Can one of my European readers help with a currency conversion? How does Euros per MWh translate into dollars per ton of carbon? The context:
RWE will proceed with the construction of two, 1,530 MW coal-fired plants in Germany, believing that the units will make money even if carbon dioxide costs of up to Eur30.00/MWh are included, company CEO Harry Roels said in a conference call late Wednesday.
I have no idea if this is good news or not.
Quoting carbon costs in Eur/MWh seems a little odd, but it’s roughly the same as Eur/tonne (coal-fired stations produce 900-1,100 kgCO2/MWh).
So at current conversion rates 30 Eur/KWh is equivalent to roughly 44$/ton.
Carbon trading is a complicated business. It was trading at about 30 Eur/tonne in April last year but the price crashed when it was discovered that we had more credits in circulation than we actually needed. The spot price is now below one euro, but with phase II of the ETS scheme kicking in next year the price for credits for 2008 delivery is now back up above 20 euros again.
Hope that helps.
Basically I think what RWE are saying is that their new stations will be profitable even if they have to buy credits at 30 Eur/tonne, which doesn’t sound like terribly good news to me (in terms of emissions).
A recovery in the carbon credit price will also probably filter through as higher prices to the consumer. I’m currently paying £0.11 (about $0.22) per KWh, a bit more than the UK average (one of the few penalties for living in rural Scotland), but I believe quite a lot more than you pay in the USA. Apart from Hawaii, maybe.