The Clean Energy Regulator has announced the first Emissions Reduction Fund auction will open on Wednesday, April 15, giving industry a full two months’ notice.
Clean Energy Regulator chair Chloe Munro said the notice period, combined with a two-day bidding window, allows bidders to approach the first auction with the confidence they have time to follow the registration steps and prepare a competitive bid.
“We expect a good field of bidders, mainly from projects that have transitioned from the Carbon Farming Initiative. Competition will increase in future auctions as additional projects come forward, based on the new Emissions Reduction Fund methods,” she said.
“The auction process is very straightforward. The auction guidelines, forms, contract and extensive guidance material will be made available on the Clean Energy Regulator website. We will also offer training in how to register for the auction and lodge a bid.”
Bids will be lodged through AusTender. Bidders will be notified of the outcome within five business days of the auction. The Clean Energy Regulator will then publish the volume weighted average price and update the Emissions Reduction Fund register.
The Clean Energy Regulator has decided not to publish the benchmark price. The discretion to do so was included in the legislation as a precaution, in case participation in the first auction was inhibited by unrealistic expectations.
“Disclosing the benchmark price would not promote competition. Many projects have successfully delivered carbon abatement and are in a good position to bid based on experience of running their projects,” Ms Munro said.
“We will accept the lowest price bids up to 80 per cent of the volume offered below the benchmark price. This cut-off provides a strong incentive to bid competitively, based on the lowest price at which it is worth their while to operate their project.”