The most recent quarterly auction with the Regional Greenhouse Gas Initiative (RGGI) (held December 1, 2021) resulted in a clearing price of $ 13.00 per share. quota, which exceeded the previous auction’s record price of $ 9.30 per share. quota. Each quota represents a limited permit for power plants to emit a short tonne of CO2.
RGGI is a market-based effort in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia to limit and reduce CO2 emissions from the electricity sector. The latest RGGI auction sold 27 million CO2 allowances, an increase from 23 million allowances sold at the previous auction.
Individual CO2budget trade programs in each participating state implement RGGI. The number of allowances for sale decreases over time so that power plants in the RGGI states can reduce or eliminate the need to purchase emission allowances.
In the latest auction – the 54thth since the initial auction in september 2008 – the clearing price reached the threshold that triggers several allowances to be available for sale to help provide market stability. This trigger, known as the cost containment reserve (CCR), becomes available if the temporary clearing price is $ 13.00 per share. quota or more. At the December auction, RGGI initially offered 23.1 million allowances, all of which were sold. After the CCR was triggered, RGGI sold an additional 3.9 million allowances. This CCR threshold price increases by 7% per year and will be 13.91 USD per. quota in the next auction, which will take place on March 9, 2022.
The December auction generated $ 351.5 million for RGGI states. States may invest these funds in programs that encourage the introduction of energy efficiency and renewable energy, reduce customers’ energy costs, or otherwise support greenhouse gas reduction programs.
The climate goals and commitments of the RGGI participating states, such as Renewable Portfolio Standards (RPS) (which require increasing renewable-powered electricity generation), have changed since 2018. For example, Maine increased the severity of its RPS in mid-2019. and Maryland revised its standard in 2021. RGGI began its third program review in early 2021, and according to its preliminary timeline, RGGI plans to complete its most recent program review in early 2023.
Lent by Today In Energy. Main contributor: O. Nilay Manzagol
Selected graph from the US Energy Information Administration, based on the Regional Greenhouse Gas Initiative
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