US power plants are concerned about the scarcity of credits in a new cap-and-trade scheme
Earlier this week, the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade scheme covering power plants in ten north-eastern US States, announced that it will hold its first auction on the 10th of September.
Environmental Capital reported an estimate from ICF that a reasonable price per ton in the RGGI would be US$2.32. Earlier today, the first forward trade was conducted at whopping US$7 per ton.
This must reflect a level of concern that the reductions required by the RGGI cap will be more expensive than anticipated.
It will be interesting to watch the RGGI future price over the next few months as more forward deals are done – and also to see how the auction design works in September, given the planned increased use of auctioning in the EU ETS.
