Extract from an article by Marco Stella
For those with insufficient patience, the wait across September for the release of the anticipated changes to the commercial lighting methodology was tough. For prices in the VEEC market, the month was overwhelmingly positive.
Having opened in the mid $14s, the spot VEEC market was generally stable across the first half of September, only surpassing the $15 mark for the first time mid month. The second half of September, however, was a far more bullish affair, with the spot rallying through the $19 mark to levels not seen since May 2016 as speculation was eventually replaced with the release of a firm proposal for changes to Schedule 34.
The proposal was generally in line with much of the speculation that had preceded it, with a discount factor of either 20 or 30% to be ultimately applied depending on the type of lighting upgrade being undertaken. There were a couple of differences however.
In attempting to balance the need for prompt changes that would bring down the persistently strong rates of VEEC creation against the risk of creating upheaval amongst businesses operating under the scheme by changing the goal posts too quickly, the proposal outlines a 2 stage transition process in which T5 and T8 replacements will see a discount factor of 10% introduced for activities undertaken from 1 Jan 18, moving to 20% on 1 Apr 18.
For metal halides, mercury vapour and high pressure sodium replacements the discount factor is greater, at 15% from 1 Jan 18 and 30% from 1 Apr 18.
There had been plenty of speculation that the discount factors were going to have applied uniformly to all lighting types under schedule 34, yet this was not what ultimately eventuated. Stakeholders now have until 1 Nov 17 to respond to the proposal…(continues)
SOURCE: Marco Stella, “Energy Efficiency Market Report: Slow transition for lighting credits”, ReNew Economy, 5 October 2017
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