Assessing Japanese Nuclear Fallout May Take Six Months, EEA Says
Power, natural gas and carbon traders may have to wait six months to determine whether the crisis at Japan’s Fukushima reactor was serious enough to slow nuclear projects worldwide, EEA Fund Management Ltd. said.
Assessing how much radioactivity was released and where it went may take three to six months, said Simon Shaw, chairman of London-based EEA, investment adviser to carbon-credit developer Trading Emissions Plc.
Carbon prices may rise more quickly this year to at least 18 euros ($25.50) a metric ton following the incidents in Japan, Shaw said today by phone. Power from damaged or closed nuclear reactors, including seven in Germany, will likely need to be replaced by fossil fuels or renewables, Shaw said. “Emissions prices have to be higher.”
Carbon-dioxide allowances jumped 9.5 percent last week, the most since April 2009. They traded as high as 17.76 euros a ton on March 16, the highest since December 2008. Power utilities buy carbon permits to match forward sales of electricity generated from fossil fuels.
Permits for December fell 0.5 percent today to 17.13 euros on the ICE Futures Europe exchange in London as of 10:54 a.m.
It’s unclear how many fewer nuclear plants will now be built, Shaw said. “Greater demand for fossil fuels means higher emissions,” he said. “My view in the U.K. is I don’t expect them to change their nuclear policy.” In Germany, there may be fewer nuclear-plant life extensions, he said.
Japan’s Worst Earthquake
Stocks in industries affected by Japan’s worst earthquake on record climbed today amid signs the country is making progress bringing the crisis at a stricken nuclear plant under control. Extract Resources Ltd., an Australia-listed company developing a uranium project in Namibia, surged 14 percent. German-traded shares of Tokyo Electric Power Co., owner of the stricken Fukushima Dai-Ichi nuclear plant, climbed 3 percent in Frankfurt.
“The worst-case-scenario has been avoided in the ongoing nuclear crisis,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co.
United Nations overseen Certified Emission Reduction credits for December rose 11 percent last week to 13.12 a ton on ICE. They fell to 13 euros today.
“Below 15 euros for CERs, it’s questionable whether the carbon price is having a suppressing effect on emissions,” Shaw said. “This year and next year you would see much stronger prices anyway,” because of recovering European factory output and higher electricity demand, he said.
To contact the reporters on this story: Mathew Carr in London at m.carr@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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