PPAs, LGCs, ACCUs and green products

Pay-as-produced means the settlement quantity follows the output defined by the contract; it does not promise the buyer a fixed quantity in every hour. A firm or shaped product defines a different delivery or settlement profile and allocates balancing obligations differently. Read the definitions of eligible output, losses, outages and curtailment before treating two quoted strike prices as comparable.

For this original exercise, three one-hour periods have customer load of 40, 40 and 40 MWh and eligible project output of 60, 30 and 0 MWh. The project supplies a 90 MWh contractual settlement quantity against 120 MWh of customer demand. The signed residuals are −20, +10 and +40 MWh. Negative residual means the contract quantity exceeds load in that period; it is not ‘negative consumption’.

The net volume gap is 30 MWh, but that aggregate hides a daytime surplus and a much larger final-period shortfall. A project with more total MWh is not necessarily a better hedge for an evening-heavy customer. Compare load and eligible output on the same interval clock and with the same price reference.

Use spot prices of −$20, $60 and $200/MWh and a $70/MWh strike. Assume a financial pay-as-produced PPA where the buyer receives spot and pays fixed on 60, 30 and 0 MWh. The separate physical purchase costs −$800 + $2,400 + $8,000 = $9,600 in this deliberately simplified spot-indexed supply example.

The PPA's net receipts to the buyer are −$5,400, −$300 and $0, totalling −$5,700. A negative receipt is a payment. Net energy cost is therefore $9,600 − (−$5,700) = $15,300 before retail, network, certificate, tax and other charges. The effective energy-only cost is $127.50 per customer MWh, not the $70 strike.

Cross-check using the contract quantity at strike plus the signed residual at spot: 90 × $70 + (−20 × −$20) + (10 × $60) + (40 × $200) = $15,300. The negative-price period illustrates why an excess contract quantity can be costly. Actual clauses may change eligibility or settlement at negative prices; never assume this teaching rule appears in every PPA.

An LGC is associated with one MWh of eligible renewable generation under the Renewable Energy Target arrangements. An ACCU represents one tonne of carbon-dioxide-equivalent abatement under the ACCU Scheme. MWh and tCO₂-e are different units. You cannot substitute one for the other merely because both products are described as environmental.

In a synthetic procurement ledger, 90 eligible electricity certificates allocated to 120 MWh of consumption would cover 75% on a one-certificate-per-MWh arithmetic basis. This is not a completed reporting claim: confirm product eligibility, vintage, ownership, surrender or retirement, geographic and accounting boundaries, and whether another party has already used the attributes.

If the PPA seller retains or sells the certificates, buying the energy contract alone does not prove that the customer owns those attributes. Keep any emissions calculation separate, using the applicable accounting method rather than assuming a universal conversion from one LGC to one ACCU. A credible procurement recommendation records exactly what claim the evidence can support.

• CER — creating LGCs
• CER — Australian carbon credit units

As checked on 19 September 2026, CER describes REGO as a distinct renewable-electricity certification scheme within Guarantee of Origin. It can document renewable electricity generated or eligible storage dispatch. CER states that the same electricity generation cannot be used to create both an LGC and a REGO certificate, even if a facility participates in both schemes.

Treat the product definition and eligible use as a live verification task. Record the scheme, facility, relevant generation or dispatch period, ownership and certificate status. Do not assume that a familiar LGC process automatically satisfies the separate REGO requirements, or that a battery can create additional renewable attributes from unverified charging energy.

Granular attribute records can support more specific analysis, but an annual total still does not establish hourly matching. In the three-period exercise, coincident matching is min(40,60) + min(40,30) + min(40,0) = 70 MWh, or about 58.3% of load. The aggregate 75% and coincident 58.3% answer different questions; neither demonstrates an approved product claim without its governing framework.

• CER — Renewable Electricity Guarantee of Origin

Prepare a comparison of a pay-as-produced offer and a firmed alternative. Include scope, output shape, buyer load, settlement reference, negative-price treatment, certificate rights, term, indexation, credit support, delay provisions and exit rights. Document which assumptions are commercial choices and which need legal, engineering or accounting review.

Stress the last-period spot price from $200 to $300/MWh while keeping load and project output unchanged. Physical cost rises by 40 × $100 = $4,000 and the PPA receipt does not change because eligible output in that period is zero. Net cost rises to $19,300. This is a fixed-profile sensitivity, not a forecast or an optimised procurement strategy.

Recommend the next decision gate: obtain interval load data, reconcile eligible output and attribute ownership, and compare alternatives on total cost and residual risk. Use Topics 20 and 21 for exposure and cash-flow mechanics, Topic 36 for renewable capture value, Topic 42 for large-load needs and Topic 45 for the separate emissions-compliance boundary. The linked case exercise provides the same data for independent reconstruction.