Beware the “bid plateau” at ERF III – The risk of ‘bidding the average price’

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

While on the surface, the first two ERF auctions appeared to be similar – contracting a comparable amount of ACCUs for a similar amount of money – analysis indicates that the second ERF auction was more competitive than its predecessor, with a higher number of projects participating, but a lower number of bidders (one in three) signing contracts.

Notably, small projects disproportionately lost out on contracts at ERF II, with modelling indicating that many participants bid in narrow band – in line with the “average price” announced following the first ERF auction ($13.95). Subsequently, while many proponents sought to “play it safe” and bid the average price of the previous auction, this was ultimately a high risk strategy, which failed to translate into contracts given the highly competitive auction.

With ERF III also expected to also be highly competitive – with around 290 projects currently registered to participate – below, we take a closer look at the dynamic of ‘bidding the average price’ at the next ERF auction, and the potential implications of the new variable volume threshold (the “threshold”) to determine successful auction bids.

Restricted Access

To continue reading this post, register below.

Continue reading this article

To continue reading this free article, simply click “register now” to access our free insights & events.

Access is free, and instant! Sign up below.

Register Now

Sign up to receive our research alerts

Create a free account to access our free insights and event invitations, and receive our research alerts via email. Access is complimentary, and instant. Sign up below:

Sign up for regular insights

LATEST UPDATES

  • Carbon spot price climbs to 10-month high as pressure builds on government

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Australian carbon spot price climbed to $16.63 per tonne on Monday, a 10-month high, […]

    Research Insights | January 19th, 2021
  • Trading range narrows for Australian carbon spot price

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The Australian carbon spot price ended the 2020 calendar year down 4.5 per cent year-on-year, […]

    Research Insights | January 13th, 2021
  • Scenarios for the replacement of the Liddell power station

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    RepuTex has been engaged by Greenpeace Australia Pacific to analyse the impact of scenarios to […]

    Research Insights | November 27th, 2020
  • OUTLOOK: NEM wholesale electricity and LGC price forecast 2020-40

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Dear Subscriber, Our latest Australian Electricity Outlook (AEO) for medium- and long-term price development in […]

    Research Insights | November 26th, 2020
  • INSIGHTS: What is the current Australian carbon spot price?

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Amid a recent surge in carbon neutrality pledges, many businesses are looking to offset the […]

    Research Insights | November 25th, 2020
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone
  • Quick Navigation

  • Electricity

    Learn more about our modelling and price outlooks for the NEM
  • Renewable Energy

    Learn more about our services for wind and solar developers
  • Carbon Market

    Learn more about our Australian carbon price and market analysis
  • Latest Insights

    View our latest articles, white papers, reports and publications