LGC prices have continued to soften into early 2026, with spot markets and forward pricing reaching record lows below $3/MWh. The forward curve therefore reflects the clear view that renewable capacity growth will continue to outpace demand through to scheme expiry, leaving the market structurally long.
As we highlight in our new Renewable Energy Market Outlook (REMO), published today, under our Current Pathway, this view largely holds. Renewable capacity additions have been steady, albeit volatile, in recent years, averaging around 3 GW per annum, with delivery constrained by grid connection, transmission and approvals. While these bottlenecks have delayed some LGC issuance, the broader trajectory points to an acceleration in build-out toward the end of the decade.
As a result, the market remains structurally long, with our modelling indicating further downside in forecast LGC prices under the Current Pathway.
However, this base case increasingly appears to be only part of the story.
As we discuss in our latest REMO, the Australian renewable energy certificate (REC) market is beginning to transition from a compliance-driven framework under the LRET toward a more procurement-led structure under the new Renewable Energy Guarantee of Origin (REGO) scheme. This will see increasing reliance on corporate voluntary demand, as
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