Exelon Illinois plants get new nuclear incentives

Market: Electricity, Emissions
03/12/21

Illinois regulators have awarded three Exelon generating stations new incentives deigned to support the state's nuclear power plants.

The Illinois Commerce Commission on 2 December approved the first ever procurement of carbon mitigation credits (CMCs), created when the state recently overhauled its energy policies.

Winning bids went to the 2,389MW Braidwood station, the 2,500MW Byron plant and the 1,800MW Dresden facility, all of which are owned by Chicago-based utility Exelon. The credit delivery period will run from 1 June 2022 to 31 May 2027, with the state awarding roughly 54.5mn CMCs/yr.

The program is funded by a surcharge leveled on bills of Exelon subsidiary Commonwealth Edison's customers.

The Illinois Power Agency (IPA), which handles both CMCs and renewable energy certificates (RECs) on behalf of the state, held the actual procurement on 23 November.

Illinois limits the maximum bid price that nuclear facilities could submit to the IPA procurement to protect ratepayers from escalating costs. The ceiling begins at $30.30/MWh during the 2022-23 delivery year and rises over the course of the procurement window, maxing out at $34.50/MWh during the 2026-27 delivery year.

The CMCs, which are tradeable, represent the environmental benefits of the zero-emissions nuclear power plants. The actual value of the credits can vary from month to month, as the state subtracts factors like indexed energy prices and federal subsidies from the baseline value of the bids. As a consequence, the payments to winning facilities will reflect market conditions, and could result in a credit to ratepayers if market revenues exceed the baseline cost cap.

Governor JB Pritzker (D) and state lawmakers included the CMC program in a sweeping clean energy bill enacted in September after Exelon warned it would close the Byron and Dresden stations this year without legislative support.

Nuclear provides around 58pc of Illinois' generation and most of its carbon-free power. Without that electricity in the mix, lawmakers feared the state would be unable to lift its clean energy target to 100pc by 2050.

The CMC incentive ends in 2028.

Illinois also has a separate zero-emissions certificate program to help keep other nuclear plants on line, having awarded contracts to Exelon's Quad Cities and Clinton stations.

IPA also is working on a new, long-term procurement plan to help the state meet its renewable portfolio standard, which now peaks at 50pc of the state's electricity by 2040.

By Patrick Zemanek

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09/05/25

White House ends use of carbon cost

Washington, 9 May (Argus) — The US is ending its use of a metric for estimating the economic damages from greenhouse gas (GHG) emissions, the latest reversal of climate change policies supported by President Donald Trump's predecessors. The White House Office of Management and Budget (OMB) this week directed federal agencies to stop using the social cost of carbon as part of any regulatory or decision-making practices, except in cases where it is required by law, citing the need "remove any barriers put in place by previous administrations" that restrict the ability of the US to get the most benefit "from our abundant natural resources". "Under this guidance, the circumstances where agencies will need to engage in monetized greenhouse gas emission analysis will be few to none," OMB said in a 5 May memo to federal agencies. In cases where such an analysis is required by law, agencies should limit their work "to the minimum consideration required" and address only the domestic effects, unless required by law. OMB said these steps are needed to ensure sound regulatory decisions and avoid misleading the public because the uncertainties of such analyses "are too great". The budget office issued the guidance in response to an executive order Trump issued on his first day in office, which also disbanded an interagency working group on the social cost of carbon and called for faster permitting for domestic oil and gas production and the termination of various orders issued by former president Joe Biden related to combating climate change. The metric, first established by the administration of former US president Barack Obama, has been subject to a tug of war between Democrats and Republicans. Trump, in his first term, slashed the value of the social cost of carbon, a move Biden later reversed . Biden then directed agencies to fold the metric into their procurement processes and environmental reviews. The US began relying on the cost estimate in 2010, offering a way to estimate the full costs and benefits of climate-related regulations. The Biden administration estimated the global cost of emitting CO2 at $120-$340/metric tonne and included it in rules related to cars, trucks, residential appliances, ozone standards, methane emission rules, refineries and federal oil and gas leases. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Carbon credit method may limit Australia's ACCU supply

09/05/25

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09/05/25

Carbon credit method may limit Australia's ACCU supply

Sydney, 9 May (Argus) — A potentially ineffective design of the long-delayed Integrated Farm and Land Management (IFLM) method developed by the Australian federal government might exclude thousands of landowners from the Australian Carbon Credit Unit (ACCU) market, curbing potential supply, industry participants have warned. The IFLM method, the first in Australia to combine multiple activities that store carbon in soil and vegetation in a single method , could be potentially set with a "binary framework" classifying land types as either cleared or uncleared, following a recent update from the Department of Climate Change, Energy, the Environment and Water (DCCEEW). But focusing on a single binary factor misses a broad range of other important influences, such as fire, over grazing, soil disturbance, feral animal impacts and climate events, co-chief executive of carbon project developer Climate Friendly, Skye Glenday, told Argus . It would particularly affect rangeland areas which cover around 70pc of Australia and include a large proportion of the Indigenous Estate, she added. The cleared/uncleared definition overlooks large areas of degraded land in Australia and is "not helpful" in understanding why the land is in that condition, carbon developer Australian Integrated Carbon (Ai Carbon) chief executive Adam Townley told delegates this week at lobby group Carbon Market Institute (CMI)'s Carbon Farming Industry Forum in New South Wales. A narrow definition of cleared and uncleared land effectively locks out large portions of the carbon market, decimating Western Australia, South Australia and the Northern Territory, Townley said. A CMI taskforce led by Glenday and Townley is recommending that the DCCEEW instead use the Vegetation Assets, States and Transitions (VAST) framework, which is already used by the Australian government to classify and report on the condition of native vegetation in its flagship State of Environment reports. This condition-based approach would allow developers to establish projects in large areas of existing native vegetation that are significantly degraded because of Australia's land-use history, but which still have forests and woodlands, according to the taskforce. The projects would then be able to restore health and increase carbon storage within these areas, the taskforce claims. Transition potential The right framework could incentivise between two-thirds and three-quarters of the registered land projects in eligible methods to transition to the future IFLM method, according to Glenday. Eligible methods would start with the key human-induced regeneration (HIR) ACCU method, which expired on 30 September 2023, as well as the Environmental Plantings (EP) and soil carbon methods. There are around 2,000 land-based projects registered, with about 400-500 in HIR, 50-100 in environmental plantings, and around 700 or more in soil. The number of projects that will transition will likely depend on the final transition rules and the package of activities each land manager wants to undertake, Glenday told Argus . Carbon developer Regenco will explore the potential of migrating all its HIR projects into the IFLM method, managing director and chief executive Greg Noonan told Argus on the sidelines of the CMI event. Transitioning to the new method would allow existing projects to have much larger land areas accountable for carbon sequestration, compared with around just 20pc on average under the HIR method, although decisions would depend on the additional ACCU generation potential for each project to compensate for migrating costs, Noonan said. Some developers said they will also consider transitioning their projects, but others expressed frustration and scepticism over the timeframe and final determination of the method, which was first proposed in 2019. There is a clear urgency in discussing new ACCU methods under consideration to address a current shortfall in availability of land-based methods that is restricting industry investment and engagement, CMI chief executive John Connor said. But delegates welcomed the policy certainty provided by the re-election of the Labor government , he added. "We're very hopeful that the IFLM method is legislated this year, and that's what we're working towards with all the stakeholders," Glenday said. But it would take at least up to nearly three years for the first IFLM projects to go from implementation to first ACCU issuances, she added. ACCU generic, generic (No AD) and HIR spot prices ended the week to 9 May at A$35 ($22.50), dropping slightly from a week earlier as the market failed to receive a boost from the Labor party's re-election. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australian firms flag coal phase-out timeline concerns

09/05/25

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09/05/25

Australian firms flag coal phase-out timeline concerns

Sydney, 9 May (Argus) — Energy utilities raised concerns that Australia's coal-fired power generation phase-out might be running on an unrealistic timeline, according to submissions to the National Electricity Market (NEM) review consultation process. Utilities AGL Energy, Alinta Energy, Delta Energy, Energy Australia, Origin Energy and Stanwell — which operate 10 of the 20 coal-fired power plants in Australia (see table) — submitted separate recommendations to the consultation launched late last year looking at wholesale market settings. This came after the conclusion of the Capacity Investment Scheme (CIS) tenders in 2027, and as Australia transitions to more renewables from its aging coal-fired plants. The Australian Energy Market Operator (Aemo) forecast the country will exit all coal-fired generation by 2038 in its Integrated System Plan (ISP) published in 2024. But Delta Energy predicts that this timeline will not be met, and views ISP's priority as emissions reduction targets rather than a realistic timeline. Insufficient capacity to replace the coal plants was a common issue flagged by these companies, with AGL saying this is partly because of uncertainty in the market leading to less investments. The utility plans to close all its coal plants by the end of June 2035. AGL was Australia's largest emitter of greenhouse gas emissions in the 2024 financial year, according to the Clean Energy Regulator (CER), followed by Stanwell, Energy Australia and Origin Energy. The transition could be supported using flexible dispatchable resources, according to Origin Energy. The coal phase-out means more variable renewable energy (VRE) is required, but VRE output will not necessarily match demand. "The NEM review must also consider the actions to facilitate the planned retirement of coal-fired power stations from the energy system, which will still be occurring in the NEM beyond the CIS," Stanwell warned. "The urgency of developing solutions cannot be overstated, as any indecision now would result in increased government intervention later, and a disorderly and costly NEM beyond the CIS." Gas-fired generation A few firms view gas-powered generation as critical in the transition away from thermal coal and in maintaining system reliability. It will provide back-up in times of renewable droughts, said Stanwell and AGL, and should be noted in discussions of the forward strategy. But Alinta Energy is cautious of the costs of gas-fired power plants, believing them to be the least costly for customers but not economically viable because of their exposure to global gas market prices. Alinta's suggestion is to reduce the market's dependence on high-cost facilities including gas-fired facilities. Mixed views on capacity market Some companies mentioned a capacity mechanism as a solution. Coal-fired facilities should be allowed to continue until they can be replaced, said Alinta Energy, and gas power plants are necessary. Energy Australia and Delta are calling for the NEM to stay technologically neutral in this process, keeping thermal coal exits in mind. A capacity market needs to be sustainable without government subsidies, Alinta Energy said, and exit strategies for government intervention should be clear from the beginning. But capacity markets can lead to higher costs for customers, according to AGL, because of potential over-procured capacity. "If a capacity mechanism was implemented, it would be important to consider the impact of any capacity incentive on the operation of the NEM and the appropriate level of the market price settings — a balance that may be difficult to strike," AGL noted. The expert independent panel leading the review will continue carrying out consultation, and is expected to make final recommendations to energy and climate ministers in late 2025. By Susannah Cornford Australia coal fired power plant closures in NEM Plant Capacity (MW) Owner Closure date State Emissions CER 2023/24 year Scope 1 & 2 of CO2e Eraring 2,880.0 Origin 2025 NSW 13,550,220.0 Yallourn 1,480.0 Energy australia 2029 Vic 10,502,080.0 Callide B 700.0 CS Energy 2029 Qld 4,028,161.0 Total by 2030 5,060.0 28,080,461.0 Coal plant closures in NEM after 2030 Bayswater 2,640.0 AGL 2030-33 NSW 13,712,719.0 Vales Point 1,320.0 Delta 2033 NSW 7,111,963.0 Stanwell 1,460.0 stanwell 2035 Qld 6,982,204.0 Tarong 1,843.0 Stanwell 2035 Qld 10,936,021.0 Kogan 740.0 CS Energy 2035 Qld 4,522,472.0 Callide C 825.0 CS Energy 2035 Qld 688,038.0 Loy Yang A 2,210.0 AGL 2035 Vic 18,723,707.0 Sub-total 11,038.0 62,677,124.0 Total by 2030 16,098.0 90,757,585.0 CER Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Mitsubishi joins Philippine coal plant phaseout project

09/05/25

News

09/05/25

Mitsubishi joins Philippine coal plant phaseout project

Osaka, 9 May (Argus) — Japanese trading house Mitsubishi has agreed to join a project to phase out a coal-fired power plant in the Philippines, aiming to generate carbon credits through the Transition Credits mechanism along with Japan's Joint Crediting Mechanism (JCM). Mitsubishi and and its Hong Kong-based subsidiary Diamond Generating Asia (DGA) has agreed to join Philippine energy firm Acen, GenZero — a subsidy of Singapore state-owned investment firm Temasek — and Singapore conglomerate Keppel to phase out the 246MW South Luzon coal-fired plant in Batangas, the Philippines, and replace it with a clean power facility. The initial deal for this project was signed by Acen, GenZero and Keppel in August 2024. Acen is now seeking to decommission the coal-fired plant by 2030, instead of the previous target of 2040. It is still unclear what types of clean power sources will then be deployed. But renewables such as solar or onshore wind, alongside storage batteries, could be possible, a Mitsubishi spokesperson told Argus . The partners aim to leverage Transition Credits (TCs) for the early retirement of the plant. TCs are high-integrity carbon credits generated from the emissions reduced through retiring a coal-fired plant early and replacing this with clean energy. The South Luzon project is expected to be one of the first converted coal-fired plants in the world to generate TCs. The project is expected to generate carbon credits equivalent to 19mn t of CO2 emissions reduction over 10 years, the Mitsubishi spokesperson told Argus . Mitsubishi plans to include this project in the JCM mechanism, as the Philippines has been Japan's JCM partner country since January 2017. The company is already marketing the carbon credits in Japan, assuming the credits will be verified under the JCM, while also hoping to sell them in Singapore and the Philippines. Verified carbon reductions or removals under the JCM can be quantified on an international basis. Some of the JCM credits issued from such mitigation efforts will be used to achieve Japan's nationally determined contributions (NDCs), while ensuring double counting is avoided on the basis of corresponding adjustments between countries and consistency with the guidance on co-operative approaches referred to in Article 6.2 of the 2015 Paris climate agreement. JCM credits could be also traded under the Japan's green transformation emission trading system (GX-ETS), which will be officially launched in autumn of 2027 . The GX-ETS adopts the cap-and-trade programme, with the government allocating free allowances for each eligible entity every year. Japan is still highly dependent on coal-fired generation, although Tokyo has pledged to phase out inefficient coal-fed plants by 2030. Coal-fired output accounted for 32pc of the country's total power generation in 2024, according to data from the trade and industry ministry. When asked by Argus where there is the potential for the introduction of the Transition Credits mechanism in Japan, the spokesperson said Mitsubishi has not ruled out the possibility, but added there have been no discussions on this for now. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US seeks flexibility from Europe to help LNG deals

08/05/25

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08/05/25

US seeks flexibility from Europe to help LNG deals

Washington, 8 May (Argus) — President Donald Trump's administration is pressing European countries to offer flexibility on standards for methane emissions as a way to ease the pathway for them to sign long-term purchase agreements for US LNG. Trump has pushed for countries to commit to buying more US LNG as a way to avoid steep tariffs he has threatened to impose on countries that have trade imbalances with the US. But a looming requirement for European importers to show "equivalence" to EU methane monitoring requirements for newly signed gas supply contracts could pose an obstacle for US LNG, based on differences in how methane emissions are tracked. The administration's "ask" is for the EU to ensure that its methane-related measurement, reporting and verification (MRV) methodologies do not pose a barrier to US LNG, US acting assistant secretary of state for energy resources Laura Lochman said today. US LNG terminals have struggled to show equivalency to the MRV rules because, unlike many global LNG projects, they source their gas from pipelines connected to multiple fields. "Give time for industry to work through some of those traceability issues as well, because it would take a few years to be able to get to that point and work out the equivalency methodology," Lochman said at an event with European officials organized by the industry group LNG Allies. European officials indicated they are receptive to finding a solution, as they work to end purchases of Russian gas by the end of 2027. But they say they want to continue to see reductions in emissions of methane, which is a potent greenhouse gas. Trump has already started rolling back restrictions on methane emissions. "We understand you've got a different supply chain, as opposed to us, and that it's important to have it worked out so that any difficulties are taken away from American companies with those regulations," Netherlands ambassador to the US Birgitta Tazelaar said at the event. "Of course it's very important for the Netherlands and Europe that methane be reduced." US LNG developers are likewise pushing Europe to consider pushing back a goal to largely phase out natural gas consumption by 2040. That deadline could complicate the traditional financing model for new LNG terminals typically premised on signing 20-year supply deals, said Kimmeridge managing partner Ben Dell, whose company is building the proposed 9.5mn metric tonne/yr Commonwealth LNG project in Louisiana. "The one thing I would ask is for European members in this room to think beyond 2040," Dell said. "Ultimately extending that runway allows a lower-cost project financing and ultimately a lower cost delivery into the European market." A potential trade deal between the US and the EU could create an opportunity to grant equivalency to US LNG exports to avoid barriers from the EU methane regulation, LNG Allies president Fred Hutchison said today. The US in turn could reclassify the EU as having a free trade agreement for gas, which would expedite US LNG export licensing, Hutchison said. The Trump administration sees the potential for European contracts to lead proposed US LNG export terminals to reach final investment decisions (FIDs). The administration has already been "very clear" about its goal to increase LNG exports and cut regulations facing the natural gas sector, the State Department's Lochman said. "When you put together the push from the US side to support, and then the demand signals on the European side, you can get more projects making it to FID," Lochman said. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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