RGGI CO2 allowances sell for $5.50 in 28th auction

The Regional Greenhouse Gas Initiative (RGGI) sold more than 15.5 million carbon dioxide (CO2) allowances at a clearing price of $5.50 during the 28th auction, which took place on June 3.

Results of the auction by the nine Northeastern and Mid-Atlantic states participating in RGGI were announced June 5. RGGI is nation’s first market-based regulatory program to reduce greenhouse gas (GHG) pollution.

15,507,571 CO2 allowances were sold at the auction at a clearing price of $5.50. Bids for the CO2 allowances ranged from $2.05 to $12.50 per allowance.

The auction generated $85m for reinvestment in strategic programs, including energy efficiency, renewable energy, direct bill assistance, and GHG abatement programs, RGGI said in a news release. Cumulative proceeds from all RGGI CO2 allowance auctions are $2.1bn.

RGGI’s Auction 27, conducted in March, fetched a closing price of $5.41. RGGI had said in May that the average 2014 CO2 auction clearing price was $4.72, a 62% increase from $2.92 in 2013.

As usual, the RGGI news release was accompanied by an Auction 28 report by RGGI’s market monitor, Potomac Economics.

Forty-eight bidders participated in the offering of CO2 allowances. Bids were submitted to purchase 3.1 times the available supply of allowances, resulting in a clearing price of $5.50 per ton. Compliance-oriented entities purchased 47% of the allowances in the offering.

There was no indication of barriers to participation in the auction, Potomac Economics said.

The minimum bid price was $2.05 and the maximum bid was $12.50, according to the report. The average-median price was $5.38; the average-mean was $4.82 and the clearing price was $5.50.

RGGI’s participating states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.