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LGC Market Update: what have we seen over the past quarter and what is the outlook?
Continuing a trend we saw over the back half of 2025, the decline in LGC prices has been relatively linear across the whole curve over the first quarter of 2026 - essentially continuing to be ‘one way traffic’.
LGCs are tradable certificates designed to incentivise large-scale renewable energy generation. For every megawatt-hour (MWh) of eligible renewable electricity generated, an accredited power station can create one LGC, which can then be sold to businesses looking to meet sustainability commitments.
How is the LGC market tracking?
Continuing a trend we saw over the back half of 2025, the decline in LGC prices has been relatively linear across the whole curve over the first quarter of 2026 - essentially continuing to be ‘one way traffic’.
Source: SmartestEnergy Australia
The underlying fundamentals continue to point to significant oversupply. The current surplus of LGCs (based on operational renewable assets) is further boosted by a robust pipeline of renewables.
On the demand side, the main interest continues to be from compliance buyers and intermediaries. Into the future, while we expect voluntary interest to ramp up, this will do little to offset the supply surplus.
In addition, voluntary buyers of LGCs may have additional certificate purchasing options over the medium to long-term if supply of Renewable Electricity Guarantee of Origin (REGO) certificate supply starts to build, especially alongside LGCs in the lead up to 2030. Going forward, it remains to be seen what impact data centre buildouts will have.
In terms of voluntary demand, the scope of buyers may expand beyond Australian corporates to large tech companies.
Considering the drop in the price of LGCs, potential Greenhouse Gas Protocol developments and increasing interest in time-of-day procurement strategies, demand for Australian RECs may see a notable increase.
Explore our guide to LGCs and the transition to REGOs
Read our insights based on our earlier 3 part blog series and learn more about how SmartestEnergy can support your green certificate procurement goals.
Disclaimer: The information enclosed is general information only; it cannot be relied upon as legal or financial advice. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person or entity.
Did you know that SmartestEnergy Australia now trades in Australian Carbon Credit Units (ACCUs)?
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