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North American
Environmental
Markets Service
(N.A. EMS) |
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North American Environmental
Markets Service |
What is the Cost of “Clean
Energy”?
A Retainer Service
Providing Comprehensive Analysis
of North American NOx, SO2,
Mercury, CO2 and Renewables,
Assessing the Impact on Current
and Prospective Allowance/Credit
Prices, Energy Markets and
Assets
Launch
prospectus
in PDF
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OVERVIEW
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Environmental standards and requirements affect the bottom
line of virtually every energy player in North America.
Increasingly, regulators are using market-based mechanisms
such as emissions “budgets” and renewable energy credit
trading to achieve their objectives, thereby putting
explicit values on “clean energy.” The availability and
pricing of allowances, offsets, credits and RECs directly
influence prices of electricity, coal, natural gas, fuel
oil, and energy transportation services. The growing
intensity of policy concerns regarding climate change is
prompting consideration of measures that will reach far
beyond the scope of current emissions markets with several
regional efforts (involving a number of U.S. states and
Canadian provinces) already taking the lead in this
direction. With a new, more activist U.S. administration and
Congress, policy measures are coming sooner rather than
later. The current and emerging environmental market
policies are impacting investments in power plants, energy
production, transportation and marketing initiatives. They
directly affect the operating costs of major energy
consumers, producers, service providers and, increasingly,
consumer transportation options and choices.
The potential for huge shifts in energy costs and asset
valuations has never been greater, given the vast array of
technology options under consideration and regional,
national, and international environmental regulations and
compliance alternatives under consideration or in
litigation. As such, those firms that have in-depth
understanding of these markets will have a distinct
advantage over their competitors.
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PIRA’s North American Environmental Markets Service (N.A.
EMS) gives clients both the big picture — for perspective on
significant long-term emissions market developments — as
well as up-to-date, detailed data and analysis needed to
make informed near-term decisions. PIRA examines the
forces that affect the U.S. acid rain, fine particulate and
ozone-related markets (i.e. NOx and SO2) as well as emerging
controls and markets for mercury and greenhouse gases. The
development of U.S. and Canadian greenhouse gas regulations
and markets are covered in detail in order to provide a
sense of the environmental pressures on existing and future
emitters. Although not currently subject to cap-and-trade
programs, greenhouse policy developments regarding the
transportation sector are also assessed in view of their
potentially strong impact on oil industry operations and
strategies. Policies and markets promoting renewables have
joined the suite of market-based approaches encouraging
“clean energy,” and these are also addressed in this
context.
Clients of N.A. EMS benefit from:
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- Near- and long-term emissions price forecasts.
These assessments draw upon the experience of PIRA’s
consultants and on research and insight into market
fundamentals.
- Assessment of renewable power development.
New renewable capacity is facing numerous incentives,
but also significant hurdles. PIRA’s assesses the costs
of different technology — both for developers and for
the power sector — and analyzes the likely penetration
renewable generation.
- Comprehensive analysis of current and
prospective legislative and regulatory developments
on the national, regional and local level.
- Examination of NOx/SO2 compliance issues,
including the Acid Rain Program, SIP Call/Ozone, CAIR,
Regional Haze, NSR, PSD and others.
- Monitoring and analysis of trends in
emissions performance at the plant level,
including the installation of controls technology and
performance, and the implications for meeting current
and proposed regulations. Clients have access upon
request to special databases, including detailed
compilations of installed and planned scrubber and SCR
units developed for this purpose.
- Economic analysis of compliance choices,
including fuel switching, long-term technology options,
credit purchases, etc.
- Skilled assessments of the impact of
potential policy scenarios.
- Special reports highlighting issues related
to current and prospective business strategies, risks
and opportunities.
- Non-partisan coverage of the evolving
political, social and business reactions to the
issues.
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COMPONENTS OF N.A. EMS
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Clients of PIRA’s N.A. EMS benefit from the following
“deliverables”:
1. North American GHG Quarterly Update
While the U.S. has not ratified Kyoto there are continued
domestic and regional developments in regulating GHG.
Northeastern U.S. states have implemented a cap on power
sector CO2 emissions, while California has committed to
significantly reduce GHG and is actively developing policies
impacting both power generation and transport to achieve its
goals. On a federal level, options for national programs are
being discussed, and the choices made can have serious
implications for market players. Canada has ratified Kyoto
but given strong trends favoring rising emissions, faces
particular challenges in designing and implementing policies
to achieve reduction goals. Understanding evolving policies
at a national and provincial level and timely assessment of
these developments can help inform, prepare and shape
industry responses to potential new markets and regulations.
2. North American SO2/NOx Quarterly Update
Quarterly assessments of the SO2 and NOx markets, generally
following the release of the EPA CEMs data, analyzing the
most recent trends in generation, emissions, weather, fuel
use, control equipment and related fundamental factors
driving the markets.
3.
U.S. SO2 Scorecard
Released in the intervening two months between the North
American SO2/NOx Quarterly Updates, this report
summarizes and assesses market influences affecting the SO2
market in an easy-to-read grid. The Scorecard also
features updated charts depicting key market fundamentals,
including fuel prices, the implied sulfur premium, and
allowance holdings by non-compliance players.
4. North American EMS Special Reports
In-depth reports that provide analysis on significant
current and anticipated environmental issues, market
conditions, control technology advances and regulatory
developments for renewables as well as SO2, NOx, mercury and
CO2 regulations — and how they could impact your business.
5. North American EMS Bulletins
These one-off reports provide analytic briefs on timely
issues confronting North American environmental markets.
Unexpected shifts in supply-and-demand fundamentals require
timely review to ensure an accurate assessment of emissions
markets going forward. Such shifts can be policy-related or
they could involve factors such as extreme weather or sudden
movements in the fuel markets, which may lead PIRA to update
our views.
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The Energy Price Portal
All of PIRA’s price forecasts and histories are available
through this single, dynamic interface. Via PIRA Online,
N.A. EMS clients get easy access to prices for:
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- CAIR NOx Annual and Successor
- SIP Call NOx Seasonal
- Title IV SO2 and Successor
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- RGGI CO2
- WCI CO2
- U.S. Federal CO2
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7.
North American EMS Statistics
Clients have access to up-to-date emissions-related data by
request, including:
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- Current and historically reported annual and quarterly
CEMS data.
- Scrubber (SO2) and SCR (NOx) retrofit databases —
compiling announcements of these installations at the
unit level, including expected online dates and
resultant emissions reductions.
- Scrubber and SCR control cost calculators.
- Other statistics related to the implementation of
environmental policy, such as trading budgets,
individual-state SIPs, etc.
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8. Access to PIRA Staff
Phone and email access to PIRA’s staff allows clients to
obtain quality analytical support on the latest developments
in short-term supply and demand or request research on
special topics with a quick turnaround. Clients can also
arrange for conference calls with our market analysts.
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FEES
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The annual fee for PIRA’s N.A. Environmental Markets Service
is $14,000 for up to 10 users located at one client site;
discounts are available for existing clients to
certain PIRA services, including the
Greenhouse
Gas Emissions Service.
Click here for more information on how to become a client to
EMS.
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WHO CAN
BENEFIT FROM N.A. EMS
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Electric Generating Companies and Industrial End-Users
Both groups are the current and obvious future targets of
all major acid rain, ozone, particulates, mercury, and
global warming initiatives. They face the most pressing
decisions regarding compliance strategies and credit
portfolio management. To safeguard their competitive
positions, they must understand the implications of evolving
policies on fuel, operating and investment costs, and the
operations and prices of emissions credit markets. The close
association between PIRA’s Environmental and Electric Power
groups ensures that the products meet these users’ business
needs.
Energy Transmission and Storage Companies
Pipelines, railroads, truck and barge companies, ocean
freight companies, and electric transmission companies that
anticipate short- and medium-term shifts in environmental
requirements and compliance costs will have a strategic
advantage when setting pricing strategies, valuating
existing assets, targeting potential acquisitions and
planning expansions.
Coal, Oil and Gas Producers and Refiners
Current and prospective regulations and credit prices
significantly impact prospective national — and especially
regional — markets for these fuels. In certain cases,
producers will also see direct effects of regulations — and
potential opportunities arising from them. These
considerations will be important elements in targeting
exploration and production regions and in increasing
profitability. As large stationary source emitters,
refineries are impacted by the expanding scope of emissions
regulations. Moreover, refinery economics will be impacted
by emerging greenhouse policies targeting the transportation
sector, the refining industry’s most critical market.
Marketers and Traders
Electricity, coal, and gas marketers need to be fully
informed about the compliance implications for fuel choice,
as well as for credit pricing and management facing their
customers, in order to formulate their own near- and
long-term strategies.
Environmental Agencies
Such agencies will find an independent analysis of
private-sector compliance strategies, progress and costs —
as well as the workings of national and local emissions
credit markets — invaluable in assessing the impacts of
current and prospective regulatory actions.
Financial Institutions
AAs banks are called upon to provide debt for new energy
projects, it will be imperative to analyze accurately both
the market and regulatory environment for these new
projects. Environmental regulation is becoming more complex
and imposing its own set of constraints, costs, and
opportunities for investors in electric generation and
related facilities. Understanding regional markets, growth
potential, infrastructure constraints, and implications of
environmental regulations will be essential for due
diligence.
Equipment Manufacturers and Contractors
Turbine manufacturers, EPC (engineering, procurement, and
construction) contractors, environmental equipment makers,
and catalyst suppliers can all benefit from a better
understanding of current and prospective compliance choices
facing their customers. In addition, vehicle manufacturers
are on the front lines of emerging greenhouse policies.
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THE NORTH AMERICAN EMISSIONS GROUP
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Roman Kramarchuk (Managing
Director, Emissions and Clean Energy) heads up N.A. EMS
and PIRA's Greenhouse Gas Emissions Service,
which includes coverage of the Kyoto credit markets and the
European Emissions Trading System. Prior to joining PIRA, he
was extensively involved in the development of the CAIR and
CAMR (mercury) Rules and the BART Guidelines with the U.S.
EPA’s Clean Air Markets Division. Working at PG&E NEG and
with PA Consulting / PHB Hagler Bailly, he evaluated
strategies regarding power sector fuel choice, allowance
purchases and capital investments in pollution control
equipment and advised on plant development/acquisition and
asset valuation. Mr. Kramarchuk also spent several years
working on USAID- and World Bank-funded projects to develop
power markets, market rules and regulatory capacity
overseas. He has a MPP from the Kennedy School of Government
at Harvard and a BA in economics and BSE in systems
engineering from the University of Pennsylvania.
Ronald B. Gold (Senior
Director,
North American Emissions Group) is an International
Energy Economist with broad experience in analyzing energy,
economic, and environmental trends. In addition to his work
for PIRA, through 2006, Dr. Gold served as Vice President of
the Petroleum Industry Research Foundation, writing
extensively on U.S. energy policy issues. Dr. Gold retired
from Exxon at the end of 1997, where he was Company
Economist and Manager of the Energy Outlook Division for
Exxon Company International. Earlier in his career, he
worked for the U.S. Treasury Department, Office of Tax
Analysis, and was also an assistant professor of economics
at Ohio State University. Dr. Gold received his
undergraduate degree from Brooklyn College, City University
of New York, and his M.A. and Ph.D. in economics from
Princeton University.
Allan M. Stewart (Executive Director, Electric Power Group)
is responsible for the preparation of a comprehensive series
of commercially oriented assessments of
North American electricity markets
as well as data and analysis of the primary drivers of
emissions credit prices. Prior to joining PIRA, Mr. Stewart
worked with the Consolidated Edison Co. of New York in a
variety of senior positions. He received his undergraduate
degree in Civil Engineering from the State University of New
York at Buffalo and an MBA from Adelphi University.
Jennifer McIsaac
(Associate Director, Emissions) joined PIRA after a
stint with NUI Corp. There she analyzed gas supply needs and
recommended baseload/swing purchases and storage
injections/withdrawals. Prior to that, while pursuing her
undergraduate and graduate degrees, she was an economics
research intern in Exxon Company International's Corporate
Planning Department, where among many tasks she analyzed
emissions in the transportation and power generation
sectors. She holds a BA from Drew University and is a
doctoral candidate in economics at Cornell University.
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For more information:
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Please contact PIRA at 1-212-686-6808,
sales@pira.com.
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