Mighty River Power has launched New Zealand's first tender for a long-term supply of carbon credits.Under the emissions trading scheme, power companies are required to offset emissions from electricity generation activities from 1 July 2010.At present, Mi
Mighty River Power has launched New Zealand’s first tender for a long-term supply of carbon credits.
Under the emissions trading scheme, power companies are required to offset emissions from electricity generation activities from 1 July 2010.
At present, Mighty River has two existing carbon off-take agreements with Lake Taupo land owners within the Lake Taupo Protection Trust area and is close to finalising a third.
Mighty River operations general manager Fraser Whineray told NBR that the tender process made commercial sense as an alternative to “reasonably time-intensive bilateral discussions, of which we’d need to have many more.”
“What we see here is an opportunity where we think we’ll be able to get carbon for attractive prices over the long-term and lock that away and have that hedge in place.”
Mighty River is inviting tender for a preferred quantity of at least 15,000 carbon units per year, or rights to the carbon produced by 250 hectares over a preferred term of 15 years.
Interest is expected from the New Zealand forestry and agriculture sectors.
Unlike Europe, New Zealand does not have a carbon futures market – which makes it difficult to estimate a likely price range for the tender. “We’ll just have to wait and see,” Mr Whineray said.
Depending on international prices, a long-term domestic carbon credit supply arrangement could also emerge as a trading opportunity for the company.
Tender documents will be available from August 3 with a response deadline of August 26, 2010.
Mighty River is liable for carbon emissions from its Southdown thermal plant and, to a lesser extent, its four geothermal plants in the central North Island.
