This compares to the current target of 9,500 GWh by 2010.
In Australia, RECs are a form of currency that can be earned by installing solar panels, wind turbines and micro-hydro plants. Each REC represents 1 MWh of electricity generated from renewable energy and can be traded once registered.
“We’re just waiting for final regulatory approval but expects to make an announcement shortly,” David Kresvan, ASX’s manager of energy and environmental markets, told Reuters.
ASX will face competition from other companies that are also planning to launch a suite of environmental futures products, including enVex, 25% owned by Climate Exchange plc, which already operates in the over-the-counter (OTC) market in RECs that has existed for a number of years.
“There will be a need for futures contracts but the market probably won’t be big enough for several different ones even though it has significant potential for growth,” said Gary Cox, vice president of commodities and energy at Newedge Australia.
Certificates have been issued under state schemes that will be wrapped into a national scheme from January 1, 2010, when a renewable energy law that mandates 20% of electricity must come from green power by 2020 goes into effect.
The RECs market is set to expand following the setting of the 20/20 target. Renewables produce 5% of Australia’s energy supply at present.
“There’s billions of dollars in new investment required now to actually build the new generation assets that will actually create these certificates,” said Kresvan.
The establishment of a REC futures market was likely to enhance transparency and liquidity in the existing OTC market and would also send a clear futures price signal which would permit companies to better manage their market risks as they adapted to a greener regulatory regime, Kresvan added.
