CP Daily: Monday January 28, 2019

Published 23:25 on January 28, 2019  /  Last updated at 23:25 on January 28, 2019  /  Newsletter  /  No Comments

A daily summary of our news plus bite-sized updates from around the world.

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TOP STORY

German commission agrees on managed coal exit by 2038

Germany’s government-appointed coal commission has agreed on a exit timetable for the country that would culminate in phasing out the fuel by 2038, ending more than six months of talks.

AMERICAS

WCI searching for volume holders as entities near trading limits -sources

California carbon market participants need additional counterparties who can hold volume for future use amid the rising WCI allowance surplus and tightening holding limits, numerous sources said.

PG&E bankruptcy could alter California ETS regulations, while renewable contracts remain in place

California utility Pacific Gas & Electric (PG&E) could prompt future changes to the state’s cap-and-trade regulations depending on the outcome of Chapter 11 proceedings, but the company can’t immediately unwind any renewable energy contracts without federal approval.

Environmental groups urge New Jersey to lower proposed RGGI cap

Numerous environmental groups urged New Jersey to adopt a more stringent RGGI cap at its first stakeholder meeting on Friday in order to further strengthen the environmental performance of the regional carbon programme.

Hawaii lawmakers float two carbon tax proposals

Hawaii state legislators put forth two different carbon tax proposals last week, with one seeking to swap out the state’s fuel tax and the other allocating a portion of the revenue to taxpayers.

Ontario court rules lawsuit on cap-and-trade cancellation may proceed

An Ontario Superior Court justice ruled Friday that a green group’s challenge to the provincial government’s cancellation of its WCI-linked carbon market last year can continue, but a final ruling for the petitioners this spring would not bring back the scrapped ETS.

EMEA

EU Market: EUAs drop a euro in wake of German coal deal

EUAs tumbled by more than a euro to below €23 on Monday amid speculation that Germany’s coal phaseout deal would prompt big-emitting utilities to unwind generation hedges.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Doubling down – Some 15 to 20 funds have begun or are considering multi-month or multi-year bullish bets in EUAs with buyers as far away as US and India, according to consultancy Redshaw Advisors. Fund manager Per Lekander at Landsdowne sees continued strong upside potential and is closely watching the near-daily auction bid coverage for signs of demand. “If it has not materialised in four weeks, I think the recovery to fundamental value – which I put well north of €50 a ton – will be more gradual over a few years,” he said. (Bloomberg)

Nordic drive – The five Nordic countries on Friday committed to strengthen their emission reduction targets by 2020 in an effort to be in line with the Paris Agreement’s 1.5C global warming goal. Leaders and ministers from Norway, Sweden, Finland, Denmark, and Iceland also pledged to strengthen their cooperation on climate matters while each country pursues carbon neutrality, promotes carbon pricing, and vows to reform fossil fuel subsidy programmes.

Dutch switch-off – The Netherlands government will in April release a plan for how to meet its 2020 emission target shortfall, PM Mark Rutte said. The government’s environment agency projected it would cut emissions 21% under 1990 by next year, short of the 25% the government has pledged to reach following a court order it is still appealing. The most obvious option is to close two of the country’s five coal power plants earlier than their scheduled 2024 switch-off, while buying foreign offsets is a less popular route. The Netherlands’ target to source 14% of its power through renewable sources is also unattainable, the Dutch Environmental Agency said. (Reuters)

Renewables ramp – France plans to increase its renewable energy capacity from 48.6 GW at the end of 2017 to 74 GW in 2023 and to 113 GW in 2028 with a system of regular tenders under a draft 10-year energy strategy plan published on Friday. The PPE plan lays out capacity targets for various energy sectors over 2019-2023 and 2024-28. It also confirmed that four to six nuclear reactors will be closed by 2028. (Reuters)

Cost contention – A Virginia regulatory commission told a legislative hearing last week that the costs of the state’s future participation in the northeast US RGGI carbon market would be much greater than those purported by the governor’s office. The State Corporation Commission (SCC) said the average Virginia residential customer would have to pay $7 to $12 more per month for electricity once the state enters RGGI next year. An official for the SCC told Carbon Pulse the agency’s analysis relied on utility Dominion Energy’s actual weighted average cost of capital at 6.31%, the published RGGI allowance floor price, and the fact that generation remains a key component of the overall rates paid by Virginia customers because of Dominion’s status as a vertically-integrated utility. However, Governor Ralph Northam’s (D) office said that linking to the RGGI market would only yield increased electric costs of less than $1 per month. (AP)

Better together – US Democrats who want to tackle climate change are more likely to be able to pass bills with bi-partisan support, Axios reports. While America’s political discourse has gotten more partisan in recent years, actual laws passed by Congress have not, according to forthcoming research described to Axios by James Curry, a political scientist at University of Utah, and Frances Lee, a politics professor at the University of Maryland. Since 1985, majority parties controlling Congress have passed just 12 laws getting largely what they wanted on big policy priorities over the opposition of most members of the minority party and the minority party’s top leaders. That’s less than 5% of all the majority-party policy priorities considered in more than 30 years. “It’s extraordinarily difficult to pass anything that’s partisan. It’s not happening more than it used to. It’s something that needs to be understood by activists,” Lee said.

Council row  – A carbon credit deal hurriedly signed in December is creating controversy in Hawke’s Bay in New Zealand. The regional council agreed on Dec. 19 to lend 100,000 carbon credits (NZUs) to Kiwi company Kahutia Limited Partnership, which plans to sell them for around NZ$2.5 mln to fund planting of around 100,000 hectares of forest. The loan will be repaid in 10 years with new credits and 2% interest. However, some regional councillors are complaining the deal was made behind closed doors, leaving them with very little time to consider the issue. They also reacted that the interest rate was only a fifth of what other companies pay the council. Parties involved in the deal, however, called the protesting councillors “racist”. (Radio NZ)

PPA party – Corporations bought a record amount of 13.4 GW of clean energy through power purchase agreements (PPAs) in 2018, shattering the previous record of 6.1 GW set in 2017, according to BloombergNEF’s (BNEF) latest Corporate Energy Market Outlook published Monday. Clean energy contracts were signed by 121 corporations in 21 different countries, with more than 60% of the global activity occurring in the US. Facebook has been spearheading purchases by companies with 2.6 GW signed. Last year, the US also saw the emergence of smaller corporate energy buyers aggregating their purchases making up 31% of total activity in the country.

And finally… From ‘global warming’ to ‘climate change’ to ‘unusual and costly weather’ – Leading climate scientists and meteorologists are banking on a new strategy for talking about climate change: Take the politics out of it. That means avoiding the phrase “climate change,” so loaded with partisan connotations as it is. Stop talking about who or what is most responsible. And focus instead on what is happening and how unusual it is – and what it is costing communities. That was a main takeaway at the American Meteorological Society’s annual meeting this month, where top meteorologists and environmental scientists from around the country gathered to hear the latest research on record rainfall and drought, debate new weather prediction models and digest all manner of analysis on climatic mutations. (Politico)

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