• Emissions across the Australian NEM have fallen to record lows off the back of a 10 year low in coal generation
• Increased rate of build for new renewable generation is forecast to outstrip the pace of electricity demand growth through to 2020.
• Non Stationary Energy emissions are forecast to rise through to 2020 on the back of considerable growth in LNG Processing assets.

NEM C02 Emissions Fall to 10 Year Low

Greenhouse gas emissions across Australia’s National Electricity Market (NEM) have fallen to a ten year low due to increased competition in the generation sector, as thin demand and increased supply of renewables squeezes out coal generation.

Coal generation is at its lowest level in 10 years, contributing 74.8% of all generation, down 11% from 85.8% in 2008-09. Renewables output has increased steadily, with wind and hydro generation reaching 12.5% across the NEM.

Gas generation (12.7%), Hydro (8.7%), and Wind (3.8%) are all at record high generation levels, with the full commissioning of Macarthur’s 420MW of wind capacity in Q3 forecast to further increase wind generation going forward.

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RepuTex’s Market Intelligence service assists customers to gain a detailed understanding of the Australian carbon market, and the flow on implications for local power, gas and clean energy market shape.

With over 150 subscribing customers locally, our analytics have become a key reference point for Australian carbon, power and energy market professionals who rely on our independent outlooks and forecasts to support a range of internal decision making and external communications.

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This webinar, as delivered March 6, 2013 examines the outlook for the Australian energy sector, accounting for recent changes to RepuTex’s carbon price outlook. We examine the question of whether gas or renewables are actually better positioned to gain share at coal’s expense and look at the diverging fortunes of brown versus black coal.

AGENDA
1.INTRODUCTION
2.REVIEW OF FY13 GENERATION AND EMISSIONS
3.BASE CASE: INTRODUCTION AND ASSUMPTIONS
4.BASE CASE: ELECTRICITY AND EMISSIONS OUTLOOK FY12-20
5.SCENARIO 1: IMPACT OF CPM REPEAL ON GENERATION MIX FY12-20

CLICK HERE to download the public webinar slides FREE

RepuTex has modelled a series of carbon price scenarios analysing proposed short and long term market reform in the EU ETS and the implications for Australian carbon prices through to 2020. In this webinar we explore those scenarios and provide our outlook for the Australian carbon market.

AGENDA
1.THE EU ETS AND CARBON PRICE DRIVERS
2.CURRENT STATE OF PLAY
3.PROPSED BACKLOADING REFORM AND PHASE III OVERVIEW
4.REPUTEX SHORT TERM EUA PRICE SCENARIOS
5.REPUTEX LONG TERM EUA PRICE SCENARIOS
6.REPUTEX AUSTRALIAN CARBON PRICE SCENARIOS

CLICK HERE to download the webinar slides FREE

- an article by RepuTex’s Paul Bourke.

Read the complete article HERE

INSIGHTS ARTICLE – DECEMBER 2012

The complete article is available to subscribers of our carbon research services, which start from as little as $98 per month.

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Read the complete article HERE

EU officials met on Wednesday to discuss preliminary proposals to remove excess permits from the European Union Emissions Trading Scheme (EU ETS), a move which would restore EU carbon prices to higher levels. However debate continues regarding the impact of the EU market’s proposed reforms, particularly how long the impact of that reform will last, and what that reform will mean for Australian companies.

The EU carbon market is currently oversupplied by an estimated 1.2 billion cumulative permits through to 2020, with proposals to ‘backload’ either 1.2 billion, 900 million or 400 million permits from Phase 3 of the EU ETS, which commences in 2013.

According to RepuTex, backloading may lead to EUA prices recovering to €19/EUA in 2015. However, whether the price recovery is short-lived or not will depend on whether permits are permanently removed, or re-introduced at the end of Phase 3.

“The European backloading measure may see prices recover to the €19 range, however backloading does not mean permits are permanently cancelled, so should permits be re-introduced into the EU ETS, we may ultimately see downward pressure on EUA prices towards 2018”, said RepuTex Executive Director, Hugh Grossman.

“What scenario the EU Commission agrees to will be pivotal to EUA prices. If permits are cancelled permanently, we may see upward pressure on prices beyond €19, leading to higher abatement costs for companies in Australia, and potentially greater demand for domestic offsets under the Carbon Faming Initiative, which would be better positioned economically”, said Mr Grossman.

The European Commission aims to reach a position towards the end of 2012, however there is some uncertainty around the timetable for the back-loading.

The Commission will conclude its consultation with stakeholders by November 2012, with representatives of the EU Member States to discuss the proposal, negotiate further changes, and vote towards the end of the year. The proposal will then move to the Council of Ministers and to the European Parliament itself.

According to RepuTex, the timing and size of the set-aside will be crucial in determining carbon costs in Australia.

“The larger and more permanent any European set-aside, the greater the impact of the EU price on Australian companies and local offset markets’, said Mr Grossman.

“Combined with domestic policy scenarios regarding the Australian Government’s contracts for closure of brown coal generators, and further domestic linkages with schemes in New Zealand and South Korea, Australian carbon prices are set for an interesting ride.”

The study will examine EU backloading scenarios, and domestic policy such as contracts for closure and impact of future linkages with regional carbon markets (eg New Zealand, South Korea). The study will also focus on domestic and international offset prices, along with abatement cost curves across the market.

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Read the complete article HERE

Read the complete article HERE

Power, Coal and Energy sectors forecast to be key winners

MELBOURNE – September 4, 2012 – A new report from carbon analytics firm, RepuTex, indicates that last week’s announcement of plans to link Australian and European carbon pricing schemes is set to save liable Australian companies $2.5bn over 5 years.

According to RepuTex, European and international carbon units are forecast to trade through FY 2016-2020 at an average of A$11.50 per tonne – well down on the A$15 floor price. This lower carbon price will lead to notable savings for Australian companies.

“We forecast an average saving to firms of around 16%, or $2.5bn between 2015 and 2020, relative to the previous floor price scenario,” said RepuTex Associate Director of Research, Paul Bourke.

“Depending on policy measures taken in the EU, we anticipate Australian companies to take advantage of a more credible price trajectory than under the previous floor price.

“We expect European and international carbon units to trade between A$17 and A$7 over FY 2016-2020, with Australian buyers using cheap international permits to meet around 22 per cent of their total liability over this period, before switching to European permits towards the latter part of the decade,” said Mr Bourke.

RepuTex research shows power generators will gain the most from the EU link, with the sector set to register a net gain of up to $1.5bn over 5 years. Coal miners can expect a windfall of up to $560m over the same period, and non-coal energy producers up to $230m.

Carbon price movements in Australia – and company liabilities – are expected to be strongly correlated with the outcome of carbon market policy decisions made in Europe. The EU, faced with sluggish economic growth across its member countries, is presently producing at a level significantly below its emissions cap, leading to an over-supply of EUAs equating to over 700 million tonnes of carbon, which has kept EUA prices subdued.

The EU has proposed setting aside – either temporarily or permanently, a number of EUAs with a view to allowing the price to recover over the short term. The size and nature of this set-aside are yet to be confirmed.

According to RepuTex, the timing and size of the set-aside will be crucial in determining the savings to Australian firms, as will the timing of the return of those permits (if at all) to the market.

“The larger and more permanent any European set-aside, the greater the compound impact of the new demand from Australia will be on EUA prices post-2015, once the schemes become linked,” said Mr Bourke.

“We anticipate that permits set-aside in the short term will be re-introduced to the EU market in 2018, but if this is pushed back to 2020 we should see stronger overall carbon prices and higher liabilities for Australian liable companies compared to the floor price scenario.”

“If enough of a deficit is restored in Phase 3, we may also see Australian demand for EUAs support prices in Europe from FY 2016,” he said.

RepuTex forecasts greenhouse gas emissions from Australia’s liable entities out to 2020, applying this data to forecast carbon market fundamentals and pricing in the Australian and European markets over the same period.

On the question of whether it was in Australian firms’ interest to look at buying up EUAs now, while the price remains near record lows, Mr Bourke noted, “The current EUA price curve does not suggest there is an imminent need for Australian compliance buyers to lock in EUAs, however policy measures to address the EU ETS oversupply are expected to shift expectations towards higher EUA prices in Phase 3, but it is not clear by how much or if they will be effective.”

Copies of the report “Linking Australia’s ETS from 2015 with EU ETS: Scenarios for Abatement” are available to media upon request

Paul Bourke is available for interview.

Media Enquiries
Adam Ford, Associate Director – Marketing
RepuTex Australia
Ph. (03) 9654 7099 | mob. 0425 320 533
Adam.ford@reputex.com

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