Modeling SREC Markets
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MODELING SREC MARKETSWill Harrel
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MA SYSTEM OVERVIEWFor every MWh of solar photovoltaic (PV) energy
produced, 1 Solar Renewable Energy Credit (SREC) is created
These SRECs are sold from the solar generators to load-serving entities (LSEs), who must purchase a certain number of SRECs
If an LSE does not meet its requirement, it must pay the ACP◦ The ACP is currently $600 per SREC◦ This acts as a price ceiling for SRECs
Excess unsold SRECs can be sold to MA government◦ $300 per SREC with a 5% fee◦ This acts as a price floor
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MA SYSTEM OVERVIEW (CONTINUED)
The total requirement for the next year is set using a formula◦Initially 30 MW ≈ 34,000 SRECs
The requirement for an individual LSE is proportional to its market share
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GOAL: FIND THE FORWARD PRICE CURVEThe forward price curve is based on
two categories◦Decisions made by agents
LSEs Generators
◦Randomness in the system Decision profiles of other generators Costs, electricity price, future ACP, and more
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HOW DO WE ACCOMPLISH THIS?Multi-agent stochastic simulationSimulation run 100’s of times
◦Agents “learn” from outcomes in previous runs
Find averages and spreads◦Price and Capacity
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≥50% at ACP,≥25% at price floor
≥50% at price floor
RESULTS—LOTS OF UNCERTAINTY
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TRADITIONAL ACP
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VARIABLE ACP
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TRADITIONAL ACP
≥50% at ACP,≥25% at price floor
≥50% at price floor
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VARIABLE ACP
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