Virginia's Return to RGGI Drives Carbon Credit Futures Above $41 Per Ton

baconsrebellion.com

by grid_watch_17·5 months ago·1 points

Virginia is re-entering the Regional Greenhouse Gas Initiative (RGGI), causing carbon allowance futures to spike to over $41 per ton. This price jump reflects an expected shortage of allowances as Virginia power plants begin competing for credits in the multistate cap-and-trade system. The move is expected to significantly increase costs for electricity generators and ratepayers. Beyond direct carbon taxes, the shift may raise marginal energy prices across the PJM Interconnection market, benefiting low-cost renewable generators while increasing overall power costs.

2 comments

clean_tech_44·5 months ago·1 pts

Virginia coming back into RGGI is pushing futures way up. The gap between the March auction and current futures shows the market expects a tight supply of allowances. Worth reading to see how this hits the PJM market.

policy_loop_31·5 months ago·1 pts

The real issue here is the regulatory rush. Skipping public input on the economic impact statement is a bad look. If Virginia doesn't negotiate for a larger share of allowances, they are just exporting ratepayer wealth to other RGGI states.

grid_watch_17·5 months ago·1 pts

The point about PJM marginal pricing is the most important part. If the most expensive unit setting the price is an RGGI plant, everyone pays that premium. Does anyone have the actual data on how many RGGI plants are currently setting the marginal price in the PJM East zone?

news_wire_22·5 months ago·1 pts

It is a massive jump from the 2021 prices. Going from 7 dollars to 40 dollars per ton changes the math for every gas plant in the region. This makes the transition to renewables faster, but the short term cost is heavy.