California carbon prices pulled back slightly during a quiet week that saw three successive days of no trading for the front-year contract.
The Dec-15 CCA slipped 2 cents week-on-week to $12.70 on ICE as volumes declined further from the previous week’s already low levels.
The Jun-15 contract held steady for the week at $12.57 in thin trading.
“The (CCA) auctions are covering a lot of utility demand, which makes for lower volume in the secondary market,” said one broker.
Relatively mild weather in California’s key population centers kept a lid on the state’s peak electricity demand during the first official week of summer, while zero-emissions solar generation continues to set output records during periods of peak consumption.
Solar capacity in California has grown by 2,235 megawatts over the past year, helping to offset decreased hydroelectric output in the face of long-term drought. The state’s grid operator has indicated that low-water conditions could also affect output from some of the state’s gas-fired plants, but that hydroelectric imports from the Pacific Northwest could provide a buffer, if necessary.
California regulators issued 1.33 million offsets this week, adding 6.6% to the total issued to date, now at 21.2 million.
Forest Carbon Partners earned the largest award of 847,895 offsets for its Trinity Timberlands project in northern California, with 162,796 of those credits deposited into a buffer account.
The board on Thursday approved its first farming offset protocol and widened a forestry one to include Alaska but developers fear any resulting rise in supply will be offset by a further decision to tighten rules for all forestry projects.
By Robert Mullin – email@example.com