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Seasonal nitrogen oxide price indications edge higher

Emissions allowances prices under the Cross-State Air Pollution Rule were again flat to stronger, with seasonal nitrogen oxide values moving higher.

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As of Dec. 22, seasonal nitrogen oxide, or NOx, allowances for 2017 edged up to a bid-and-ask range of $150 to $200, from a level of $140 to $200 a week ago. Cross-State Air Pollution Rule, or CSAPR, seasonal NOx allowances for 2018 ran in a bid-and-offer spread of $125 to $200, rising from a prior weekly level of $115 to $200.

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In May, CSAPR 2017 seasonal NOx prices rallied above $700 after buyers began to hedge ozone season emissions ahead of the peak summer cooling season. But an overall mild summer in many regions of the country, particularly the Northeast, led to tepid interest, which offered pressure to seasonal NOx allowance prices in September and October.

CSAPR 2017 annual NOx allowances held firm in a bid-and-ask range of $1 to $3.

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CSAPR 2017 Group 1 sulfur dioxide, or SO2, allowances were also steady during the week ended Dec. 22, holding at a level between 25 cents and $4. CSAPR 2017 Group 2 SO2 allowance price indications remained in a bid-and-ask range of 25 cents to $5.

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NJ solar RECs continue to climb despite ample supply

During the week ended Dec. 22, solar renewable energy credit prices in New Jersey notched higher once again. Garden State energy year 2018 SRECs posted an average at $208.58/MWh, while energy year 2019 SRECs were assessed at an index of $205.08/MWh, rising 75 cents and more than $2.00, respectively, on the week.

New Jersey SREC prices saw additional gains despite ample supply in the state. As of Nov. 30, New Jersey had installed a cumulative total of 2,326.7 MW of solar capacity, according to data from the New Jersey Office of Clean Energy.

New Jersey class I REC prices were firm ahead of the holiday weekend. New Jersey vintage 2018 class I REC values were unchanged at an index of $5.41/MWh, while vintage 2019 class I RECs were priced at $6.33/MWh.

In the Pennsylvania market, tier I REC prices edged up during the period under review. Vintage 2018 tier I RECs were up 2 cents on the week to an average at $5.15/MWh.

Solar markets in Pennsylvania advanced during the week ended Dec. 22. In the Keystone State, SRECs for reporting year 2018 were priced at an index of $12.75/MWh, up almost $5 on the week. SRECs for reporting year 2019 in Pennsylvania came in at an average of $10.05/MWh.

In early November, Pennsylvania Gov. Tom Wolf signed into law a bill aimed at boosting the value of renewable energy credits from solar resources by tying the credits to solar sources located in the state. H.B. 118 allows only solar projects in the state to count toward its solar target and removes eligibility from out-of-state projects that interconnect to the same regional grid. Previously, legislation allowed SRECs to be generated by a source anywhere within the PJM Interconnection region, which led to ample supply and sluggish prices.

"The [Pennsylvania] Public Utilities Commission (PUC) will be determining whether or not to grandfather and protect certain out-of-state facilities already certified under the [Alternative Energy Portfolio Standard]. At present, it is unclear what the outcome or timeline of this decision will be. Given the nuances of the law, it is possible that facilities that have existing SREC contracts in place will be allowed to maintain their PA SREC eligibility. This decision will naturally have a large impact on certified capacity in the PA SREC market," according to a recent post from SRECTrade.

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