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The results from the sixth Regional Greenhouse Gas Initiative (RGGI) auction were released this morning. Similar to the previous auction in September, this one included both vintage 2009 allowances and vintage 2012 allowances.
Approximately 30 million vintage 2009 allowances sold at the auction for the clearing price of $2.05. (See table 1 below.) The vintage 2009 allowances closed yesterday at $2.06. By comparison, the last quarterly RGGI auction in September cleared at $2.19, but closed at $2.50 the night before results were announced.
The vintage 2009 auction saw an increase in participantion relative to the last auction with 62 bidders compared to 54 in September. Bids were submitted for 2.6 times the available supply, but the auction still cleared 7% lower than Auction 5. With the market expected to be oversupplied by approximately 30-40 million allowances compared to actual emissions, this price was expected by the market.
As with the previous auction, non-compliance entities did not participate in the Vintage 2012 portion of the auction. The auction cleared right at the $1.86 reserve price, which obviously indicates minimal demand for the allowances. Furthermore, only 1.6 million of the 2.2 million allowances on auction for the 2012 vintage were sold.
| TABLE 1 |
Auction 5 Stats |
Vintage 2009 |
Vintage 2012 |
Bidders: |
62 |
8 |
Percent Compliance: |
65% |
100% |
| Clearing Price: |
$2.05 |
$1.86 |
* Data from rggi.org
Should you have any questions regarding the RGGI auction, current market prices, or wish to transact in either RGGI forward or option markets, we encourage you to contact our RGGI brokerage team at +1914.323.0255.
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