“uåX˜äŠÊ˜·³Ç

Over the past quarter there has been little change in the green certificate markets other than in the UK and US. In the UK flat prices for renewable obligation certificates (ROCs) have returned, a result of two events. First, auction of ROCs generated under existing Scottish Renewables Obligation (SRO) contracts cleared at an average price of £45.93 -- a much needed benchmark price, encouraging players to bring flat prices per certificate back in the market. Secondly, the first full cycle of the national Renewables Obligation (RO) is complete. As anticipated, the failure of ailing TXU to provide its share of money into the RO's buy-out fund brought the England and Wales recycle payments down by approximately £4 per certificate.

The average traded price for ROCs of vintage CP2 (the second compliance period) has been around £46.00 per certificate. This is approximately £2 lower than CP2 ROC prices shown in the market prior to the TXU fiasco -- and over £10 away from the theoretical value of the recycle value for the second period. To this end, innovative structures whereby the risk and price reward can be shared between buyer and seller remain in the marketplace.

In the US markets with green certificate mandates there has been little trading activity of renewable energy certificates (RECs) generated in 2003. This is largely due to a recent ruling by the US Federal Energy Regulatory Commission which passed decisions on ownership of RECs from qualifying facilities under Public Utility Regulatory Policy Act contracts to state agencies. This has created ownership uncertainty and a conservative approach towards trading the RECs associated with these facilities. In the Pennsylvania-Jersey-Massachusetts grid region, where trading is driven by New Jersey's interim Renewables Portfolio Standard (RPS), trading has been even slower due to the delayed development of the REC register. Participants are also awaiting the final draft of the RPS. A supply shortage in the New England Power Pool has made an impact. Supply shortage in the forward markets means prices for certificates of Vintage 04 in the Massachusetts and Connecticut Class I markets have been rallying close to the price cap: $50.00 and $55.00, respectively.