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California LCFS Market Sees First Quarterly Credit Surplus Since Q4 2017

Posted May 6th, 2019 by SRECTrade.

On April 30th, the California Air Resources Board (CARB) released Q4 2018 data on the Low Carbon Fuel Standard (LCFS) market in California. Notably, the market saw an LCFS credit surplus of approximately 67k credits, snapping a deficit streak of four straight quarters. Approximately 3.27 million metric tons (MT) of credits were generated in Q4 2018 compared to 3.20 million MT of deficits in the same time frame. This credit surplus can be largely attributed to the uptick in clean diesel substitutes, namely renewable diesel and bio-diesel, which from a volumetric perspective, increased 37.2% and 14.8%, respectively, from Q3 to Q4 2018.

The following chart shows credit production changes for the highest credit-producing fuels in the LCFS market:

Source: CARB

With an average quarter-over-quarter credit increase rate of 9.11% since Q1 2011, the Q4 2018 increase of 16.89% from Q3 2018 is well above the running average. However, when factoring out the increases in renewable diesel and bio-diesel credit generation, overall credit generation only increased 1.45% from Q3 to Q4 2018. As such, monitoring the influx of renewable diesel and bio-diesel in the marketplace will be integral to projecting credit growth over the next few quarters.

The following chart shows deficit changes for the two baseline deficit-producing fuels in the LCFS market:

Source: CARB

While CARBOB and diesel fuels both saw a volumetric and deficit-production decline in Q4 2018, the influx of renewable diesel into the market produced 160k deficits in Q4 2018. This outpaced the deficit decrease in traditional deficit-producing fuels, increasing the overall deficit count by 2.03% from Q3 2018.

The following chart released by CARB illustrates the overall LCFS market trends:

Source: CARB

With a step down in the Carbon Intensity (CI) Compliance Standard in 2019, we will likely see an uptick in deficit production beginning in Q1 2019, barring any major changes in fuel production. The influx of renewable diesel will continue to be a determining market force from both a credit and deficit perspective.

With regards to pricing, in recent weeks, we have seen pricing come off its ~$200 peak after CARB proposed a hard $200 price cap (in 2016 $ indexed for inflation) on the program in a workshop on April 5th. As of recent, CA LCFS spot market pricing has ranged between $180 and $185/credit.

SRECTrade offers LCFS credit management and brokerage services to electric vehicle (EV) fleet operators, OEMs, EV charging station owners, and other asset owners. We help our clients navigate through the entire LCFS process including asset registration, ongoing reporting requirements, transacting, settlement, and remittance of funds. Our domain expertise in environmental commodity markets allows us to provide our clients with industry leading regulatory and market knowledge. Please reach out to cleanfuels@srectrade.com for more information.

Posted in Low Carbon Fuel Standard, SREC Markets |

Pennsylvania Governor Tom Wolf Announces Support For AEPS Expansion

Posted May 3rd, 2019 by SRECTrade.

On Monday, April 29th, Pennsylvania Governor Tom Wolf declared his support for Senate Bill 600 (SB 600). In conjunction, Gov. Wolf released the fourth iteration of the state’s Climate Action Plan, providing recommendations for how the state can mitigate climate change, and also announced that Pennsylvania joined the U.S. Climate Alliance, a bipartisan coalition of 24 states committed to reducing greenhouse gas emissions.

Initially introduced in the Pennsylvania General Assembly on April 10th, SB 600 was referred to the Consumer Protection and Professional Licensure Committee on April 29th. The bill updates the state’s Alternative Energy Portfolio Standards (AEPS) for the first time since the AEPS was established in 2004, calling for four primary changes:

  1. Expand the AEPS Tier I requirement from 8% by 2021 to 30% by 2030
  2. Expand the AEPS solar carve-out from 0.5% by 2021 to 10% by 2030, including 7.5% for grid-supply solar and 2.5% for distributed generation (DG) solar
  3. Minimize rate increases for electricity customers by introducing fixed alternative compliance payment (ACP) schedules and a 15-year SREC eligibility term for solar facilities (beginning on June 1, 2021)
  4. Direct the PA Public Utilities Commission (PUC) to explore a program for renewable energy storage
Table 1.
Table 2.
Table 3.

SB 600’s introduction of solar carve-out compliance categories between “customer-generators” and “non-customer-generators” marks a first for the state. Tables 2 and 3 above display the proposed solar carve-out requirements and solar alternative compliance payment (SACP) schedules between the two respective categories. The bill defines customer-generators as solar facilities that were certified on or before May 31, 2021 and also appears to define them as “behind-the-meter” facilities. Conversely, it appears that non-customer-generators are defined as grid-supply facilities, although the exact definitions of both categories may be subject to change.

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Posted in Pennsylvania, SREC Markets, State RPS |

Massachusetts DOER Releases Straw Proposal on Clean Peak Standard (CPS) Program

Posted April 15th, 2019 by SRECTrade.

On April 2nd, the Massachusetts Department of Energy Resources (DOER) held a stakeholder meeting in which they presented their straw proposal on the new Clean Peak Standard (CPS) Program. As per the DOER, the program’s primary objective is to “implement a clean peak program that aligns clean energy generation and zero emission demand resources with periods of peak electricity demand in the most cost-effective manner for Massachusetts customers possible while reducing emissions.” To effectively achieve this goal, the program intends to couple the co-deployment of energy storage and renewable resources with demand response resources to help flatten the electric load curve and reduce overall emissions from the electricity sector.

The proposal lays out four separate eligible CPS resources:

  1. New RPS Class I resources in operation on or after January 1, 2019
  2. Existing RPS Class I/II resources (in operation prior to January 1, 2019) that are paired with an energy storage system
  3. Standalone energy storage systems
  4. Demand response resources

Eligible resources would be able to generate Clean Peak Certificates (CPCs) during predefined Seasonal Peak Periods. Each season would have a defined, 4 hour daily peak period in which CPCs could be generated. CPCs would be minted on top of any other Renewable Energy Credit (REC) that the asset produces.

The DOER did not provide details on key program metrics and guidelines in their proposal including price support mechanisms, metering requirements, and tracking and verification process. These parameters will be established once the DOER’s contracted consultants provide further analysis support. The DOER requested that stakeholders submit comments on the proposal by April 12th and they plan to release a draft regulation by the end of Q2 2019.

Posted in Massachusetts, SREC Markets |

IL ABP Marketing Guidelines Training – Webinar

Posted April 9th, 2019 by SRECTrade.

Earlier today, SRECTrade hosted a training webinar for its Illinois Adjustable Block Program (ABP) partners. Among other topics, the webinar reviewed the ABP’s Distributed Generation (DG) Final Guidelines for Marketing Material and Marketing Behavior. SRECTrade requires its partners to review the Final Marketing Guidelines in full to ensure that they are compliant with ABP consumer protection requirements. There is a separate set of guidelines that govern ABP community solar facilities.

For access to the presentation slides, please click HERE. To view a video recording of the webinar, please click the image below.

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Posted in Illinois, Installers, SREC Markets, Webinars |

Maryland General Assembly Passes the Clean Energy Jobs Act (CEJA)

Posted April 9th, 2019 by SRECTrade.

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.

Posted in Environmental Policy, Maryland, SREC Markets |

Massachusetts DOER Files Alternative Portfolio Standard (APS) Emergency Rulemaking

Posted April 9th, 2019 by SRECTrade.

On 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.

Posted in Environmental Policy, Massachusetts, SREC Markets |

Illinois Adjustable Block Program Discretionary Capacity Allocation

Posted April 5th, 2019 by SRECTrade.

April 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:

  • Group A Small – Block 1
  • Group A Large – Block 4
  • Group B Small – Block 1
  • Group B Large – Block 2

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.

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Posted in Illinois, SREC Markets |

Maryland Clean Energy Jobs Act Continues to Get Support / Passes Maryland Senate

Posted March 28th, 2019 by SRECTrade.

Last 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.

Posted in Maryland, SREC Markets |

SRECTrade Expands Eligible Solar Generation Auto-Reporters to Include eGauge and Fronius Integrations

Posted March 21st, 2019 by SRECTrade.

SRECTrade 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).

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Posted in Installers, Solar Equipment |

California Low Carbon Fuel Standard (LCFS) Market Overview and Pricing

Posted March 18th, 2019 by SRECTrade.

Overview

Pursuant 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.

Quick Facts

Compliance Obligations

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.

California Carbon Intensity Compliance Schedule; Source: California Air Resources Board (CARB)
Source: California Air Resources Board (CARB)

Pricing

Source: California Air Resources Board (CARB) as of March 10, 2019

SRECTrade’s Clean Fuels Management Services

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.

Posted in Low Carbon Fuel Standard |

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