To quickly access the page content, please click on the links below.
Climate Action Council Meeting 21st of November, 2022
TRADE DATE |
HUB |
PRODUCT |
STRIP |
SETTLEMENT PRICE |
PERCENTAGE DIFFERENCE FROM DEC 22 |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-22 |
114.50 |
100% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-23 |
95.30 |
83% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-24 |
79.65 |
70% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-25 |
79.85 |
70% |
11/30/222 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-26 |
66.65 |
58% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-27 |
67.85 |
59% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-28 |
67.20 |
59% |
11/30/22 |
NYISO J Off-Peak |
Off-Peak Futures (1 MW) |
Dec-29 |
67.15 |
59% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-22 |
131.50 |
100% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-23 |
114.50 |
87% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-24 |
105.95 |
81% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-25 |
103.35 |
79% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-26 |
86.10 |
65% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-27 |
94.15 |
72% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-28 |
88.75 |
67% |
11/30/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-29 |
87.75 |
67% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-22 |
86.89 |
100% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-23 |
75.10 |
87% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-24 |
65.30 |
75% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-25 |
60.35 |
70% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-26 |
61.25 |
71% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-27 |
63.70 |
73% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-28 |
63.45 |
73% |
11/30/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-29 |
64.15 |
74% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-22 |
76.71 |
100% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-23 |
64.20 |
84% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-24 |
53.80 |
70% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-25 |
44.80 |
58% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-26 |
47.65 |
62% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-27 |
44.80 |
64% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-28 |
49.40 |
64% |
11/30/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-29 |
50.05 |
65% |
NYISO J Off-Peak: The curve remains mostly backwardated from Dec ’22 to Dec ’29. The market is still not pricing in a carbon fee as it did back in 2019/2020.
PJM PSEG: The curve remains backwardated/flat from Dec ’22 to Dec ’25 then goes into contango from Dec ’26 through Dec ’29 slightly. The market is not pricing in any additional carbon (besides RGGI) as the CPSTF sunsetted.
Climate Action Council approves scoping plan. The New York State Climate Action Council has finished and voted to adopt its scoping plan, after a three-year process of public input and discussion. The plan recommends policies and actions intended to reduce greenhouse gas emissions and support the state’s goal of economy-wide carbon neutrality by 2050. The plan calls for emissions to be reduced by 40% from 1990 levels by 2030, and to produce 100% of the state’s electricity from zero-emission sources by 2040. The plan also calls for the consideration of a clean fuel standard to support the electrification of the state's transportation industry. A state-wide cap and trade program, referred to as a “cap-and-invest” program, is also proposed. This program would function like the RGGI program with covered entities being required to purchase allowances equal to their emissions. Power plants could be subject to one of the two programs, or the state may provide credits for payments made for RGGI allowances according to the scoping plan.
The scoping plan recommends several actions including:
Offshore wind transmission approved by NY regulators. The New York State Public Service Commission has approved the construction of a 25-mile transmission line from the Sunrise Wind facility to the NYISO grid. Sunrise Wind is expected to begin operations in 2025 and generate 880 Mw, with the capability to expand generation to 924 MW. While New York’s upstate region generates most of its electricity using renewables, there is not enough transmission capacity to bring it to the southern region of the state where most of the population lives.
New York electricity prices are expected to rise this winter. NYISO said that they are expecting electricity prices to rise this winter compared to last year. Their forecast is based on the recovery of residential and business demand. During the Covid-19 pandemic, the average daily load fell by 4%, prompting less buildout of generating capacity. The amount of demand however will depend on temperatures and how close or far they are from seasonal averages.
New Jersey solar additions flat in October. New Jersey’s solar sector added only 24.6 MW of new solar generating capacity in the month of October. The state typically revises its numbers later, so the actual number may be slightly higher or lower. Most of the solar additions in October were linked with the state's solar transition incentive program, which awards renewable energy certificates. These additions leave New Jersey's solar generating capacity at 4,218 MW, with 357 MW added this year.
New York climate bond passes. The ballot proposal will let the state of New York issue $4.2 billion in bonds to fund renewable energy projects and climate change mitigation. The department of environmental conservation will be administering the bonds.
The final RGGI auction of 2022 clears at the lowest price of the previous five auctions. The December auction cleared at $12.99/ton, which was 46c lower than the prior auction. RGGI auctions had been clearing at record prices for six consecutive auctions until June of this year. Following the blockage of Pennsylvania’s entry into the program in July, auction clearing prices have been declining. 71% of allowances were purchased by compliance entities, down from 80% in the September auction, and lower than any other auction of 2022.
Dominion will need to buy 31 million more allowances before Virginia exits RGGI. Virginia's largest utility, Dominion, has forecasted its required RGGI allowance purchases for 2023. While Virginia is currently in the process of exiting RGGI, Dominion will still need to purchase approximately 31 million allowances but is not forecasting any compliance requirements beyond 2023. The company will purchase 25% of its forecast 2023 allowance requirement at RGGI auctions and acquire the remaining 75% on the secondary market. Dominion is asking for regulatory approval to levy a $.64 charge to each customer to cover the cost of their compliance obligations.
Virginia regulators vote to advance RGGI repeal. The Virginia Air Pollution Control Board voted to further advance regulation that will remove Virginia from the RGGI program. The regulation must now be approved by executive branch officials before a 60-day public comment period, and then a final review by the Air Pollution Control Board. State officials are aiming to leave the RGGI program in December 2023, a process the state claims will allow for an “orderly withdrawal” and will “help prevent market fluctuations” in allowance prices.
Contact Information
Mike Taylor
Director, Emissions Trading
AEGIS Hedging Solutions
mtaylor@aegis-hedging.com
713-385-3321
Questions? Contact our team for more information: environmental@aegis-hedging.com
CONFIDENTIAL – UNAUTHORIZED THIRD-PARTY DISTRIBUTION PROHIBITED