Climate Change, Global Warming, Weather Derivatives, Investi Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Climate Change, Global Warming, Weather Derivatives, Investi

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Sam Citron	2/2/2006 10:32:21 AM
	of 442

Surging Europe emissions market set for more gains [Reuters] Thu Feb 2, 2006 10:15 AM ET By Stuart Penson - Analysis LONDON (Reuters) - European carbon emissions prices charged higher on Thursday and traders said more gains looked likely as the market eyed record peaks touched last summer. Cold weather and bullish fuel markets sparked renewed buying, especially by power companies, which drove the market to six-and-a-half month highs and stretched its gains since the turn of the year to 25 percent. "The market's gunning for 30 euros (a tonne), that's the next big level," said a UK-based trader for a power utility. "There's a general feeling now that this market's going higher." Emissions allowances for delivery in December this year gained 75 cents to 28 euros a tonne. In July last year, prices peaked at just below 30 euros. Traders cited rallying prices for oil, electricity in Germany, Europe's biggest power market, and strong prices in the bloc's biggest gas market UK, as drivers of Thursday's rally. "Oil markets are up and so is German power and gas in the UK -- CO2 is stronger in line with the energy complex," said Gilles Corre, a broker at Evolution Markets in London. Deutsche Bank says CO2 prices could go all the way to 40 euros a tonne, the point at which power generators in the UK would consider switching fuels to gas, reducing demand for CO2 allowances. Britain has more scope than the rest of Europe to switch between coal and gas, which means it may emerge as a price-setter in the CO2 market. The bank wrote in a recent research note: "2006 could see a severe spike in carbon and hence power prices." UBS analyst Per Lekander has forecast average prices in the period (2005-2007) of 35-40 euros. NEW MARKET CO2 trades in Europe under a scheme launched a year ago to help curb heat-trapping greenhouse gas emissions and meet the bloc's Kyoto Protocol targets. The scheme imposes caps on emissions from thousands of industrial sites. Firms can buy and sell CO2 allowances but by the end of each year they must hold enough of them to cover every tonne of CO2 pumped out by their plants. Power stations, the biggest industrial emitters of CO2, face the toughest caps. Utilities' need for allowances changes by the hour in line with shifts in power demand and the relative costs of burning coal -- which is dirtier and requires more CO2 allowances -- or cleaner but more expensive gas. Czech utility CEZ said it may buy extra CO2 allowances this year after cold weather forced up power demand and encouraged it to run its stations at full throttle.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next