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Climate Action Council Meeting 25th of October, 2022
TRADE DATE |
HUB |
PRODUCT |
STRIP |
SETTLEMENT PRICE |
PERCENTAGE DIFFERENCE FROM DEC 22 |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-22 |
93.90 |
100% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-23 |
78.75 |
84% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-24 |
67.75 |
72% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-25 |
75.85 |
81% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-26 |
70.5 |
75% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-27 |
73.05 |
78% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-28 |
69.45 |
74% |
10/31/22 |
NYISO J Off-Peak |
Off-Peak Futures (50 MW) |
Dec-29 |
64.80 |
69% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-22 |
111.00 |
100% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-23 |
97.45 |
88% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-24 |
105.00 |
95% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-25 |
95.55 |
86% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-26 |
86.70 |
78% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-27 |
90.00 |
81% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-28 |
84.85 |
76% |
10/31/22 |
NYISO J |
Peak Futures (1 MW) |
Dec-29 |
83.90 |
76% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-22 |
76.45 |
100% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-23 |
66.70 |
87% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-24 |
58.10 |
76% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-25 |
52.65 |
69% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-26 |
54.75 |
72% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-27 |
57.95 |
76% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-28 |
57.95 |
76% |
10/31/22 |
PJM PSEG Zone DA |
Peak Futures (1 MW) |
Dec-29 |
58.70 |
77% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-22 |
67.85 |
100% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-23 |
54.70 |
81% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-24 |
41.00 |
60% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-25 |
39.40 |
58% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-26 |
42.55 |
63% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-27 |
43.80 |
65% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-28 |
44.40 |
65% |
10/31/22 |
PJM PSEG Zone DA Off-Peak |
Off-Peak Futures (1 MW) |
Dec-29 |
45.15 |
67% |
NYISO J Off-Peak: The curve remains mostly backwardated from Dec ’22 to Dec ’29 then market. The market is still not pricing in carbon fee as it did back in 2019/2020.
PJM PSEG: The curve remains backwardated/flat from Dec ’22 to Dec ’25 then goes contango from Dec ’26 through Dec ’29 slightly. The market is not pricing in any additional carbon (besides RGGI) as the CPSTF sunsetted.
New York selects solar projects for new program. 21 solar projects have been selected to participate in the Expanded Solar for All community program, designed for low-income residents of the state. The program is designed as an alternative for those who want to support solar powered energy but are unable to do so. By subscribing to a solar project, participants can receive a credit on their electricity bill. The total capacity of the project is 120MW and will service 175,000 New York residents. This project is part of a $1.8 billion program intended to expand solar to more residents and lower energy prices, with the state looking to construct 10GW of solar by 2030.
New York delays plan for tier 4 RECs. The Public Service Commission has granted the New York State Energy Research and Development Authority (NYSERDA) another year to finalize the states tier 4 REC plan. The need for additional time was based on the desire for the Tier 4 program to be a “complex and entirely new component” of the state’s clean energy strategy. The goal of the strategy is for New York to generate 70% of their power from renewable resources by 2030, and 100% by 2040. NYSERDA said that energy deliveries from Tier 4 contracts are not expected until 2026 and 2027, which should allow enough time to address the complexities of the program.
New Jersey solar additions decline. Additions of utility scale solar have declined in September from 52.2MW initially reported in August to 24.6MW. This would make September the third lowest month for solar additions in 2022. August is currently the month with the most solar additions this year. New Jersey has added an average of 35.8MW per month of solar generation this year, an increase from the 2021 average of 28MW per month. New Jerseys total solar capacity is now 4,184 MW, with 80% coming from smaller projects, and only 19% coming from utility scale solar facilities.
New Jersey exempts some solar projects from guidelines. Regulators in New Jersey will allow some residential solar projects to participate in the states incentive program despite not meeting the programs guidelines. However, regulators said that this exemption would not set a precedent. Regulators approved applications for 26 projects to be linked with the state’s solar incentive program, which is a part of the states SREC-II program. systems that were given an exemption fall into the category of small-scale solar installations, which make up about 80% of the state’s solar infrastructure.
Pennsylvania’s entry into RGGI is lawful, say RGGI states. States involved in the RGGI program are asking courts to allow Pennsylvania to join the program, while some lawmakers from the state argue that doing so would put an unfair burden on coal and gas-fired power plants. There will be a court hearing on November 16th for stakeholders to discuss their views on the potential admission of Pennsylvania to the RGGI program. RGGI opponents claim the move to enter the program is unlawful and have so far been successful in convincing the court to issue a preliminary injunction in July. The court has said that they are interested in the argument that the RGGI rule would constitute a tax requiring legislative approval.
RGGI Auction 58. The next RGGI auction is set for December 7th but will exclude Pennsylvania. The RGGI program said in a notice that “Pennsylvania will not be offering allowances for sale in Auction 58”. Pennsylvania is still considered to be a “participating state”, however a preliminary injunction issued by the states court has halted the states participation in the program. In terms of emissions Pennsylvania would be the largest participant in the program. If cleared the state would have sold 16 million allowances in the September auction, or 42% of the total amount sold.
Environmental groups pursue case against Virginia's RGGI exit. Several environmental groups are preparing for a legal battle against the state of Virginia, over the state's exit from the RGGI program. The groups claim that the exit would be a violation of state law, citing the 2020 Virginia Clean Economy Act. The governor of Virginia claims that the law allows for entrance into RGGI but does not require it. Virginia joined RGGI in 2021 and is responsible for 23% of the program's Co2 emissions. The state is attempting to exit the program by December 2023, but potential court battles could delay this.
RGGI Overview Supply and Demand
Base Case from AEGIS assumes Virginia removed at end of 2023 and Pennsylvania does not join.
Questions? Contact our team for more information: environmental@aegis-hedging.com
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