On September 6th, 2017, Ontario held the third Cap and Trade Auction of the year. Previous auctions have shown mixed results with participants showing hesitation in buying Future 2020 Vintage Allowances. This hesitation was due to uncertainty in the new program. This uncertainty has vanished as the September Auction shows all 25 million plus Current 2017 Vintage Allowances, as well as all 3 million plus Future Allowances, were sold. This change in opinion may be coming from confidence in the program is it continued into its 3rd auction combined with a strong Federal and Provincial stance on Greenhouse Gas emissions and an increasing societal shift towards environmental sustainability.
The Allowances were sold at $18.56 which is $1.77 above the floor price. This also reflects an increase in demand and participation in the auction as the previous auctions in March and June sold for $0.01 and $0.42, respectively, above the floor price.
The Government of Ontario has not wasted any time in reinvesting the proceeds from the Cap and Trade. On August 30th, 2017, Ontario announced $377 million for the Green Ontario Fund on top of its previous funding announcements. The Cap and Trade Auction is expected to increase residents bills by approx $13 per month and a higher increase can be expected for businesses in Ontario. However with Ontario reinvesting in energy efficiency and reduction now is the time to consult with a Certified Energy Manager to see what options are available for your business and get in on these government programs to reap the rewards of these auctions.
Contact Canadian Energy Strategies Inc for information or to book a meeting with an in-house Certified Energy Manager.
The full auction report can be found here.