RGGI Auction Prices Rebound in Response to Proposed Changes
BOSTON — Prices increased in the first Regional Greenhouse Gas Initiative (RGGI) auction since the participating states proposed a set of changes to the program. This is an initial indication that the market expects the program to be stronger in the future. All 14,371,585 available allowances were sold at a clearing price of $4.35, generating $62,516,395 in revenue for reinvestment. This brings the program’s total revenue to $2.78 billion—most of which has been used to fund energy efficiency and other consumer benefit programs. The Auction 37 clearing price is 72% higher than the previous auction and 4% lower than the clearing price from one year ago. This marks an end to the steady decline in auction clearing prices that began in early 2016.
The key changes announced by the states include:
- Reducing the emissions cap by 30% from 2020 to 2030;
- Conducting a full adjustment for banked allowances;
- Strengthening the existing Cost Containment Reserve; and
- Establishing an Emissions Containment Reserve
“We applaud the RGGI states for working together to improve the program, and the Auction 37 results show that these changes should make RGGI stronger,” said Acadia Center President Daniel Sosland. “After nearly two years of negotiations, the states have put RGGI on a course for long-term success.”
“Proposed policy changes have driven prices upward in this auction, but implementing RGGI reforms is the only way to ensure that prices won’t dive again,” said Jordan Stutt, Policy Analyst with Acadia Center. “Emissions continue to fall rapidly—each of the first two quarters in 2017 resulted in record low quarterly emissions—and even the new cap may not decline quickly enough to keep up with decarbonization in the electric sector. Fortunately, the new addition of an Emissions Containment Reserve should help the states reduce emissions further, at low costs to consumers.”
“The increase in allowance prices is a testament to the leadership of the RGGI states,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “By following through on proposed reforms, the nine RGGI states can demonstrate the power of bipartisan action to address climate change.”
Information on RGGI’s performance to date can be found in Acadia Center’s latest RGGI Status Report:
Additional information on the benefits of RGGI can be found at https://www.cleanenergyeconomy.us/
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine northeastern and mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances,” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.
The official RGGI web site is: www.rggi.org
Jordan Stutt, Policy Analyst, Clean Energy Initiative
firstname.lastname@example.org, 617-742-0054 x105
Peter Shattuck, Director, Clean Energy Initiative
email@example.com, 617-742-0054 x103
Our Opinion: Massachusetts allies make it easier to breathe
While a number of environmental groups had advocated for deeper emissions reductions over the past year, all expressed support of the agreement, with Peter Shattuck, director of the Acadia Center, a Boston-based advocacy group, telling The Boston Globe “This is what climate leadership looks like.” Significantly, the New England Power Generators Association (NEPGA), which has opposed emissions reduction mandates for not considering the burden on its members, praised the new agreement, as it has the RGGI in general. “Market-based programs provide the most efficient, competitive, and lowest-risk way to address climate change,” said NEPGA President Dan Dolan in The Globe.
The Acadia Club [sic] has found that RGGI states have reduced their emissions by 16 percent more than other states while seeing economic growth of 3.6 percent more than those states. Energy prices fell by an average of 3.4 percent while rising by an average of 7.2 percent in non-RGGI states. Those numbers are backed by the Sierra Club and other environmental organizations. The Cambridge, Ma.-based consulting group Abt Associates said in The Globe that it estimates the the RGGI has resulted in the saving of as many as 800 lives, reduced asthma attacks by bout 8,000 and saved as much as $6 billion in health care costs.
Read the full editorial from the Berkshire Eagle here.
Stepping Up Pace on Fighting Climate Change
Peter Shattuck, director of the Clean Energy Initiative at the Acadia Center, calls the agreement a major victory for bipartisan action to address climate change.
“This shows that northeast states are stepping up to fill the void left by the Trump administration’s irresponsible and misguided efforts to roll back every major environmental protection on the books,” he states.
RGGI estimates that extending the cap will bring carbon emissions in the region down 65 percent from 2009 levels. The Trump administration argues that environmental regulations hinder industrial development and economic growth.
The nine RGGI states together comprise the sixth-largest economy in the world, and Shattuck says RGGI’s record of pollution reduction and economic growth proves that the cooperative’s approach to fighting climate change can work.
“It puts a price on pollution, which unleashes innovative ways to avoid that pollution,” he points out. “And that’s what we’ve seen from RGGI and other market-based programs.”
But he cautions that the even these further carbon reductions by RGGI aren’t enough to slow global climate change. Shattuck says more states need to join in the effort, and move beyond RGGI’s mission of cutting power-plant pollution.
“This step helps clean up the electric sector, but we’re also going to need to tackle transportation, which is the largest source of climate pollution in the region and now, the country as a whole,” he stresses.
Read the full story from Public News Service here.
Environmentalists React to Regional Proposal to Cut Carbon Emissions
Peter Shattuck, director of the clean energy initiative for Acadia Center, said this proposal is what climate leadership looks like.
“(Rhode Island) Governor Raimondo and other governors have really stepped up to fill the void of the Trump administration’s misguided and irresponsible decision to roll back all our major climate policies (and) to withdraw from the Paris Climate Agreement,” Shattuck said.
From 2008 to 2015, RGGI states have seen 3.6 percent more economic growth than non-RGGI states and electricity prices have gone down 3.4 percent regionally, according to a report by Acadia Center.
Read the full story from Rhode Island Public Radio here.
Northeast Strengthens Carbon Goals as Federal Rules Fade
“If you add it up, the RGGI states are the sixth-largest economy in the world. This is a significant development,” said Peter Shattuck, who directs the clean energy initiative at the Boston-based Acadia Center. “It shows states picking up on climate action in the wake of the Paris withdrawal.”
Read the full article from E&E News on Scientific American here.
As Feds Move Away From Climate Change, Maine and New England Consider Stronger CO2 Caps
“All the evidence points to the fact that RGGI’s working well, it’s been a great success since its inception,” says Peter Shattuck, director of the Clean Energy Initiative at the Acadia Center, an an environmental policy group with offices in Maine and around the northeast.
“[Since RGGI’s 2009 startup] carbon pollution is down 40 percent, electricity prices are down 3 percent, and at the same time [the participating] states’ economies have grown by 25 percent,” he says.
“This is an opportunity and a necessity to fill that void. And this is not uncharted territory for RGGI itself,” Shattuck says. “It was conceived during the 2000’s when the Bush administration was not acting on climate and a bipartisan group of governors came together and formed the program.”
Listen to the whole interview from Maine Things Considered on Maine Public Radio here.
Environmental groups push to shorten offshore wind timeline
Peter Shattuck, state director of the environmental advocacy group the Acadia Center, said his group recognizes ELM’s frustrations but added, “We wouldn’t go quite that far.” But he did acknowledge the problems environmentalists face in trying to shape the policies for the wind farm developments.
“It’s a potential conflict, but there is no way around it,” he said of the companies’ prominent roles developing the RFPs. “But someone has to negotiate on behalf of Massachusetts. They have to go out and negotiate the best deals. But if they are developing projects also, that is when you need very strong oversight.”
Read the full article from The Boston Globe here.
Massachusetts bill would compel utilities to consider non-wires alternatives
Peter Shattuck, Massachusetts director for the Acadia Center and the Alliance for Clean Energy Solutions, which is supporting the bill, told Microgrid Knowledge that declining cost of solar and efficiency, and the state’s growing interesting battery storage, are fueling an interest in modernization.
“We’re glad to see utilities entering the energy storage market. Eversource, in their rate case, has a significant $100 million of storage proposed across four projects. But there is a clearly a big market for behind-the-meter storage as well,” Shattuck said.
Read the full article from Utility Dive here.
Massachusetts Bills Create New Opportunities for Microgrids, Non-Wires Alternatives
The Alliance for Clean Energy Solutions (ACES), a coalition of environmental and industry groups, discussed the bill and its other legislative priorities in an interview Monday, as it prepares for energy hearings at the state capitol this week.
“The appetite for local energy and microgrids continues to grow in Massachusetts because of declining costs for solar, progress on energy efficiency, and the attention the Baker administration has given to energy storage,” said Peter Shattuck, Massachusetts director for the Acadia Center and ACES co-chair.
The non-wires alternatives proposal is within a new grid modernization bill, H. 1725/S. 1875, that would “reset” a proceeding now before the state Department of Public Utilities, Shattuck said. The legislation puts greater emphasis on modernizing the grid via local energy than does the existing grid modernization docket.
At the same time, the bill would limit how much energy storage a utility or retail supplier could own. Shattuck said that the legislation places emphasis on securing more behind-the-meter – as opposed to utility-scale – energy storage than did last year’s energy storage bill.
“We’re glad to see utilities entering the energy storage market. Eversource, in their rate case, has a significant $100 million of storage proposed across four projects. But there is a clearly a big market for behind the meter storage as well,” Shattuck said.
Among the several green energy proposals, ACES’s top priority for this year is a bill that increases the renewable portfolio standard (RPS) to 40-50 percent by 2030, with annual increases running two to three percent after that. The state’s current RPS requires that 12 percent of electricity come from renewables this year, rising to 15 percent by 2020. RPS requirements benefit microgrids because they create a revenue stream – renewable energy credits – for green energy development. New microgrids often include renewables, solar in particular.
“Given the federal government’s retrograde energy policies, it’s critical that states show a willingness to embrace clean energy solutions,” said Shattuck. “We’re proud of the direction our ACES members have taken in ensuring that Massachusetts remain a leader in the nation’s clean energy future.”
Read the full article from Microgrid Knowledge here.
Northeastern states moving on carbon pricing
Peter Shattuck, director of clean energy initiatives for the regional environmental advocacy group Acadia Center, noted that it was a Republican governor, George Pataki of New York, who proposed RGGI in the face of environmental inaction from President George W. Bush. Four of the region’s original seven RGGI signatories were Republicans.
“In a strange way – this may be one of the silver linings of the Trump administration,” he said. “As he guts every major climate policy that was put in place over the last eight years, there’s a need for governors in the region to step forward and show some leadership.”
Read the full article from Yale Climate Connections here.