Why now is the best time for your business to go green
Large-Scale Generation Certificates
Key takeaways
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LGC (Large-scale Generation Certificate) spot prices in Australia have fallen to historic lows in 2025–2026, dropping from the $40–$60 range to under $7 by 2026 due to sustained market oversupply.
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One LGC certifies that one megawatt-hour (MWh) of electricity was generated by an accredited renewable source like solar, wind, or hydro.
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Large businesses that previously purchased unbundled LGCs are increasingly entering into long-term renewable electricity contracts, including corporate Power Purchase Agreements (PPAs), which bundle electricity supply with environmental certificates.
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Supply has outgrown Australia's fixed Renewable Energy Target since 2020, while corporate demand has shifted from unbundled LGCs to long-term PPAs.
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Businesses can surrender LGCs to support market-based Scope 2 emissions reporting under frameworks like the Greenhouse Gas Protocol.
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Flo offers LGCs matched to 100% of a business's electricity usage, with options for specific technology types, generation vintages, locations, and historical consumption matching.
Introduction
If you’ve been looking for a more affordable way to support renewable energy locally, now is the perfect time to act.
The cost of Large-scale Generation Certificates (LGCs) has fallen significantly due to an oversupply in the market, making them more affordable for Australian businesses than they’ve been in years.
For businesses looking to support their Scope 2 emissions reporting or sustainability objectives, this shift presents a major opportunity.
What are Large-scale Generation Certificates?
A Large-scale Generation Certificate (LGC) is an electronic certificate created for every one megawatt-hour (MWh) of renewable electricity generated by an accredited solar, wind, or hydro facility.
In Australia, renewable energy generators such as solar farms, wind farms, and hydroelectric facilities create LGCs for every megawatt-hour (MWh) of renewable electricity they generate.
Each LGC acts as proof that one MWh of electricity has been generated from an eligible renewable energy source.
Businesses can purchase and surrender LGCs to offset the emissions associated with their electricity consumption and support local renewable energy generation. This is commonly used to support Scope 2 emissions reporting and broader ESG or sustainability initiatives.
Over the past decade, LGC prices have traded as high as $85 and traded between $40 and $60 in recent years before a sustained decline began in 2022. However, current market conditions have pushed prices to historic lows, creating a more affordable pathway for businesses looking to purchase Renewable Energy Certificates (RECs).
Why is there an oversupply of LGCs?
The oversupply is largely structural. Under Australia's Renewable Energy Target (RET), the annual certificate target has been fixed since around 2020, while actual large-scale renewable generation has continued to grow well beyond that target as new wind and solar projects have come online. That growing gap between certificate supply and the fixed compliance target is the main driver of the current oversupply.
On top of that structural gap, demand patterns have also shifted. Many large corporations that once purchased unbundled LGCs on the spot market have moved towards long-term renewable electricity agreements, such as PPAs, directly with generators — reducing spot-market demand further and adding to downward pressure on prices.
Together, these supply- and demand-side factors have pushed LGC prices to some of their lowest levels since the scheme began.
What does this mean for my business?
For businesses not currently purchasing renewable electricity products, current LGC pricing presents a cost-effective opportunity to start.
Flo now offers LGCs matched to 100% of your electricity usage, helping support Scope 2 emissions reporting, local renewable energy generation, and broader sustainability targets.
We can also offer options for matching historical electricity usage and future consumption requirements as part of your long-term strategy.
It's worth noting that LGC prices are set by market supply and demand and can move in either direction; the RET scheme itself is also legislated to run through to 2030, and businesses should factor this into any long-term sustainability strategy.
If you’d like to learn more about purchasing LGCs for your business, get in touch with the Flo team.