Australian banks are involved in trading Large-scale Generation Certificates (LGC’s) sourced from renewable generators such as wind and solar farms, biowaste and other sources. They are actively involved in trading LGC’s usually for the following reasons:
- Speculation – for those with an active trading desk
- Surrender – purchased with the intent of Voluntary surrender to reach a level of renewable energy or to be transferred to their host retailer to meet mandated obligations under the Renewable Energy Target
- Repurchases (“Repo”) – Purchase LGC’s and then sell them back at a higher price, taking advantage of banks’ lower cost of capital as compared to retailers or other liable parties, also freeing up the cashflow of market participants
In the last 2 years, only ANZ, CBA, Macquarie Bank and Westpac have traded LGC, whilst NAB had been active in the past. The following charts summarise their trading activity, where positive values indicate purchases and negative values indicate sales. We have aggregated all affiliated trading accounts to each parent bank, and where it is an internal transfer, these amounts are not included in the monthly totals.
Most of ANZ’s activity is in repo’s with June and July perfectly matched and the remaining 2024 purchases of 29,324 LGC’s being sold in January, just before annual acquittals are due.
CBA has been a net purchaser of LGC’s mainly from Shell, BP and the Snowtown wind farm (Neoen).
Macquarie Bank has been the most active bank, with trades with Zen Energy, Moorabool Wind Farm, Shell, BP, AGL and others.
Westpac has only recommenced trading in 2025, with purchases from Mercuria and Pacific Energy.