CP Daily: Thursday May 7, 2020

Published 23:07 on May 7, 2020  /  Last updated at 23:07 on May 7, 2020  /  Newsletter  /  No Comments

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

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TOP STORY

ANALYSIS: COVID-19 effects bite on airlines’ Q1 results, but major losses yet to come

Major European airlines have reported shrinking revenues for Q1 2020 as coronavirus containment efforts ground flights and passengers, with results expected to worsen for the next two quarters as bosses predict the sector will take several years to recover.

PODCAST

CARBON PULSE CONVERSATIONS 007: The Nature Conservancy

In the latest instalment of the Carbon Pulse Conversations podcast, we chat with Kelley Hamrick, policy advisor at US-based environmental organisation The Nature Conservancy (TNC), about coronavirus-related impacts on the Paris Agreement’s Article 6 negotiations and ICAO’s global aviation offset mechanism CORSIA.

AMERICAS

NA Markets: CCAs inch closer to floor price while RGGI dips on thin volume

California Carbon Allowance (CCA) prices flirted with the WCI auction reserve value this week amid higher compliance buying on the secondary market, while RGGI Allowances (RGAs) dipped after approaching the Emissions Containment Reserve (ECR) trigger price.

Trump administration, California still seeking timeline for remaining challenge to WCI market linkage

California and US Department of Justice (DOJ) officials are working to finalise a schedule for the remaining summary judgement challenge over the WCI linkage with Quebec, with the state and intervenors in the case focused on responding to the federal government’s latest argument.

Pennsylvania committee deadlocks on RGGI recommendation as legislators urge rulemaking halt

A Pennsylvania Department of Environmental Protection (DEP) committee split on Thursday regarding whether to recommend the RGGI-modelled ETS proposal for a vote this summer, while a bipartisan group of nearly 60 legislators called on Governor Tom Wolf (D) to suspend the cap-and-trade rulemaking in the wake of the coronavirus pandemic.

Canada postpones release of draft regulations for federal offset system

The Canadian environment ministry delayed the publication of regulations for a national offset programme due to the coronavirus pandemic on Thursday, as it announced it will seek further input on which project types should be prioritised in the first phase of protocol development.

EMEA

EU Market: EUAs climb above €19 on stronger auction, China data boost

EUAs lifted above €19 on Thursday as auction demand stabilised and Chinese economic data brightened wider market gloom stemming from coronavirus impacts.

Germany’s Uniper eases back on hedging spree in Q1 amid sales drop

German utility Uniper eased its forward power hedging over Q1 following a ramp-up in the prior quarter, though its power sales revenue dropped considerably, it said in its financial results.

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BITE-SIZED UPDATES FROM AROUND THE WORLD

Just draft it – The European Commission announced on Thursday that it accepted the requests from 18 EU nations – Belgium, Bulgaria, Cyprus, Czechia, Greece, Spain, Finland, Croatia, Hungary, Ireland, Italy, Lithuania, Latvia, Poland, Portugal, Romania, Sweden and Slovakia – for support to draft their territorial ‘just transition’ plans. All member states who want to tap into the Commission’s Just Transition Mechanism will need to submit their plans by year-end outlining their priorities and key actions. That includes the EU’s Just Transition Fund (JTF), a newly-established €7.5 billion vehicle of ‘fresh’ money to support coal- and energy-intensive regions in the energy transition, currently at the centre of the 27-nation bloc’s decision-making processes. Read Carbon Pulse’s latest on the JTF.

Cuts and bruises – Climate spending is one of the areas that will suffer when New Zealand presents its national budget next week, Finance Minister Grant Robertson said Thursday, according to the AAP. The budget will focus on bouncing back from the COVID-19 economic setback, and as New Zealand expects to run on a deficit for a while, it must put on ice some longer-term projects that would otherwise form part of the government strategy to become a low-carbon society, the minister said.

Car’s the star – Germany’s planned new car scrappage scheme to support the car industry must take into account climate targets, economy minister Peter Altmaier has said, adding that the government would support airline Lufthansa because it was “is part of the economy’s family silver” upon which millions of jobs depend. He added that Berlin would present an economic stimulus programme in early June. (Bild, Clean Energy Wire)

Back from the dead – Northern Ireland’s Kilroot power station is to be converted from coal-fired to gas-fired after it was awarded a contract in the latest energy market auction, the BBC reports. The move should guarantee the future of the County Antrim power station, which had been uncertain in recent years. Without conversion, Kilroot was facing closure by 2024 as the coal-burning technology would not meet environmental standards. The power station has been owned by the UK subsidiary of Czechia’s EPH since last year.

Stay home – Research by Longevity Intelligence shows a combination of working from home and office over the next six months will reduce carbon emissions per employee by 28% when looking at total energy usage across work related travel and building energy needs. As organisations emerge from Coronavirus lockdown, operational patterns will be significantly different in the new normal to balance safety and fears of further peaks, the company adds. Richard Payne, senior consultant at Longevity Intelligence, said “office occupancy levels are expected to be around 40-50% of pre-Coronavirus levels as offices will need to offer employees more space to work safely.”

It’s a date(s) – Saskatchewan and Ontario’s oral arguments against the federal ‘backstop’ carbon pricing regime will be heard Sep. 22 and 23 in Ottawa, the Supreme Court of Canada announced Thursday. The nation’s highest court last week revealed that the hearings would be heard in September but had not specified the dates. The conservative-led jurisdictions were originally slated to appeal their unsuccessful challenges from their respective provincial courts in March before the coronavirus pandemic delayed the hearings.

Very valid – The Maine Supreme Court on Thursday affirmed a decision of the Secretary of State that validated a direct initiative petition regarding the New England Clean Energy Connect Transmission Project (NECEC). If approved by Maine voters at the November election, the petition would repeal a key permit necessary to build Central Maine Power’s cross-border NECEC project, which would transport hydroelectricity from Quebec into the Northeast US. The project was chosen by Massachusetts regulators to fulfil the state’s clean energy requirements, and RGGI market participants have viewed the project as a bearish driver on allowance prices.

Viral studies – The National Oceanic and Atmospheric Administration will study the impact of the coronavirus on the environment. The agency said Wednesday scientists will examine the changes in atmospheric composition, weather, climate, and precipitation over weeks to months. The research will be used to help improve NOAA’s weather forecasting and climate projections. It will include evaluating how changes in activity affect emissions like carbon dioxide and methane, and whether reduced airline traffic is affecting the amount of solar energy reaching the surface. Separately, Johns Hopkins University has also announced plans for rigorous “climate impact assessments” of the efforts as part of a much wider set of pandemic-related research grants. Researchers plan to track how stimulus funds are spent and model the avoided emissions that result from the investments. The project comes amid calls for governments to ensure recovery packages help bolster low-carbon energy tech and industries — and uncertainty about whether this will happen. (Politico, Axios)

And finally… Locked on target – While US power generators continue to assess the impacts of COVID-19 on electricity demand, those forecasting a shift to less carbon-intensive assets have not yet changed near-term plans to retire coal plants, S&P Global reports. In 2019, US power generators retired 13,863 MW of coal-fired generation, the highest amount retired since 2015 when new mercury regulations drove the retirement of 15,124 MW, an S&P Global Market Intelligence analysis shows. As of Apr. 17, generators had 9,038 MW worth of capacity slated for retirement in 2020 and another 23,010 MW set to retire between 2021 and the end of 2025. While companies around the world are reassessing capital spending forecasts and looking to preserve liquidity, most utilities set to retire coal plants said they are not yet seeing a reason to slow those plans.

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