Delaware SREC Alert!

The first Delaware SRECs for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. DE SRECs are generated on an energy year basis which runs from Jun 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific SREC vintages are attributable to two factors: 1) the estimated future value of compliance payments. 2) the potential signing of an increased solar requirement law. SRECs are valid for RPS compliance for the year generated and the following 2 years. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for 2010 DE SRECs have softened recently due to more buyer interest in 2011 DE SRECs.
 
The Flett Exchange trading platform allows for the simultaneous listing of multiple vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.

Pennsylvania SREC Alert!

The first Pennsylvania SRECs/Alternative Energy Credits (AECs) for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. PA SRECs are generated on an energy year basis which runs from Jun 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific vintage SRECs are attributable to the estimated future value of compliance payments (this is currently 200% of the sum of the “market value” of solar AECs) or a lower fixed payment as described in proposed house bill 2405. SRECs are valid for RPS compliance for the year generated and the following 2 years. Some energy suppliers will be limited to the amount of vintages according to when they were required to comply. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for 2010 PA SRECs have softened lately due to more buyer interest in 2011 PA SRECs.
 
The Flett Exchange trading platform allows for the simultaneous listing of multiple vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.

New Jersey SREC Alert!

The first New Jersey SRECs for the 2011 Energy Year (vintage) will be created by PJM-GATS on Friday, July 30, 2010. New Jersey SRECs are generated on an energy year basis which runs from June 1 to May 31. Values for 2010 vintage SRECs differ from the values of 2011 SRECs. Valuation differentials between specific vintage SRECs are attributable to two factors: 1) the penalty or Solar Alternative Compliance Payment (SACP) decreases 3% per year. 2) SRECs are now valid for RPS compliance for the year generated and the following 2 years. 2010 SRECs are currently good for 2 years and may be good for 3 if the New Jersey Board of Public Utilities (BPU) approves it. This will most likely make newer energy years worth slightly more due to the longer “bank ability”. Sellers will have to check which energy year SRECs they have before they sell them on Flett Exchange. Prices for the next 30 to 45 days for 2010 EY SRECs will remain $30 to $50 higher than the new 2011 SRECs created. After qualified buyers have finished buying 2010 vintage SRECs and start their compliance filing which is due at the end of September, the prices for 2010 SRECs will trend closer to the 2011 vintage value. It is estimated that the EY 2011 SRECs will start trading in the $620 to $640 range.
 
The Flett Exchange trading platform allows for the simultaneous listing of multiple SREC vintages. Our transparent and competitive trading platform ensures that our buyers and sellers achieve the market value for their SRECs at the most competitive rate in the industry. Our brokers are available to answer any questions that you have at 201-209-0234.

New York Gears Up for Solar Energy

   New York has the opportunity to become one of the nation’s leading solar states. The Empire State is pursuing a solar measure that could stimulate the economy, create permanent jobs, establish a new manufacturing base, reduce climate change, increase sustainability, and preserve precious natural resources that over 20 million New Yorkers depend upon daily. The New York Solar Industry Development and Jobs Act of 2010 has been introduced to the state assembly and senate. The bill would responsibly require investor owned utilities (IOUs) and public power authorities to gradually incorporate solar electricity in their energy mix over the next 15 years. In 2009, New York installed only 34 Megawatts of solar electricity. This proposed solar measure would increase the statewide installed capacity to at least 5,000 Megawatts and assist New York in achieving its clean energy goals at the lowest cost to the ratepayer.

 
   New York has always been a gateway for new ideas and progress. The solar industry, environmentalists, and conservation groups are calling on government officials to act on a solar plan which can deliver serious results. The New York Solar Energy Industries Association (NYSEIA) is “calling on Governor David Paterson, the State Legislature, and the Public Service Commission (PSC) to immediately take needed actions to put the state on target to reach its goals of meeting 45 percent of the state’s electricity needs through the improved efficiency and clean renewable energy by the year 2015.” (NYSEIA Proposes Long-Term Solar Electric Incentive Plan, 7/2/2010).
 
The proposed solar bill could benefit New York in the following ways:
 

  • Economic Growth- Proponents of the New York solar act exclaim that it could generate $20 billion in economic stimulus over the next 15 years. This comes at a time when the state deficit is at alarming levels (over $8 billion) and at risk of a double-dip recession.
  • Green Jobs- The solar industry has been steadily adding real jobs nationwide and providing competitive salaries to the US workforce (i.e. the average salary for solar jobs is $61,000 depending on the company, location, and experience.) The New York Solar Industry Development and Jobs Act of 2010 is estimated to support 22,000 new jobs.
  • Solar Manufacturing Plants are coming to New York- Solar manufacturing factories are being established in upstate New York. This is an enormous win for New York and one that needs to continue. New York has the ability to attract emerging industries and provide a fertile environment for world-class solar technology, research, and development companies.
    • SpectraWatt- a manufacturer and supplier of advanced silicon photovoltaic cells has recently opened its solar factory in Hopewell Junction, NY. SpectraWatt’s $81 million investment will create a state-of-the-art facility and bring 161 new jobs to Dutchess County, NY. The facility will be capable of producing over 50 million solar cells annually which is enough to power 35,000 homes.
    • Solartech Renewables- is opening a $10 million production facility in Ulster County, New York. When completed in 2010, the “Tech City” complex will create 100 new full time permanent jobs and produce 12 Megawatts or 55,000 solar panels utilizing technology from the Spire Corporation.
  • Solar for All- Solar is a level playing field in which all parties can participate. Unlike other renewable energies (i.e. wind, biomass, and geothermal) which can be difficult to develop and only achievable on a larger scales solar is affordable and equally available to homeowners, schools, universities, townships, municipalities, corporations, and government agencies.
  • What a “Fracking” Mess- Unregulated natural gas drilling is being seriously considered in the New York, Pennsylvania, and Delaware watershed regions. “Hydraulic fracturing or fracking is a means of natural gas extraction employed in deep natural gas well drilling. Once a well is drilled, millions of gallons of water, sand, and proprietary chemicals are injected, under high pressure, into a well. The pressure fractures the shale and props open fissures that enable natural gas to flow more freely out of the well.”(www.gaslandthemovie.com) Natural gas fracking has destroyed ecological systems and contaminated the water supplies of many parts of Arkansas, Colorado, Kentucky, Louisiana, Montana, Nebraska, Texas, and Wyoming.
    • Flammable tap water – that’s what people across the US have discovered in the wake of the unconventional method of natural gas extraction known as hydraulic fracking.
    • The 65 compounds that are used in natural gas drilling are harmful to human health.
    • 80,000 pounds of chemicals are injected into the earth’s crust to frack each natural gas well.
    • 70% of the fracking fluid that remains in the ground is not biodegradable.
    • A loophole in the 2005 Energy Bill exempts natural gas drillers from following EPA guidelines like the Clean Water Act. Natural gas fracking is totally unregulated and will begin in New York unless state legislature acts immediately.

 
   Solar energy is the responsible and viable energy solution for New York. It allows the state to meet its Renewable Portfolio Standard (RPS) in an efficient and healthy manner. Solar energy does not contaminate the water supply nor proposes harmful health risks to New Yorkers. The question New Yorkers should be asking their legislators is “does New York need a self-inflicted Gulf Oil Disaster?”
 
   Solar Renewable Energy Certificates (SRECs) have also been incorporated in the proposed solar bills. SRECs are a proven market based solution that augments solar development and financing. SREC markets have remained vibrant even as state incentives and rebates have diminished or terminated. One SREC is equal to 1,000 kilowatt hours of solar electricity and is typically purchased by utilities and energy companies who need to comply with a state mandated Renewable Portfolio Standard (RPS). State mandated SREC markets successfully operate in DE, OH, PA, MA. MD, NJ, and Washington DC and fluctuate pricing ($250.00 – $693.00). SRECs are the driving financial component that makes solar economically feasible. SREC markets promote free market competition and reward participants who take renewable energy risk with a revenue stream from SREC monetization. SRECs could incentivize New Yorkers to install solar provide a market mechanism that delivers proven results.
 
   Now is the time for New York to become a leader in solar energy. New York is the United States third most populous state, yet its solar industry lags neighboring states. In 2009 New York installed less than 35 MW or 1,200 photovoltaic systems compared to New Jersey’s 181 MW or 6,281 installed photovoltaic systems. New Yorkers need to reclaim their energy independence. Instead of depending on expensive foreign oil or harmful natural gas, government officials can implement a renewable energy policy with an increased solar carve-out that would immediately benefit the state. An aggressive Renewable Portfolio Standard (RPS) would demonstrate that New York is serious about clean energy, the health of its residents, and illustrate its environment stewardship to the rest of the nation. Solar energy is the smartest, safest, and quickest way for New York State to achieve its renewable energy goals. Solar energy can elevate the environmental consciousness of the Empire State and responsibly benefit our two most prized possessions: the earth and mankind.

Delaware Set to Boost RPS

June 29th, 2010 –

   The Delaware House of Representatives has passed the latest revision of SB 119, entitled “AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO THE RENEWABLE ENERGY PORTFOLIO STANDARDS” by a margin of twenty-six to seven. The latest in a series of energy bills, Substitute 1 for SB 119 extends and increases Delaware’s RPS, raises penalties for non-compliance, and requires municipal electricity suppliers and rural cooperatives to submit their own plans for renewable energy, shall they choose to exempt themselves from the program. Already passed by the Senate, the bill is now awaiting the signature of Governor Jack Markell.

 
   After the bill is signed into law, the current RPS of 20% by 2019 with 2.005% minimum from solar will be increased to 25% by 2025 with 3.5% from solar. Additionally, the Alternative Compliance Penalty will be raised from $250 to $400 per MWh, with the $50 annual increase for non-compliant utilities remaining in effect. This comes as welcomed news for Delaware’s home-grown solar industry and residents, who depend on incentive programs to spur new installations. Short-term solar targets are also slated to increase, with new targets of .2% by 2011 and .354% by 2014 going into effect.
 
   The bill also incentivizes locally-sourced solar. It provides an additional 10% credit toward RPS compliance for SRECs produced by solar facilities that were built using at least 75% in-state labor or consist of at least 50% in-state manufactured components. These provisions demonstrate Delaware’s commitment adopting clean energy while still fostering a robust home-grown solar industry.
 
   Also, new provisions have been added to allow state energy coordinators to adjust the ACP by as much as 20% “to determine reasonableness compared to market-based SREC prices” and another that allows the solar requirement to be frozen all together if the total cost of compliance exceeds 1% of the retail cost of electricity. These amendments demonstrate Delaware’s willingness to provide better incentives for going green while still safeguarding against unreasonable rate hikes.
 
   Delaware’s amendments echo similar legislation in neighboring Maryland, which has recently expanded its own renewable energy portfolio, and demonstrates a growing trend all over the United States toward fostering growth in renewable energy. Delaware and other PJM states are leading the way in creating effective renewable energy programs, striking a balance between increasing clean energy while still protecting tax payers from unfair rate hikes.
 
SB 119 – Original, Delaware.gov Legis Home Page:
http://legis.delaware.gov/LIS/lis145.nsf/vwLegislation/SB+119/$file/legis.html?open
http://legis.delaware.gov/LIS/LIS145.NSF/7712cf7cc0e9227a852568470077336f/6b0482f3610e0c11852575750058d5a8?OpenDocument
 
SB 119 – Substitute 1, Delaware.gov Legis Home Page:
http://legis.delaware.gov/LIS/lis145.nsf/vwLegislation/SS+1+for+SB+119/$file/legis.html?open
http://legis.delaware.gov/LIS/LIS145.NSF/b51f4b5053c30a5c852574480048057a/a189cc0072f401998525771300660055?OpenDocument

Township of Verona Solar Renewable Energy Certificate (SREC) Public-Auction Results

      Flett Exchange is pleased to announce the results of the Township of Verona Solar Renewable Energy Certificate (SREC) public-auction. 79 Energy Year 2010 New Jersey SRECs were sold at a clearing price of $675.00. The sale was conducted on Flett Exchange’s online, transparent environmental exchange under its “Public-Auction SREC Market” and total market proceeds equaled $53,325.00. Qualified buyers and the public could observe the bidding in real time by logging in to Flett Exchange.
      The $675.00 clearing price is 97.4% of the $693 Alternative Compliance Payment (ACP). The ACP is the payment electric producers have to pay to the State of New Jersey if they do not produce a specified amount of electricity using solar energy or through the purchase of SRECs from facilities located in New Jersey. This activity supports solar development in New Jersey and SREC revenue goes to entities that take risk in developing solar facilities.

Proposal to Extend and Expand Federal Renewable Energy Grants Until 2012

      June 15, 2010, WASHINGTON DC — — U.S. Senators proposed extending the 30% federal cash grants to renewable energy developers for another two years. Passed as part of the “2009 Recovery and Reinvestment Act”, Section 1603 gives 30% cash grants in lieu of investment tax credit (ITC) to renewable energy developers. Set to expire at the end of this year, the proposal would extend the Treasury-Department-issued grants until 2012. Though other Recovery Act programs have helped provide liquidity to the renewable energy, extending these cash grants is seen as vital to ensuring new solar, wind, and geothermal projects continue being installed across the United States.
      Prior to the “2009 Recovery and Reinvestment Act”, a 30% tax credit was given to renewable energy developers to incentivize projects. Developers then sought tax-equity partners in order to provide initial project funding. While large Wall Street banks were able to provide tax-equity services before the financial crisis; after credit markets dried up, cash grants were needed to spur continued growth in renewables. By giving developers direct access to capital, the grants provide crucial start up funding for renewable energy projects, which can run into the millions of dollars.
      The proposal comes in the form of an amendment to the “tax extender” portion of a $140 billion dollar federal unemployment and tax break extension package currently being deliberated in Congress. Six democratic senators, including Dianne Feinstein of California and Maria Cantwell of Washington, introduced the legislation last Tuesday. According to Feinstein, “The clean energy sector is the next frontier in jobs creation, so we need to ensure that developers can access financing to launch wind, solar and geothermal projects and put people to work.”
      The current grant program is credited with helping keep U.S. wind, solar, and geothermal markets afloat after the financial crisis evaporated many sources of funding for renewable energy developers. Now, industry insiders and analysts agree that the proposed extension is crucial to avoid a possible slowdown. The senators did not specify the exact cost of the latest bipartisan proposal but said it would be minimal and will help to “jumpstart” a transition to clean energy.
      It’s likely that as the grant-expiration deadline nears the federal government will act swiftly on the measure to prevent renewable energy sector from suffering a slowdown. The reliable funding provided from these incentives is vital to continued expansion and adoption of renewable energy in the United States. If this measure is passed, growth in renewables should continue to accelerate and increase as well as spur job creation in this important sector.
More about Flett Exchange:
      Flett Exchange operates a continuous, real-time trading platform where users can buy and sell solar renewable energy credits (SRECs). Flett Exchange offers long-term SREC contracts, public-auction services, power purchase agreements (PPAs), request for proposals (RFPs), voluntary REC markets, and solar consulting services for its clients. A pioneer in renewable energy markets, Flett Exchange has been publishing daily SREC settlement prices and other market data since 2007 bringing transparency, standardization, and fairness to renewable energy markets.
 
Source(s):

http://www.greentechnologydaily.com/energy/576-proposal-would-extend-cash-grant-for-renewables-to-2012

http://www.govtrack.us/congress/bill.xpd?bill=s111-2899

http://www.foxbusiness.com/story/markets/industries/utilities/senators-propose-extending-renewable-energy-grant-program/

Future of Connecticut Energy Financing Bill Remains Uncertain After Veto

      The Connecticut State Senate and House of Representatives passed State Bill 493 recently, but a veto from the Nutmeg State’s republican governor, M. Jodi Rell, has state democrats scrambling for votes to overturn her decision. Rell says the Bill, entitled “AN ACT REDUCING ELECTRICITY COSTS AND PROMOTING RENEWABLE ENERGY”, will accomplish neither of its two stated goals.
      Fed up with the nation’s second highest electric rates (Hawaii is number one), Connecticut residents, businesses, and municipalities are frustrated with their state government’s reluctance to provide relief. The Bill, a revised version of an earlier piece of legislation (SB 463), aims to cultivate Connecticut’s home-grown clean-energy industry by incentivizing energy efficiency, providing loans for investment in renewables, and subsidizing clean-generation with grants for residents, businesses, and municipalities. Among some of the Bill’s more ambitious objectives is a promise to install a minimum of 30 Megawatts of residential solar PV by the end of 2021, and financing for a tariff fund to subsidize up to 50 Megawatts of utility-scale solar PV capacity.
      The Bill would give municipalities new powers, allowing them to create loan programs and issue bonds in order to promote renewables and energy efficiency. It would also loosen requirements for a $200-500/kilowatt grant on “distributed resources”, such as on-site solar PV. Currently, the grants are only given if the project results in a reduction in Federally-Mandated Congestion Charges (FMCCs), a fee associated with interstate electrical transmission.
      In addition to removing the FMCC eligibility clause mandated in 2005, the Bill would cap the grant at $200/kilowatt for installers and $250/kilowatt for electric companies, decreasing down to $25 in 2013. The Bill also seeks better coordination between electric companies, businesses, municipalities, financing, and regulatory agencies. It also calls for more frequent compliance auditing, and the creation of a yet unnamed agency to review and approve guidelines for the new programs.
      The original proposal, SB 463, sought to fund the new loan programs by lowering Connecticut’s RPS and transferring the savings electricity companies would gain as a result into a special account used to subsidize the loan programs. But last minute changes to the Bill preserved incentives for energy efficiency, Combined Heating & Power (CHP), and solar PV, but removed the RPS reductions (Summary Section “B” Highlighted in YELLOW), leaving the original target of 20% by 2020 intact.
      The amended Bill, SB 493, was passed by an 81-40 vote in the Connecticut House and a 20-14 vote in the State’s Senate. Whether the democrats in the senate can rally enough votes to overturn the Governor’s veto remains to be seen. Until then, the future of Connecticut’s renewable energy program is uncertain.
 
Source(s):
http://www.cga.ct.gov/2010/TOB/S/2010SB-00463-R00-SB.htm (Full-text SB463)
http://www.cga.ct.gov/2010/TOB/S/2010SB-00493-R00-SB.htm (Full-text SB493)
http://www.cga.ct.gov/2010/VOTE/S/2010SV-00324-R00SB00493-SV.htm (Senate Vote)
http://www.cga.ct.gov/2010/VOTE/H/2010HV-00214-R00SB00493-HV.htm (House Vote)
http://www.cga.ct.gov/2010/rpt/2010-R-0178.htm (Summary)

California TREC Market

      The California Public Utilities Commission (CPUC) has unanimously approved the use of renewable energy credits for compliance with the California Renewables Portfolio Standard (RPS). The CPUC’s decision has authorized the procurement and transaction of tradable renewable energy credits (TRECs). The objective of the TREC market is to encourage renewable energy development and help California satisfy its progressive Renewable Portfolio Standard.

      The CPUC has outlined a market and compliance structure that promotes a transparent, fair, and easily operational TREC market. The Commission’s most significant proceeding was their decision to distinguish between bundled (energy plus renewable energy credits) and unbundled (renewable energy certificates only) transactions used for RPS compliance. Bundled transactions “must serve California customer load, without needing any intermediary energy transactions that in effect substitute energy that is not RPS-eligible for energy that is. The decision concludes that bundled transactions with renewable energy—or those which serve California customer load – are those where:

  • the RPS-eligible generator’s first point of interconnection with the Western Electricity Coordinating Council (WECC) interconnected transmission system is with a California balancing authority, or
  • the RPS-eligible energy from the transaction is dynamically transferred to a California balancing authority.” 3/11/10, Decision Authorizing Use of Renewable Energy Credits for Compliance with the California Renewables Portfolio Standard.

      The CPUC’s decision to separate the electricity commodity from the environmental attribute allows Load Serving Entities (LSEs) to use TRECs to comply with California’s growing renewable energy requirements. Creating two separate tradable commodities is advantageous to renewable energy development because the TRECs can help subsidize the financing and development of renewable energy projects.
      The CPUC has also disclosed a few important amendments that buyers and sellers of TRECs should pay close attention to:

  • A 40% to 25% decrease in the amount of RECs that Investor-Owned Utilities (Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric) can pledge toward their annual RPS compliance obligation.
  • Bundled transactions for out-of-state facilities will be re-classified using firming and shaping as TREC specific transactions and be included in the 25% cap.
  • The introduction of a $50 cost cap for TREC transactions. Contracts exceeding this limit will not be approved by the CPUC. (Alternative Compliance Payments (ACP) have been lifted, increased, or extended in other REC states over time.)
  • The CPUC has the ability to modify or extend their decision before December 31, 2011.
  • The Western Renewable Energy Generation Information System (WREGIS) will assist in the tracking and retirement of TRECs. “TRECs must be tracked in WREGIS and retired in WREGIS for RPS compliance within three calendar years of the year of electricity associated with the TRECs.” 3/11/10, Decision Authorizing Use of Renewable Energy Credits for Compliance with the California Renewables Portfolio Standard.

      The CPUC’s decision regarding TRECs is being viewed as a significant policy statement. However the CPUC is not the only governing body deciding on TREC matters. The CPUC will be working collaboratively with the California Energy Commission (CEC) to serve in the implementing and overseeing California’s RPS. “The CEC and CPUC are expected to serve in advisory roles to help the CARB (California Air Resources Board) develop the regulations to administer the 33% by 2020 requirement… until the CARB regulations are adopted, the CEC and CPUC will continue serving in their current roles to administer the 20% by 2010 standard:
The CEC’s roles are to:

  • Certify eligible renewable resources that meet statutory requirements; and
  • Design and implement a tracking and verification system to ensure that renewable energy output is counted only once for the purpose of the RPS and for verifying retail product claims in California or other states”. (California Incentives/Polices for Renewable & Efficiency, DSIRE).

      On May 6, 2010, the CPUC placed a temporary stay on their March decision and a moratorium on TREC transactions. Hopefully going forward the CPUC and the CEC can work together for the betterment of California’s renewable energy policy, which has the potential to be the largest US tradable REC market.
      Flett Exchange looks forward to adding value to the California environmental markets. As a leading exchange for state-mandated and voluntary REC markets, Flett Exchange will bring liquidity, transparency, and price discovery to spot and long-term TRECs. Our team of skilled market professionals offers supply and demand intelligence, legislative commentary, forward pricing projections, and in-depth market research. With California taking a leading role in clean energy development, Flett Exchange looks forward to supporting the TREC market and providing guidance so that the masses can fully informed and benefit from renewable energy.