Preparations for California cap-and-trade auctions
Friday, 11 November 2011 22:14

 

The objective of the requests for proposals currently released by the Air Resources Board in California is to administer financial and transaction services to support up to six quarterly GHG allowance auctions and up to six “reserve sales” to implement the California cap-and-trade program. ARB is anticipating the first California allowance auction will take place in late 2012. The auctions will continue based on the calendar quarter for the remainder of the program.

The deadline for receipt of proposals is December 2, 2011.

 

 

The latest developments in the California cap-and-trade program are:

 

1) the approval by the California ARB of final regulations for an economy-wide carbon market and

 

2) the two Requests for Proposals (RFP) released by Californian Air Resources Board (ARB)  with respect to:

a) the Cap-and-Trade Auction and Reserve Sale Operator and

b) the Cap-and-Trade Financial Services for Auction and Reserve Sale.

 

The participants are invited to review, respond and submit proposals, which must comply with the instructions found in the RFP.

 

As was pointed out also on this website, the Model for California emission allowances auctions is in some respects different from that adopted under EU ETS (as regards details see Californian v European model for emission allowances auctions – which of them is better suited to the market).

 

The ARB now contracts for the technical infrastructure necessary to implement auctions.

 

Pursuant to the RFP there are anticipated to be more than 300 quarterly GHG allowance auction participants (bidders) and more than 300 quarterly reserve sales participants.

 

The subject of the first order i.e. the Cap-and-Trade Auction and Reserve Sale Operator is to provide to the Air Resources Board (ARB) services to operate a quarterly auction of emissions permits and conduct reserve sales in the California Cap-and-Trade Program.

Under the RFP the potential contractor must:

 

1. Design Processes and Procedures for Auction and Reserve Sale. Design and specify the GHG allowance auction and reserve sale processes and procedures, including the bidding process and the required outreach to potential auction and reserve sale participants;

 

2. Develop Qualification Information and Applications. Develop and publish qualification information and applications, which includes communicating with potential auction and reserve sale participants on the upcoming auction and reserve sale;

 

3. Conduct the Bidder Qualification Process. In coordination with ARB, accept the auction and reserve sale participants that have completed the bidder qualification process, meet the minimum financial requirements, and have been approved by ARB;

 

4. Receive Bids for Auction and Reserve Sale. Receive bids for the auction and reserve sale, in a secure, easily accessible, and user-friendly manner;

 

5. Conduct the Quarterly GHG Allowance Auctions. Conduct the auctions according to program’s requirements;

 

6. Determine Auction Settlement Price and GHG allowance Awarded. Determine auction settlement price and number of GHG allowances awarded to each participant;

 

7. Correct GHG Allowance Auctions. Correct and rerun the auction as needed;

 

8. Conduct Quarterly Reserve Sales. Conduct the reserve sales;

 

9. Communication Value of Bids and Auction and Reserve Sale Awards. Communicate the value of bids and awards (auction and reserve sales) to ARB; and

 

10. Prepare a System Security Plan. Prepare a System Security Plan describing the security approach for all proposed services and ensure compliance with the security processes, practices and requirements in the State of California.

 



 

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