Renewable Energy Certificates
description
Transcript of Renewable Energy Certificates
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Renewable Energy Certificates
• Represent attributes of electricity generated from renewable energy sources
• Also called “green tags”• Unbundled from the physical electricity• Currency of renewable energy markets
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Renewable Energy Certificates
• Flexible enough to make attributes a commodity• Not subject to geographic or physical limitations
of electricity• Certificates are used to
– Show compliance with regulatory requirements
– Supply end-use costumers with renewable energy products
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REC Challenges
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Issues to be Resolved
• REC substantiation and verification• National REC Markets• Ownership uncertainty• Emissions markets• REC definition
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Tracking and Verification
• Bilateral contract between buyer and seller with affidavit as to source, ownership and exclusive sale
• Third-party entity that issues certificates
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EPA’s SO2 Program – Obstacles
• Emissions allowances primarily granted to fossil plants, with limited amount set aside for renewables; optimal allocation is difficult
• Program limits participation to utilities; renewable energy developers may participate only if join with a utility
• So2 capped by federal law; allowances allocated only to polluting plants
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REC Tracking Systems
• Verify compliance with renewable energy definitions
• Substantiate voluntary marketing claims• Provide protection against trading abuses
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REC Tracking Systems
• Issue an electronic certificate • Record changes of certificate ownership• Retire certificates when used for different
purposes
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PJM’s GATS
Generation Attributes Tracking System
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GATS
• PJM Market (Pennsylvania, New Jersey, Maryland)
• Motivated by state requirements for distributing emissions information to customers
• See: http://www.pjm-eis.com and http://www.pjm.com/committees/working-groups/dsrwg/downloads/20050921-item-6-gats-update.pdf
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NEPOOL/ERCOT/PJM REC Tracking Systems Comparison
NEPOOL ERCOT PJM
All generation in or delivered to area
Existing and new renewable generation
All generation in PJM control area
Lifespan 1 quarter to one year, depending on issue date
Lifespan 3 calendar years Lifespan undecided
Annual membership fee ERCOT fees Subscription fee and volumetric fees
6 New England States Texas only 13 states, including PA, MD, NJ
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NEPOOL/ERCOT/PJM REC Tracking Systems Comparison
NEPOOL ERCOT PJMUnit-specific imports or exports must be physically delivered to/from NEPOOL system
Imports under certain circumstances
Imports only from regions offering reciprocal treatment of PJM RECs
Mandatory participation for all generators and LSEs
Mandatory participation for competitive retail suppliers that must meet RPS
Mandatory participation for all generators and LSEs
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NEPOOL/ERCOT/PJM REC Tracking Systems Comparison
NEPOOL ERCOT PJM
System administered by APX, sharing some responsibilities with NE regulators
System administered by ERCOT, sharing some responsibilities with PUCT
System administered by PJM, sharing some responsibilities with regulators
End of RPS compliance period: RECs retired after used for compliance; unsold certificates assigned to residual mix
End of RPS compliance period: RECs retired after used for compliance; unused certificates remain in REC account until retired
End of RPS compliance period: RECs retired after used for compliance; unsold certificates assigned to residual mix
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