Emissions Trading / Carbon Market News (2018-08-28)

Dear Sir or Madam,

The German Federal Minister of Economics, Peter Altmaier, is currently on his way to push ahead with the expansion of the power lines that are to bring northern German wind energy to southern Germany. This is a sensible undertaking, because last year 38% of the energy produced in Germany came from renewable sources, but only about 12% of this was used because the lines to the south do not yet exist. This alone cost Tennet, the largest network operator in northern Germany, just under a billion euros in 2017, as the excess grid capacities had to be sold at a negative electricity price, which is ultimately passed on to the consumer.

According to plans, sufficient line capacities will not be available until 2025 to transport the wind power generated from the north to the south of Germany. Until then, several billion euros will probably still be spent on foreign countries purchasing our surplus quantities of electricity.

And once again this year the share of renewable energies has risen sharply. In the first half of 2018, 117 billion kilowatt hours were generated, another 10% more than in 2017. The German government’s goal of achieving at least 65% of energy generation through renewables by 2030 thus seems achievable.

In 2011, the nuclear catastrophe occurred in Fukushima, Japan. After German Chancellor Angela Merkel hastily and unexpectedly decided that German nuclear power plants would be taken off the grid in a few years, the prices for European emission certificates rose significantly and reached a temporary high of EUR 18.18 in June 2011. On Tuesday, the EUA stopped precisely this resistance, but exceeded it the next day to record a new 10-year high of EUR 18.28 per EUA. If the bullish price trend continues in September with a normal auction volume, a rise above the 20-euro mark would not come as a surprise.

On the other hand, the global economic risks that can have a significant impact on the European economy should not be ignored on the fundamental side either.

A sensible side effect of the current price increase is that electricity producers are increasingly switching from coal-fired power generation to gas, as gas electricity only generates half as much CO2 as coal-fired electricity.


(Average Quotes Exchange / OTC)
Instrument 2018-08-10 2018-08-17 Change
EUA (Spotmarket) 17.87 EUR 17.87 EUR +0.23 EUR
EUA (December-2018-Future) 17.89 EUR 17.89 EUR +0.25 EUR
CER (Spotmarket) 0.27 EUR 0.27 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 72.90 USD 72.90 USD -1.17 USD
EURO (Currency, Forex) 1.1409 USD 1.1409 USD +0.0028 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

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With kind regards,

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