News That Matters

Global Climate Change Creates Demand for Green Energy, TRCs, and Emissions Trading In Mexico

Global warming and climate change are intense issues driving heated discussions around the globe. Industrialized countries understand the issues, but fight major concessions due to limited participation by third world countries and the high cost of reducing the carbon footprint. Renewable energy will take hold in Mexico. As incomes and GDP increase, this sector benefits.

How can green energy trading credits or emissions credits surface as an international trading product in the manner that energy leaders imagined over 15 years ago? Green energy products emerge in individual markets at a slow pace. Many markets fail to work with one another. The best green energy type trading firms exist in America and the United Kingdom (UK). Will the United Nations (UN) successfully create a leadership group to push this green platform? Has reforestation surpassed green energy trading credits to slow global warming? Is it simply a visible thought to save the sacred green space across the world?

The UN supports climate change and global warming. A green energy trading exchange in Mexico helps the UN platform. Leo DiCaprio’s short speech on climate change talked about the UN’s Climate Change Summit supporting efforts at home and abroad to tame global warming. In January 2016, Mr. DiCaprio spoke in Davos, Switzerland at the annual World Economic Forum meeting about climate change and big energy.

Tradable Renewable Certificates or TRCs and emission offsets meet Mexico and other LATAM countries’ legal requirements for lower carbon footprint. These TRC are differentiated by type of renewable energy, the geographic region location of the electric plant, date of the TRC benefits. Green energy or TRC trading units are created by many unique investors. These investors build and finance the underlying green energy and renewable energy asset base to supply TRCs. As these arrive, traders will be able to execute legal contracts to capture TRC benefits and resell them. These will likely be sold by the month or year and each TRC will represent one year’s worth of renewable energy benefits. The existing TRC market is underway in USA and Canada.

Will green energy trading credits or Emissions credits become an international trading product in the manner that energy leaders imagined over 15 years ago? Green energy products continue to surface in individual markets at a slow pace. Many markets fail to work with one another in a way to improve progress for global warming issues. The best green energy type trading firms exist in Houston, NYC, and London. Will any agency or UN type organization successfully create a tightly knit leadership group to push this green platform? Will reforestation surpass green energy trading credits in slowing global warming?

The UN is very involved in climate change and global warming. This new green energy trading exchange should benefit lies between Mexico and the UN. Leo DiCaprio gave a short speech on climate change for the UN’s Climate Change Summit supporting efforts at home and abroad to tame global warming.

Green energy or TRC trading units are created by many unique investors. These investors build and finance the underlying green energy and renewable energy asset base to supply TRCs. As these arrive, traders will be able to execute legal contracts to capture TRC benefits and resell them. These TRC are differentiated by type of renewable energy, the geographic region location of the electric plant, date of the TRC benefits. These will likely be sold by the month or year and each TRC will represent one year’s worth of renewable energy benefits. The existing TRC market is underway in USA and Canada.

TRCs and emission offsets may be used to settle Mexico and other LATAM countries’ legal requirements for lower carbon footprint. This map is derived from CFE, CRE, and CONAE research and shows the wide range of existing green energy assets in Mexico. Australia’s carbon emissions increased 3.8 million tons during the last year. Each continent’s emission numbers continue to rise.

Tradable Renewable Certificates (TRC)

One type of trading product in the future of Mexico is TRCs. These can be created from renewable energy electric power plants. The TRC represents the environmental benefits associated with the use of renewable fuels, rather than fossil fuels. TRCs can be classified as a good or service. TRCs may be labeled as securities by an trading exchange to unsophisticated consumers. This could arise from a decision by governments to require their use. TRCs includes air emission offsets like NOx benefits, SO2 benefits, and CO2 offsets for carbon monoxide trading. The oversight for TRCs in Mexico will include CONAE (The National Commission for Energy Conservation of Mexico) and CFE (The Federal Electricity Commission).

The Green Exchange

The Green Exchange Venture invests in green energy and renewable energy. It creates green energy derivatives and similar products through the financing of very large energy assets and the loan syndication. The individual members of this group have significant derivative trading expertise. It will move into LATAM as this market matures. The new Mexican legislation for annual clean energy awards is a driver.Green Exchange Holdings LLC, members include Constellation NewEnergy, Credit Suisse Energy, Evolution Markets, Goldman Sachs, ICAP Energy, J.P. Morgan Ventures Energy, Morgan Stanley Capital Group, RNK Capital, Spectron Energy, TFS Energy, Tudor Investment, Vitol and CME Group. Small companies should avoid investing in this area until the market is mature.

Goldman Sachs owns a 10 percent stake in a carbon credit trading group (Chicago Climate Exchange) and owns a minority stake in a Utah-based firm selling carbon credits (Blue Source LLC). Goldman also invested in wind power (Horizon Wind Energy), renewable diesel (Changing World Technologies) and solar power (joint venture with BP Solar). Goldman clearly has a history of investing and managing green energy credits in America. As North American governments force energy producers to use cleaner energy, this expertise should be quite valuable. This market may be subject to high volatility as it matures. Goldman may be the first firm to create cross country border green energy trading credits.

There are options for excess solar energy from solar farms and solar commercial installations across Mexico. These are great commercial and industrial options in Mexico due to financing and presidential support. The idea is less perfect in the residential sector due to theft and income levels. Renewable energy will take hold in Mexico. As incomes and GDP increase, this sector benefits.

Volumes of excess solar power will be sold in the spot market to users and LDC’s. SMOG may affect the market area around Mexico city. A physical investigation of the underlying asset base is required for spot purchases and swaps of excess solar energy sales. Purchase or acquire the underlying weather records for the geographic area and store them in the Cloud. Use this data to create a reliable pattern of projected weather related spot energy options or swaps as the market develops. There are commercial services which supply reliable weather data.

CFE, CRE, and CONAE research shows the wide range of existing green energy assets in Mexico. Australia’s carbon emissions increased 3.8 million tons during the last year. Each continent’s emission numbers continue to rise.

Excess solar energy from solar farms and solar commercial installations exist across Mexico. Excess solar power will be sold in the spot market to customers and LDC’s. These commercial and industrial options in Mexico have both financing and presidential support. The residential sector will have challenges due to theft and income levels.

SMOG in Mexico City could impact placement of solar installations near downtown. A physical investigation of the underlying asset base is required for spot purchases and swaps of excess solar energy sales. Acquire weather records in the geographic area prior to acquisition. This data creates projected weather for spot energy options or swaps as the market develops. There are commercial services which supply reliable weather data. ©2016