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Renewable Portfolio Standards: Solar RECs – A Monetary Incentive
1. Renewable Portfolio Standards:
Solar RECs –
A Monetary Incentive
Michael Lee
Maryland Public Service Commission
Maryland, DC, Virginia - Solar Energy Industries Association
Solar Energy Focus Conference: Fall 2009
December 3-5, 2009
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2. What is a Renewable Portfolio Standard?
Renewable Portfolio Standard (RPS):
•A requirement on retail electric suppliers…
•To supply a minimum percentage or amount of their
retail load…
•With eligible sources of renewable energy (e.g., solar)
Typically backed with penalties of some form
Often accompanied by a tradable renewable energy credit
(REC) program to facilitate compliance
Never designed the same in any two states (e.g., penalties vary)
Source: Lawrence Berkeley National Laboratory 2
3. Mid-Atlantic States’
Renewable Portfolio Standards:
a relatively new policy mechanism
– New Jersey: began in 2004
– Maryland: requirements in effect in 2006
– Pennsylvania: requirements in effect in 2007
– District of Columbia: requirements in effect in
2007
– Delaware: requirements in effect in 2007
– Virginia: enacted a voluntary goal in 2007
Source: PJM-EIS, Database of State
Incentives for Renewable Energy (DSIRE)
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4. 2008-2009 RPS:4 new states, 13 state
revisions
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Source: Lawrence Berkeley National Laboratory
5. State RPS Policies:
29 States: Policies, 5 States: Non-binding Goals
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Source: Lawrence Berkeley National Laboratory
7. Mid-Atlantic States’
Solar Tiers
– New Jersey
– Maryland
– Pennsylvania
– District of Columbia
– Delaware
Source: DSIRE
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8. Mid-Atlantic States’
Solar Tiers
• PJM Interconnection
•New Jersey
•Maryland
•Pennsylvania
•District of
Columbia
•Delaware
Source: DSIRE
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9. PJM: The Region’s Wholesale Bulk Power Market
• PJM Interconnection
PJM Interconnection is a regional transmission organization (RTO)
that coordinates the movement of wholesale electricity in all or parts
of 13 states and the District of Columbia. 9
10. PJM – EIS
Generation Attribute Tracking System
• GATS - a regional environmental registry and information system that
will track the environmental and fuel attributes of generation.
• The system will:
• assist LSEs in their compliance with applicable emissions and fuel
disclosure requirements and with state-level Renewable Portfolio
Standard (RPS) regulation or renewable policy
• enable voluntary bilateral markets and marketing claims for
renewables.
• provide state agencies with reporting and verification
• provide renewable generators with a means to monetize their
renewable attributes and qualification
Source: PJM-EIS
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11. Generation Attribute Tracking
System (GATS)
• Publicly available bulletin board where account holders can
post REC’s that are available for sale
• In April 2009, the bulletin board report was enhanced to
allow sellers to include a Requested Price for REC’s
• Suppliers can contact parties with state-eligible SRECs for
sale
• In early 2010, PJM-EIS expects to have enhancements in
place to allow buyers to post the quantity and price of RECs
they would like to acquire.
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12. Solar Facilities Registered in GATS
• 4,306 solar facilities registered and
qualified in PA, DE, MD, DC, and NJ
• Total nameplate capability of 103,216.21
kW
• 41,177 Solar RECs created in GATS since
2005
(As of September 11, 2009)
Source: PJM-EIS 12
13. Solar Generators Registered in PJM
GATS by State
• DC - 5 • NC – 2
• DE – 381 • NJ – 3,606
• IL – 2 • PA – 100
• KY – 1 • VA – 15
• MD – 171 • WV - 1
• MN - 1
Source: PJM-EIS, September 2009
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14. SRECs Issued in States
(Nov. 2009)
DE 798
MD 216
NJ 6,192
PA 402
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Source: PJM-EIS, December 2009.
15. SREC Newsletter
November Auction Clearing Prices
• District of Columbia $313
• Delaware $200
• Maryland $360
• New Jersey $660
• Pennsylvania $290
Source: SRECTrade, December SREC Newsletter
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16. Mid-Atlantic
Market Comparisons
Alternative Compliance Solar Weighted Average
Penalty Price (12/08-12/09)
• NJ: $711/MWh (08/09) • NJ: $385-$649 (49,042)
• MD: $400/MWh (09) • MD: $297 - $415 (2,367)
• DC: $500/MWh (09) • DC: N/A
• PA: 200% ave. mkt value • PA: $225-$357 (2,074)
for RECs sold in PJM All: $310 - $591
• DE: $250, $300, $350, • DE: $232-$358 (4,763)
respective shortfall • VA: $415-$430 (83)
Source: PJM-EIS, December 2009.
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Note: (trades), certain months without data for certain states
18. GATS Solar REC
Auction Platform Launch Date:
Spring 2010 (“Envisioned”)
• Purpose hold monthly auctions
• Clear Solar REC bid and offers in all states
simultaneously, with a single market
clearing price calculated for each state
• PJM Interconnection, LLC will launch a
new subsidiary to own and administer the
proposed Solar REC auction platform.
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19. PJM: Who wants this monthly
auction for solar RECs?
• Small Resource Owners & Aggregators (requested)
– “Now, how do I sell my RECs?”
– Cost-effective way to maximize value of RECs
• Load Servers (supported)
– Reduces administrative cost of RPS compliance
• State Agencies (supported)
– Reduce cost of RPS compliance
– Provides price transparency
– Reduces the use of Alternative Compliance Payments as a means
of RPS compliance
– Supports the development of distributed resources
Source: PJM-GATS Subscribers Group
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20. Source Information:
• Database of State Incentives for Renewable
Energy (DSIRE)
• Lawrence Berkeley National Laboratory
– Renewable Portfolio Standards: A Factual Introduction to Experience
from the United States, Wiser et al.
– State of the States: Update on RPS Policies and Progress, Wiser & Barbos
• PJM-Environmental Information System
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21. Questions?
Now: Later:
Michael Lee Jerry Hughes
Director, IRP Chief Engineer
Maryland Maryland
Public Service Commission Public Service Commission
MLee@psc.state.md.us JTHughes@psc.state.md.us
410-767-8242 410-767-8069
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