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Posts Tagged ‘Massachusetts Solar Credit Clearinghouse Auction’

MA Department of Energy Resources Update 9/27/13

Posted October 7th, 2013 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) sent out an email update on Friday, 9/27/13, covering the management of the SREC I program and the status of the DOER proprosal for an SREC II program. The email can be found here.

SREC I Project Deadline Extension Guidelines Drafted

Less than or Equal to 100 KW

Facilities 100 kW or smaller that have submitted a Statement of Qualification application must receive authorization to interconnect by the “effective date of a new solar carve-out program established by the Department, or by June 30, 2014,  whichever is earlier.”*

*We had previously stated that systems 100 kW and smaller must be fully interconnected by December 31, 2013 in order to participate in the SREC I program.

Greater than 100 kW

Facilities greater than 100 kW may be installed no later than June 30, 2014 as long as they are demonstrably 50% complete by December 31, 2013.

The DOER is accepting comments on the draft guidelines through Monday, 10/7/2013.  Comments may be sent to doer.srec@state.ma.us with the “Solar Construction Guideline Comments” in the Subject field. The DOER’s draft guidelines can be found here.

SREC II Technical Session

The DOER will hold a technical session on Monday, 10/7/2013 to discuss the SREC II proposal with a team of consultants that the DOER has employed to “conduct studies in support of the SREC II program design.” This team of consultants is charged with creating five reports in support of an SREC II program. Two of the five reports are published and available here.

Technical Session Details:

Monday, 10/7/2013 from 1-3 pm
Gardner Auditorium, Massachusetts State House
Boston, MA
 

2012 Solar Credit Clearinghouse “Last Chance Auction” SREC Purchase Results

Only three SRECs of the 38,863 SRECs deposited in the 2012 Solar Credit Clearinghouse Auction (SCCA) were purchased during the auction. Following the auction the DOER offered to purchase all available 2012 vintage SRECs for $285/SREC. The DOER announced that they purchased 36,437 SRECs, leaving 2,426 MA2012 SRECs in the market.

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Round Two of the MA DOER Auction Does Not Clear

Posted July 31st, 2013 by SRECTrade.

The Massachusetts Department of Energy Resources (DOER) announced today, 7/31/2013, that Round Two of its Solar Credit Clearinghouse Auction (SCCA) did not clear. With Round Two not clearing, the compliance requirement for 2014 SRECs is automatically increased by 38,866 SRECs; the amount of SRECs originally deposited in the SCCA. This officially puts the 2014 Massachusetts compliance requirement at 464,520 SRECs. For more information on the SCCA please visit the official website and read our analysis here.

Rounds One and Two were designed to clear only if the bid volume is equal to or greater than the volume deposited into the auction account. Things get interesting with Round Three as the SCCA rules allow for partial fills (i.e. if buyer demand is less than the volume available for sale). Round Three will be held this Friday, 8/2/13. Stay tuned.

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Massachusetts DOER Revises 2014 Compliance Numbers and Announces 2nd Round of SCCA

Posted July 27th, 2013 by SRECTrade.

Following Thursday’s MA DOER email announcing the preliminary 2014 compliance obligation, the DOER sent a follow up email yesterday, 7/26/13, that revised down the 2014 compliance requirement. Additionally, the email announced that the first round of the Solar Credit Clearinghouse Auction (SCCA) did not clear. The SCCA will now go to Round Two on Wednesday, July 31st. Any SRECs deposited in the SCCA are now eligible for three compliance years (2013, 2014 and 2015). The updated web page covering the new compliance obligation can be found here and the updated SCCA page here.

The 2014 minimum standard was revised down because of a calculation error

The DOER revised down the base line 2014 compliance obligation from 498,951 SRECs to 425,654 SRECs. The DOER attributed this downward revision of  73,297 (pre-SCCA results) to an error made in calculating the figures, “whereby the production from Generation Units operating in Q1 2013 was counted twice in DOER’s projection of SRECs that will be generated in 2013.” The revision sets the 2014 requirement to 425,654 SRECs, but if the SCCA reaches Round 3 then the 2014 compliance obligation will be increased to 464,520 SRECs.

The revision means less capacity is needed to meet the 2014 standard

With any compliance obligation announcement in Massachusetts we must adjust our calculations to account for a legal settlement between TransCanada and the DOER. Taking in to account the DOER’s revisions and the TransCanada reduction of 4,369 SRECs from the 2014 compliance obligation, the adjustments equate to 421,285 SRECs prior to any impact from the SCCA. We can convert the compliance obligation to calculate that an average of 363.2 MW or 396.7 MW operational all year long to to produce 421,285 SRECs or 460,151 SRECs depending on whether or not the SCCA reaches the third round. Note, these MW capacity figures only consider retiring 2014 vintage SRECs to meet the compliance obligation. It is possible older vintage SRECs can be used to meet the 2014 requirements, thus further reducing the capacity needed online throughout 2014.

We understand that 245.9 MW is operational (installed through July 25) and qualified for the current SREC program. Depending on whether or not the SCCA reaches the third round, a difference of 117.3 MW or 150.8 MW is needed to be added by the end of 2013 to issue the 2014 SREC requirement. Remember, this assumes the 2014 standard is only met with 2014 vintage SRECs and no additional capacity is added throughout 2014 (likely not the case given oversupply from prior periods and the possibility more MW capacity will be added before the end of 2013 or by June 2014; if eligible). Referencing the recent qualified and pending SQA lists, there are approximately 435 MW eligible but not yet operational. This means that (without taking in to consideration oversupply from previous periods) approximately 25-35% of the eligible, not operational capacity would need to be installed by 12/31/2013  to have enough solar capacity online by the beginning of 2014. See yesterday’s blog post to reference our analysis prior to the DOER’s revision.

The market did not expect round one of the DOER auction to clear

In order for the first round of the SCCA to have cleared today, all 38,866 SRECs needed to be transacted. Since the auction did not clear the SCCA moves to Round Two. The SRECs are now deposited back in to the SCCA with an extended useful life; 2 years increased to 3. Should a third round be needed then the 2014 compliance standard will increase by the number of SRECs originally entered in to the SCCA; 38,866 SRECs. At this point, the new 2014 SREC obligation will be increased to 460,151 net of all compliance exemptions.

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Massachusetts Solar Credit Clearinghouse Auction Explained

Posted July 26th, 2010 by SRECTrade.

MA Energy Year: January 1st – December 31st.

SREC Life: Two years for compliance buyers who may bank up to 10% of their requirement but sellers must sell SRECs in the year they are generated or deposit them in the DOER Auction. So an SREC produced in 2010 can be counted towards the 2010 or 2011 Solar Carve-Out.

When is the last SRECTrade Auction of each Energy Year?

The final SRECTrade auctions will occur in May and June of the following year, immediately before the DOER Solar Credit Clearinghouse last chance auction which closes on June 15th of each year. SRECs are generated quarterly in Massachusetts on a 4-month delay.  SRECs for Q1 (January-March) are available on July 15th and can be sold in auction at the beginning of August. Q2 SRECs are available on October 15th and can be sold in the November auction, Q3 SRECs are available on January 15th and sold in the February auction and Q4 SRECs are available on April 15th and can be sold in the May auction. Any SRECs remaining after the final SRECTrade auction can be entered into the DOER auction.

What happens if at the end of the year I still haven’t sold my SREC(s)?

If you are an SRECTrade client and you have any SRECs that were not sold then SRECTrade will automatically transfer your SRECs to the  DOER Solar Credit Clearinghouse auction.  You do not need to tell SRECTrade to transfer your SRECs if SRECTrade manages your SREC account. SRECs entered into the auction are “Re-Minted” meaning the eligibility of the SREC is adjusted. For example, a 2010 SREC is originally eligible for compliance in 2010 and 2011. If it enters into the DOER auction, the SREC is Re-Minted to be eligible for compliance in 2011 and 2012. It is no longer eligible for compliance in 2010. Buyers may then bid to purchase the SREC to get a start on meeting their requirements for 2011. The DOER auction will be open May 16th to June 15th each year.  SRECs will be sold at a gross fixed price of $300 less a 5% fee resulting in a net price of $285 to any sellers.

Am I guaranteed to sell my SRECs in the DOER Solar Credit Clearinghouse auction?

No, you are not guaranteed to sell your SRECs in the DOER auction. However, it is unlikely that the SRECs don’t sell. If there is an oversupply of SRECs in the DOER auction, the SRECs will all be granted a third year of eligibility and a second auction will be held. So, in our example, the 2010 SREC will now be eligible in 2011, 2012 and 2013. If there still aren’t enough bids to clear all of the SRECs, DOER will increase the requirements to the buyers by the number of SRECs that are available. The buyers bidding in the auction will now be required to purchase more SRECs in 2011. If after this third attempt, there still aren’t enough bids, the SRECs are returned to the owner as Re-Minted SRECs. These SRECs will be more valuable in the open market than any new SRECs that are created. Going back to our example, the original SREC was a 2010 SREC, eligible in 2010 and 2011 before the auction. Once it was entered in the DOER auction, it became eligible in 2011 and 2012. After an unsuccessful DOER auction it was released back to the owner as an SREC eligible in 2011, 2012 and 2013. This SREC now has a 3-year useful life, making it more valuable to a buyer than the new SRECs created in 2011 which only have a 2-year useful life.

If I’m unsuccessful in the DOER auction, how can I be assured that my SREC will still sell above $300?

Following the DOER last chance auction, SRECTrade will resume its monthly competitive auctions. If there was a surplus of SRECs in the DOER auction, they can be immediately listed in the SRECTrade auction the following month and made available to buyers who are now looking to meet their requirements – which have now been increased by the DOER. At this point, buyers will likely resume buying SRECs in the competitive market in order to ensure that they are able to meet their new requirement and avoid the $600 SACP. SREC prices should stay above $300 in the SRECTrade auctions since the DOER auction at the end of the year will guarantee that price.

Why would a buyer of SRECs ever pay more than $300 when they could just wait to buy their SRECs in the Solar Credit Clearinghouse?

Buyers cannot wait for the DOER auction to buy their SRECs for 2010. When an SREC enters the DOER auction, it is stripped of its 2010 eligibility and cannot be used to meet the requirement for the year in which it was generated. The 2010 SRECs placed in the DOER auction can therefore only be used to meet the 2011 or 2012 requirements. Meanwhile, buyers will want to purchase their 2010 SRECs in the competitive market prior to the DOER auction – otherwise they face the $600 fine.

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