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EU Carbon, Power Decline as RWE Says Economy May Hurt Margins
2010-08-12 11:38:16.869 GMT
By Mathew Carr
Aug. 12 (Bloomberg) -- Carbon allowances in the European
Union's emissions-trading system dropped along with German
electricity prices as RWE AG said a slowing economy might hurt
profit margins "for years."
EU permits for December fell 6 cents, or 0.4 percent, to
14.34 euros ($18.39) a metric ton at 12:15 p.m. on London's
European Climate Exchange. German baseload power for next year
lost 0.3 percent to 50.30 euros a megawatt-hour, its third
straight decline, according to broker prices compiled by
Bloomberg.
Lower power prices can reduce the incentive to sell
electricity forward, curbing demand for emission permits. The EU
market is the world's biggest cap-and-trade program by volume.
"If the economic situation were to deteriorate
unexpectedly, it would probably cause demand for our main
products -- electricity and gas -- to drop and prices to fall,"
RWE executives said today in an earnings report. "There is a
danger of our electricity margins being curtailed for years."
For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
--Editors: Mike Anderson, Raj Rajendran
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
