California carbon trading at $19
California carbon allowances (CCAs) continued to see high prices as regulated emitters position themselves to meet new compliance obligations beginning in January 2013.
CCAs closed at $19 a piece, with 171,000 exchanging hands over the week.
The uncertain future of the San Onofre nuclear power plant, located near San Diego, has bolstered carbon prices for the past few months.
The plant has provided roughly 8% of the state’s electricity with nearly zero carbon emissions, however following the discovery of a radiation leak early this year, the San Onofre plant has ceased operations.
To make up for the lost electric supply, other California fossil fuel power plants have had to increase their production, consequently pushing overall state emissions closer to the mandated cap that goes into effect next year.
With no projected timeline for bringing the nuclear plant back online, state emitters as well as national power traders have been engaging more heavily in carbon trading to ensure they will meet the new regulations.
Carbon offset credits offer an additional avenue to meet California requirements, since regulated utilities will be able to purchase offsets to meet up to 8% of their compliance obligation.
Recently the Sacramento Municipal Utilities Department issued a request for 200,000 carbon offset credits.
Earlier this year another major emitter, Pacific Gas & Electric, requested offers for several hundred thousand carbon offset credits as well.
The interest in carbon offsets approved for use in the California carbon market resulted in an undisclosed number of offsets generated from an agricultural methane project to trade.