skip to main content
Back to all blog posts

Posted in: Ontario | Climate Change / Renewables | Energy Policy

Jun 15, 2017

All Current Allowances Sold at Ontario’s Second Carbon Credit Auction

By David Stevens

On June 14, 2017, the results from Ontario’s second Cap and Trade Program Auction of Greenhouse Gas Allowances were released. All available current allowances were sold at the June 6, 2017 auction, along with more than half of the future allowances available for sale.

The recent auction was the second time that participants in Ontario’s Cap and Trade Program were able to purchase allowances. As we reported earlier, the first auction resulted in the sale of all available 2017 credits, along with almost 1 million 2020 vintage credits. The prices paid were marginally above the Auction Reserve Price. The total proceeds from the first auction were around $472 million.

The results from the June 6, 2017 auction were even stronger than the first auction. In the second auction, all of the 25 million allowances related to the current year (2017) were sold, along with around 1.7 million 2020 vintage allowances (of the 3 million made available for purchase). The “Auction Reserve Price” (the minimum price at which allowances would be sold) was $18.30 (slightly higher than at the first auction) and the “Settlement Price” for current allowances was $18.72 (more than 3% higher than at the first auction).

As we have discussed (see here, here and here), the Ontario government plans to fund its Climate Change Action Plan with the proceeds from the sale of allowances. The proceeds from the second auction total more than $500 million, meaning that almost $1 billion has been raised from the first two auctions. The Ministry of the Environment and Climate Change news release announcing the results of the second auction emphasizes that all auction proceed (earlier forecast at around $1.8 billion per year) will be invested in programs under the Climate Change Action Plan to reduce emissions.

Ontario will hold four Cap and Trade Program Auctions of Greenhouse Gas Allowances during 2017. The next auction date has not been published, but it is expected to happen around September.

Related Blogs

Posted in: Consumer Protection | Ontario | Ratemaking | Energy Policy

Insights EnergyInsider
OEB Announces New Electricity Prices to Reflect the Fair Hydro Plan By David Stevens Jun 23, 2017 On June 22, 2017, the Ontario Energy Board announced new electricity prices that are intended to implement the promised 25% bill reduction from the Ontario Government’s Fair Hydro Plan.1 For most consumers, the impact will be seen in the form of reduced Regulated Price Plan (RPP) electricit...

Posted in: Ontario | Ratemaking | Consumer Protection | Energy Policy

Insights EnergyInsider
Regulations Published to Implement Ontario's Fair Hydro Plan By David Stevens Jun 22, 2017 On May 31, 2017, the Ontario Government passed Bill 132, which is intended to implement the Government’s promised Fair Hydro Plan (discussed in earlier posts, here, here and here). The main part of Bill 132 is the Ontario Fair Hydro Plan Act, 2017, which is included as Schedule I and is ref...

Posted in: Ontario | Energy Policy | Consumer Protection

Insights EnergyInsider
OEB Provides First Look at Proposed New Cyber Security Framework By Gaurav Gopinath and David Stevens Jun 16, 2017 In December 2015, the lights blinked out across multiple provinces in the Ivano-Frankivsk region of Ukraine. Nearly a quarter of a million people lost power. Shortly after power was restored, Ukraine’s Computer Emergency Response Team announced they had identified the root cause: a cyberatt...