Earlier today, SRECTrade hosted a training webinar for its Illinois Adjustable Block Program (ABP) partners. Among other topics, the webinar reviewed
For access to the presentation slides, please click HERE. To view a video recording of the webinar, please click the image below.
On April 8th, the Clean Energy Jobs Act (CEJA) passed the Maryland House of Delegates, 95-40, and Senate, 31-15, respectively. Most notably, the Bill increases the state’s renewable energy mandate from 25% to 50% by 2030. The in-state solar carve-out follows suit, raising the 2019 solar carve-out to 5.5%, increasing to 14.5% by 2028. The solar carve-out and Solar Alternative Compliance Penalty (SACP) schedule is amended as follows:
The bill now heads to Governor Larry Hogan’s desk, where he has the option to either sign, veto, or let the bill go into law without his signature. While uncertainty remains on Governor Hogan’s view on the legislation, some believe his recently shared perspective demonstrates positive support.
SRECTrade will continue to monitor the situation and provide further analysis if and when the Bill goes into law.
TweetOn April 5th, the Massachusetts Department of Energy Resources (DOER) filed emergency regulations that amend portions of the current version of 225 CMR 16: Alternative Energy Portfolio Standard (“APS”).
Specifically, the emergency regulation cancels the transition from pre-minting to forward minting for all small (residential) renewable thermal technologies. As such, small systems will continue to receive their credits upfront, in lump-sum. These proposed changes will take effect immediately and remain in effect for three months. If the DOER successfully concludes the entire rulemaking process within the next three months, the emergency amendments will become law.
SRECTrade provides comprehensive management and transaction services for renewable thermal asset owners within the APS program. Please reach out to SRECTrade if you believe you are eligible or have any questions regarding the program.
TweetApril 17, 2019 Update: On April 16, 2019 the ABP Administrator published the final Block 4 REC Pricing, confirming the indicative Block 4 REC Pricing displayed in the table below. Please note that a typo was made in the original indicative table of $69.93 for Group A Large 10-25 kW, which should actually be $69.63. This typo has been corrected in the table below.
On Wednesday, April 3rd, the Adjustable Block Program (ABP) Administrator announced the Adjustable Block Program Discretionary Capacity Allocation. Notably, the 166.5 MW AC of discretionary capacity was allocated between the six Block Categories according to the table below:
Combining the discretionary capacity allocation (Block 4) with the initial opening volumes in Blocks 1-3 results in the following final block volumes (MW AC):
All ABP applications qualifying under discretionary capacity will receive Block 4 pricing, which is 4% lower than Block 3 pricing. Indicative Block 4 pricing is displayed in the table below:
As of the Program Administrator’s Current Status of Illinois Adjustable Block Program Blocks update on April 4, 2019, there are 129.608 MW AC of applications accounted for in the Group A Large Block Category. The addition of the Group A Large discretionary capacity indicates that all Group A Large applications submitted by the February 13th deadline and approved by the Program Administrator will receive at least Block 4 pricing, even if they are not selected in the Block 1 Lottery. There are also still 11+ MW AC of Group A Large capacity available at Block 4 pricing for new applications.
As of the April 4th capacity update, there are also 123.562 MW AC of applications accounted for in the Group B Large Block Category, indicating that there are still 26+ MW AC of Group B Large capacity available at Block 4 pricing.
SRECTrade is currently accepting facility applications for all Small and Large Block Categories at the following indicative pricing:
For more information on the rationale behind the discretionary capacity allocation, please view the Allocation of Adjustable Block Program Discretionary Capacity Rationale document. SRECTrade will continue to provide updates on ABP developments and will also closely monitor the results of the April 10th Block 1 Lottery.
TweetLast week, on Tuesday, March 19, 2019, the Maryland Senate passed the Clean Energy Jobs Act (CEJA) 33-13. Senate Bill 516 most notably increases the Maryland Renewable Portfolio Standard (RPS) to 50% renewable energy by 2030. The bill also substantially increases the state’s Solar REC program bumping the 2019 solar requirement to 5.5% and increasing until it reaches 14.5% in 2028 and onward.
For the legislation to progress, the Maryland House Economics Matters Committee would need to bring it forward and be voted on favorably on the floor of the House. The bill would then ultimately be sent onward to Governor Larry Hogan’s desk. Governor Hogan will then need to sign the bill or let it pass without his signature to put the bill into law. While uncertainty remains on Governor Hogan’s view on the legislation, some believe his recently shared perspective demonstrates positive support.
Since the Senate voted in favor of the bill, the House hasn’t taken action on the matter yet. On Monday, March 25, U.S. Senator Chris Van Hollen (D-Md.) put his support behind the bill. Senator Van Hollen sent a letter to House Economic Matters Chair Dereck Davis explaining why time is of the essence. Specifically Van Hollen noted that delaying the legislation until next year could result in the loss of nearly $250 million in federal investment tax credit (ITC) dollars. Additionally, further delay could continue to hurt the solar jobs market in the state. Maryland lost 800 solar industry jobs in 2018, ranking it 47th in solar growth in the U.S.
As of now, the bill awaits action in the House. Not much time remains in the current general session, which is scheduled to adjourn on Monday, April 8. SRECTrade will continue to monitor these proceedings closely and update our partners and clients with any new information.
TweetSRECTrade is excited to announce that eGauge and Fronius are now eligible to auto-report production for all PJM GATS facilities through SRECTrade’s online platform. The new integrations expand on SRECTrade’s existing functionality with Enphase Energy and SolarEdge. These new integrations demonstrate SRECTrade’s commitment to focusing on delivering efficient technology solutions to its clients.
Selecting eGauge will require applicants to also provide the eGauge “Device ID” or “Device Name”. Similarly, selecting Fronius will require applicants to also provide the Fronius “Site ID”. SRECTrade’s Operations and Reporting Team will work with applicants on completing auto-reporting setups.
For Illinois-sited facilities, eGauge and Fronius are now approved auto-reporters for the Illinois Adjustable Block Program (ABP).
TweetPursuant to the California Global Warming Solutions Act (AB32), Executive Order S-01-07 of 2007 called for a Low Carbon Fuel Standard (LCFS) to reduce the carbon intensity (CI) of California transportation fuels by 10% by 2020, from a 2010 baseline. The Order instructed the California EPA to develop a compliance schedule and directed the California Air Resources Board (CARB) to initiate regulatory proceedings to implement the program. CARB approved the LCFS regulation in 2009. Implementation and the first year of compliance began in 2011. Revisions to the program were made at the end of 2011 and took effect in 2013. Due to a court ruling that found procedural issues with the original adoption of the program, the program targets were effectively frozen from 2013 – 2015 until CARB re-adopted it in 2015. In January 2019, CARB amended the LCFS regulations and increased the carbon intensity reduction goal to 20% by 2030. An LCFS Credit is issued per 1 metric ton (MT) of CO2 equivalent reduced.
Other states and territories (i.e. Oregon and British Columbia) on the western seaboard of North America have followed in California’s footsteps and implemented LCFS programs of their own. As compliance standards continue to build, these programs hope to stimulate greater regional synergy in lowering greenhouse gas emissions.
The LCFS applies to the sale or supply of any fuel in California. Fuel producers and importers are the primary regulated parties. Regulated parties that exceed the maximum CI compliance limit may meet compliance by purchasing credits that are issued to regulated parties with an average CI that is below the maximum CI compliance limit. The LCFS enforces a declining CI curve every year to ensure the continuous reduction of the transportation fuel industry’s environmental impact. The chart below reflects the compliance schedule of average CI that needs to be meet for each respective baseline fuel type.
SRECTrade provides EV charging networks, fleet operators, original equipment manufacturers, and independent EV charging station owners comprehensive fuel credit registration, management and monetization services. We make it easy to register, manage and navigate the regulatory and administrative complexities of the western clean fuels markets. Our company facilitates a return on the investment in your EV fleet or charging station portfolio through low-carbon fuel standard (LCFS) credit management and transaction services. If you are interested in our services or have any questions, please reach out to our Clean Fuels Team at cleanfuels@srectrade.com.
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On February 5, 2019 SRECTrade’s environmental commodity management platform surpassed 500 megawatts (MW) of assets under management. As of today, the Company manages more than 520 MW of clean energy projects spanning more than 36,000 assets. SRECTrade’s assets under management are comprised of solar photovoltaic, wind, renewable thermal, and electric vehicle assets. This milestone demonstrates the Company’s ability to manage clean energy projects across a variety of environmental commodity incentive markets.
SRECTrade-X, the Company’s portfolio management software, provides services to institutional renewable energy asset owners covering an additional 1.2 gigawatts (GW) of assets across more than 115,000 projects. The platform also provides renewable energy credit solutions to electricity suppliers and environmental commodity trading firms.
Over the past decade, SRECTrade has established itself as the preeminent provider of efficient environmental commodity management and technology solutions. The Company provides cloud-based services to the clean energy industry with an expertise in managing, transacting, and processing environmental incentives. SRECTrade’s mission is to accelerate the adoption of clean energy by providing services and technology that minimize the time, cost, and risk associated with achieving benefits and compliance in the markets it serves.
A copy of the full press release can be found here.
TweetOn January 18, 2019, the mayor of the District of Columbia signed the CleanEnergy DC Omnibus Bill Amendment Act of 2018, increasing the District’s Renewable Portfolio Standard to 100% by 2032 and the solar carve-out to 10% by 2041. Notably, the Act increased the useful life of an SREC from three to five years and drew forward the legacy solar requirement by two years. As a reaction to these policy changes, the District’s SREC market has seen a much-needed jump in both pricing and liquidity, after over a year of falling SREC values and thin market conditions. Since the market bottomed-out in Q4 of 2018 at $295 per credit, we have seen a dramatic pricing swing of nearly 30%, to $380 per credit. The enclosed analysis examines the fundamental market conditions which are driving this increase in market pricing and liquidity.
With the enactment of the CleanEnergy DC Omnibus Bill Amendment Act of 2018, electric load can now be placed into one of three compliance buckets:
According to solar alternative compliance payment (SACP) data in the DCPSC Annual RPS Report for Compliance Year 2017, approximately 75% of the District’s 2017 electric load was grandfathered under the legacy SACP levels from the DG Amendment Act of 2011. Based on this information, we made the calculated assumption in our analysis that the percentage of 2019 electric load in each respective bucket is as follows: twenty-five percent (25%) in bucket 1, fifty percent (50%) in bucket 2, and twenty-five percent (25%) in bucket 3. We assumed that bucket 1 would roll off completely by 2020 and bucket 2 by 2022. Beginning in 2022, all load will be subject to the solar requirement and SACP provisions in the CleanEnergy DC Omnibus Bill Amendment Act of 2018.
Using these assumptions and flat load growth moving forward, we will likely see the market shift from an oversupplied to an undersupplied dynamic beginning in 2020. However, even with a near-certain oversupplied dynamic in 2019, the ability to bank credits for five years allows market participants to more flexibly utilize these SRECs, providing buoyancy to 2019 vintage SREC pricing. Barring an unprecedented increase in solar build rate or decrease in statewide electric load served, we expect this policy change to provide SREC pricing stability for the foreseeable future.
Should you have any questions about the enclosed analysis or need transaction and management services, please contact us.
With Q3 2018 issuance numbers out, SRECTrade would like to provide an update on the current standing of the SREC-I and SREC-II markets.
SREC-I
The SREC-I market is not subject to any new capacity and, as such, is largely impacted by electricity load figures and solar production. Given the current Massachusetts Department of Energy Resources (MA DOER) estimates for exempt load, expected increased retail electric load*, and SRECTrade’s projections for final 2018 SREC generation figures, the 2018 SREC-I market will be undersupplied by approximately 91,000 SRECs, or 10.9% of the exempt load adjusted obligation. Currently, SRECTrade projects the 2019 SREC-I market will have a similar dynamic of undersupply, with a shortage of approximately 46,000 SRECs, or 5.8% of the estimated exempt load adjusted obligation. For specific details, please see our full presentation here.
The market seems to have taken this undersupply into account, with 2018 and 2019 SREC-Is bid at approximately $400 and $370, respectively. These values amount to approximately 94% and 91% of their respective ACP levels ($426 and $404, respectively).
SREC-II
The SREC-II market closed to new capacity as of November 26, 2018. While systems under 25 kW DC must have been interconnected prior to the closing date, applications will still be accepted through February 15, 2019. As such, there is still some uncertainty as to how much additional residential capacity will apply into the program prior to February 15th, although it can be reasonably assumed that this capacity will be marginal. In addition, there exists approximately 80 MW of market factor-adjusted commercial (>25 kW DC) capacity that has received indefinite extensions for the SREC-II program. These systems are mechanically complete and will begin their SREC production once they receive Permission to Operate (PTO) from their respective utility. We assume in our analysis that 90% of these systems will receive PTO within a year of the closure of SREC-II (November 26th) in equal monthly increments, and the remaining 10% will receive PTO after 12 months. This puts our projected final market factor-adjusted SREC-II capacity at 1,534 MW.
Using these assumptions, as well as DOER’s estimates for exempt load, electric load projections, and SRECTrade’s SREC generation forecast, the 2018 SREC-II market will be undersupplied by approximately 145,500 SRECs, or 8.3% of the exempt load adjusted obligation. As it stands, SRECTrade projects the 2019 SREC-II market will be more balanced with a slight oversupply of 7,600 SRECs, or 0.4% of the exempt load adjusted obligation.
The markets have seemingly digested the fact that the 2018 SREC-II market will be undersupplied, bid at approximately $325 or 93% of the ACP ($350). The 2019 SREC-II market has trended upwards in tandem with the 2018 market, however remains split between the SCCA price ($244) and ACP ($333), currently bid at approximately $290. This reflects our projection of a balanced dynamic in 2019.
Should you have any questions about the enclosed analysis or need transaction and management services, please contact us.
*See 2016 MA DOER RPS and APS Annual Compliance Report page 21 for historic and projected retail electric load figures.
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