In the Regional Greenhouse Gas Initiative’s (RGGI) eighth auction of CO2 credits on June 9th, the clearing prices were the lowest yet – $1.88 for 2009-2011 credits and the auction floor of $1.86 for 2012-2014 allowances. Despite these low prices, the auctions still brought in some $80 million. In total, cumulative RGGI proceeds to be used by the 10 participating states for renewable energy, energy efficiency and low-income energy assistance programs now total $662.8 million.
RGGI’s announcement of the auction results highlights some of the specific programs in which the states have invested, and the returns we are already seeing from these investments. For example, in Connecticut, electric and gas energy efficiency programs, funded in part by RGGI proceeds, are producing more than $4 for every $1 invested. New York reports a return greater than 8 to 1 for its investments in renewable energy systems. And the predictions are even larger: Massachusetts reports that energy efficiency programs, funded in part by RGGI, will generate roughly $6 billion in consumer energy savings in Massachusetts over the next 3 years.
On the whole, the RGGI states are investing around 60% of the proceeds from the auctions in energy efficiency. Energy efficiency measures such as building retrofits, heating system replacements and appliance upgrades are predicted to shave 20 to 30% off consumers’ utility bills over the next few years. States are also investing in large-scale renewable energy development as well as programs to deploy distributed generation, such as solar energy and hot water systems on homes, schools, and businesses.
Although participation and prices were both down for this second auction of 2010, all 2010 vintage and 2013 vintage allowances available for purchase were sold – a change from the previous two auctions, in which supply for allowances to be used in the 2012-2014 compliance period outpaced demand. Perhaps due to the drop in the number of entities participating, electric generators subject to RGGI purchased 92% of the 2010 vintage allowances – up from 85% in March’s auction – and 100% of the 2013 vintage allowances.