Australia: LGC spot price falls in November 2024 to about AUD 27, quarterly average AUD 44.89
According to the Clean Energy Regulator, the LGC spot price fell from AUD 41.50 (30 September 2024) to about AUD 27 in mid-November. The average for the third quarter was AUD 44.89.
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The spot price of LGCs (Large-scale Generation Certificates) in Australia fell sharply at the end of 2024. According to the Clean Energy Regulator (CER), the average for the third quarter of 2024 was AUD 44.89, at the end of September it was AUD 41.50, and on 19 November 2024 only AUD 27.25 (about AUD 27 in mid-November).
Figures from the CER report
| Date | LGC spot price |
|---|---|
| Average, third quarter of 2024 | AUD 44.89 |
| 30 September 2024 | AUD 41.50 |
| 14–19 November 2024 | about AUD 27 (AUD 27.25 on 19 November) |
For comparison, in the third quarter of 2022 the price exceeded AUD 70 in mid-September and fell to AUD 64.25 at the end of the month (see the entry on the 2022 peak). From the peak to November 2024 the price therefore fell by more than half.
Background: from records to a decline
As recently as 2022 the regulator was recording record voluntary surrenders of certificates (4.7 million in the third quarter of 2022 alone) and a steady approval of new capacity (1.2 GW in three quarters of 2022). High demand kept the price above AUD 60. By November 2024 the situation had reversed: the price fell below 40% of its September 2022 level. This shows the scale of fluctuations in the certificate market.
Why this matters for bioenergy
The LGC is the main support instrument for large renewable generation in Australia, and certificate revenue supplements the energy price. A generator using landfill gas, biogas or biomass creates LGCs in the same way as wind or photovoltaics. When the certificate price falls, bioenergy projects lose part of their revenue, while construction and operating costs remain fixed. For new projects this results in a longer payback period.
Changes to the eligible sources
The CER also states that waste coal mine gas has no longer qualified for creating LGCs since 2021. This is an example of the range of sources in the scheme being narrowed by regulatory decisions, and not only by market mechanisms.
How to interpret this
The certificate market is volatile: the price can fall by half within two years. A generator financing a project should therefore not assume a single LGC price, but test several scenarios, from several dozen down to a dozen or so dollars per certificate. In Poland a similar risk applied in the past to the green certificates market.
Sources
Questions and answers
Why is a low LGC price a problem for biogas plants?
An LGC is a premium on top of the energy price. When the certificate price falls, the generator's revenue falls, which makes it harder to finance new projects.
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