As one reader queried, has the sun put up its price? Who's responsible for the increasing price of green energy? Credit:Jacklyn Wagner Green energy prices are determined by electricity retailers. The prices have risen because the spot price of large-scale generation certificates, which underpin the GreenPower scheme, has also risen. Large-scale generation certificates are used by Renewable Energy Target-liable entities to meet compliance obligations based on the volume of electricity they purchase each year. The certificates are also used by electricity retailers for the GreenPower scheme.

But others say there is more to it than that, and point to retailers "sitting on their hands". "Retailers are making it more expensive than it needs to be for the consumer," said Richie Farrell, group manager of investor relations and strategy at Infigen Energy. "The consumer is entering into a contract with them to buy renewable energy and they are not taking action to enter into a contract with renewable energy providers to supply the electricity, they are just entering into short-term agreements on the spot market to meet the liability the customer has imposed on them through purchasing their product." Mr Farrell said it all comes down to supply and demand. "For a long time the renewable energy certificate market was oversupplied. Everyone knew there was going to be an upcoming shortfall and to avoid that shortfall retailers were required to enter into long-term contracts with people like ourselves to ensure that more renewable supply came into the market."

Unfortunately for consumers, he said, retailers have so far refused to do that. "They have sat on their hands and not entered into these new contracts. Basically, by our projections, by 2017-18 we will have more demand than supply for renewable energy, and as such prices increase in that scenario." A Clean Energy Regulator spokeswoman agreed that the increase was linked to fewer renewable energy projects and the price increase for large-scale generation certificates, which finished 2015 with an end-of-year spot price of $75. "Fewer renewable energy projects currently being financed, compared with past years under the Renewable Energy Target, have contributed to the price increase," she said.



"New projects are needed to ensure there is adequate future supply of large-scale generation certificates so that demand, legislated through the Renewable Energy Target, can be met." Andrew Stock, a councillor on the Climate Council, said there should be no surprises about the current lack of new renewable projects.

"Around 12 months ago, when Ian Macfarlane was industry minister, some of the major CEOs were basically foreshadowing that they would drive the price up by not contracting and pass that cost on to their consumers," Mr Stock said.



"They haven't contracted for any new capacity; they have been sitting on their hands. They will need to contract if they don't want to break the system completely." Mr Farrell said the most important thing for consumers to do was to "shop around". "I think it will get to the point where the consumer backlash will start to [have an] impact on the electricity retailers and people will begin to shop around and find a smaller retailer willing to enter into these contracts," he said, adding that this would "get larger retailers to take action and enter into contracts to generate new energy supply".