Clearing prices for the latest Regional Greenhouse Gas Initiative CO2 allowances auction rose 4%, continuing a recent upward trend while the number of bidders declined.
The 27th auction, held on Wednesday, showed a clearing price of $5.41/ton for the 15.3 million in allowances offered and sold. The auction netted more than $82 million, putting the total proceeds over the $2 billion mark for the nation’s first cap-and-trade program, which has held quarterly auctions since late 2008.
Bids for the CO2 allowances ranged from $2.05 to $12.50 per allowance. The ratio of bids to initial supply was 2.8, up from 2.5 in the December 2014 auction.
The auction proceeds will fund various programs, including energy efficiency, renewable energy, direct bill assistance and greenhouse gas abatement in the nine Northeastern and Mid-Atlantic states participating.
All of the allowances were purchased by compliance entities — electric generators of 25 MW or larger — and their corporate affiliates. Compliance entities and affiliates have purchased 78% of allowances over the history of the auctions.
Auction 26, which offered 18.2 million allowances, cleared at $5.21/ton, generating $95 million.
The 2015 RGGI cap is 88.7 million tons. The RGGI cap declines by 2.5% annually until 2020.
A regulated power plant must hold CO2 allowances equal to its emissions for each three-year control period. RGGI’s third control period began on Jan. 1, 2015, and extends through Dec. 31, 2017.