ERM, as an example.
  1. ERM is holding 3.2M LGCs at the time of writing. 
  2. Two years ago they surrendered 1.9M LGCs.
  3. Since then the target has grown from 18.55M LGCs to 26.03M LGCs
  4. Assuming their market share of electricity sales hasn't changed in the meanwhile, their liability this year would be 2.67M LGCs
  5. Therefore they are holding sufficient LGCs to meet their liability.
We can therefore conclude that ERM has met its RET obligation this year.
Most of ERM's purchasing activity happened in January 2018. 
Most of the LGCs ERM bought in 2018 came from EDL, ANZ, Meridian, EA, and Macquarie Bank
But there's plenty of people who need to get their act together.
  1. One of the big three, who appear to be 540k behind (17% of their liability)
  2. Over 16 LEs that still require over 90% of their Liability to be purchased in the next three days.
A small extract of who's holding more or less than what they need, and this information as a percentage.
If you are a Liable Entity that needs assistance in finding a trading partner in order to meet your LGC liability, please contact SunWiz.
In 2017, Hydro made up 16% of LGC creation, wind was 64%, and Solar was 4%
SunWiz's RETelligence service provides transparency into the REC Registry. Click here for more information 

Recently released investigation shows Phono Solar and Kyocera Solar top list of highly-accelerated lifetime tests.

Millions of low-quality solar panels have been installed on Australian roofs in the past decade. This unfortunately occurred because our solar market was primarily comprised of residential installations, and because mums and dads lack the expertise to differentiate panel quality.

Therefore a great deal of responsibility for selling good quality product falls onto the heads of PV retailers. And any PV retailer interested in remaining profitable for more than six months has some self-interest in choosing a good quality panel manufacturer, as:

Read more: How long will your solar panels last? And how well will they perform until then?

Part of our series “What is the best strategy to maximise the Return on Investment for your battery?”

In other articles we’ve examined the best strategies for maximising Return on Investment in your battery. We’ve seen:

  • You can’t make enough money from a battery alone to justify its cost – you need to couple it with a PV system which does most of the heavy lifting in terms of ROI.
  • Smaller is better when it comes to ROI – as the battery acts to drag down the ROI of a PV system, so a smaller battery drags down the ROI less
  • In order to maximise your ROI its best to discharge during Peak and Shoulder periods, though of course the answer also depends on the price of peak and shoulder electricity in your area.
  • Discharging your battery during off-peak periods to ensure it is 100% available to soak up excess solar energy sounds like a good idea on face value (better to sell at 13c/kWh than earning only 6c/kWh for your excess solar), but you’re probably prematurely aging your batteries for almost negligible extra revenue.

We’ve seen that arbitrage can generate a reasonable amount of revenue on its own, but not enough to justify the batteries in the absence of PV. But what about doubling the batteries’ utilisation by pre-charging from off-peak electricity to cover early morning loads then re-charging from the sun to cover evening loads?  Couldn’t sneaking in an extra cycle in the morning act to increase my revenue and accelerate my payback?

Read more: Is it worth charging from the grid (off-peak), to try to sneak in a second cycle?

Part of our series “What is the best strategy to maximise the Return on Investment for your battery?”

In which we also answer the question “Should I Discharge during peak only, or peak and shoulder“ and “Is it worth discharging during off-peak periods in order to maximise solar soak-up?”

Now if you’ve taken the early adopter step of adding battery storage to your PV system, you might be wondering how to make the most of your battery in minimising your electricity bill. In other articles we’ve examined the best strategies for maximising Return on Investment in your battery. We’ve seen:

  • You can’t make enough money from a battery alone to justify its cost – you need to couple it with a PV system which does most of the heavy lifting in terms of ROI.
  • Smaller is better when it comes to ROI – as the battery acts to drag down the ROI of a PV system, so a smaller battery drags down the ROI less

One common idea put forward as a way of improving battery ROI is to double the amount of work the battery does each day, by pre-charging it from off-peak grid power to service your morning loads, before charging it again (this time from excess solar energy) so it can service your evening loads. By working it twice as hard, the theory is you will generate extra revenue (in the form of bill reduction) each year, so the battery should pay for itself sooner. But how does the theory stack up in reality? Let’s use PVsell to find out.

Read more: When should I discharge my battery to maximise my return on investment?

Is it worthwhile charging a battery from the grid at off-grid prices?

Part of our series “What is the best strategy to maximise the Return on Investment for your battery?”

In this article we demonstrate that batteries can’t pay for themselves without being coupled with solar power.

Have we discovered a perpetual profit machine hidden within the electricity network? Those greedy electricity retailers charge a fortune for power during peak periods (right when you’re using most energy), and much less during off-peak periods (when you’re asleep). What if you could charge a battery overnight from cheap off-peak electricity, and use the battery to supply your needs during expensive peak periods? Making money during your sleep, night after night, Genius! Right?

Read more: What is the best strategy to maximise the Return on Investment for your battery?

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