IL 2017 DG Procurement Round Two Webinar

Posted August 15th, 2017 by SRECTrade.

SRECTrade, Inc. will be hosting a webinar covering the upcoming IL 2017 DG Procurement Round Two on Monday, August 21st, at 1:00pm CST. The October procurement round is the second of two rounds scheduled for 2017.

To register for the webinar, please click HERE.

Our application window for Round Two is open from Monday, August 21st to Friday, September 8th at 5:00pm CDT.

For more information on the upcoming procurement round beforehand, please visit our blog post on the topic here.

MA DOER Files Proposed Final Version of SMART Program Regulation

Posted August 11th, 2017 by SRECTrade.

On Friday, August 11th, the Massachusetts Department of Energy Resources (DOER) announced that it has filed its proposed final version of the Solar Massachusetts Renewable Target (SMART) Program regulation 225 CMR 20.00 with the Secretary of the Commonwealth’s Office. The DOER anticipates the final version will be published in the State Register on August 25, 2017, “with minimal to no changes”. The final but unofficial version of the regulation can be found on the DOER’s “Development of the Solar Massachusetts Renewable Target (SMART) Program” website here.

100 MW Procurement

Following comments regarding the initial 100 MW Procurement, which will be used to establish Base Compensation Rates for all participating SMART Solar Tariff Generation Units, the following changes were made to program design:

  • Each Distribution Company will issue one procurement for all projects sized 1 – 5 MW
  • All facilities in the procurement will be subject to a Ceiling Price of $0.17/kWh ($170.00/MWh)
  • Procurement results will establish unique Base Compensation Rates for the first Capacity Block of each individual Distribution Company, rather than establishing a single statewide Base Compensation Rate
  • The Base Compensation Rate for the first Capacity Block will equal the mean bid price received in each Distribution Company’ service territory

Compensation Rate Adder Caps and Rate of Decline

In its regulation filed on June 5, 2017, the DOER implemented an adder cap of 320 MW for each individual Compensation Rate Adder in an effort to “place boundaries around overall program costs”. In response to comments regarding these adder caps, the following changes were made:

  • Adder caps are eliminated
  • Each Compensation Rate Adder will decline by 4% for every capacity tranche established, and the Adder will not decline as Capacity Blocks are filled. The first capacity tranche for each Adder will equal 80 MW, with future segment sizes established by the DOER as they are filled

Project Segmentation

Following comments regarding the rules set forth by the DOER around parcel limits and project segmentation, the following modifications were made:

  • Added Canopy Solar Tariff Generation Units to allowable exceptions to rules, allowing canopies to be sited on same parcel as a Building Mounted Solar Tariff Generation Unit
  • Allow Solar Tariff Generation Units to be sited on adjacent parcels if owners can demonstrate to the DOER’s satisfaction that they are unaffiliated parties
  • Allow Solar Tariff Generation Units to span multiple parcels if located behind a single interconnection point, single meter, with a nameplate capacity of 5 MW or less
  • Added language to exempt projects from project segmentation rules if the applicant can demonstrate that necessary qualification documents were obtained by June 5, 2017
  • Added language that allows the DOER to exempt projects from project segmentation rules for good cause on a case by case basis

These project segmentation rules were initially established to prevent Solar Tariff Generation Units from manipulating program rules for their own financial benefit.

Land Use and Performance Standards

The DOER has also set forth rules to ensure that land use is considered when siting projects through the differentiation of incentive levels based on project location. In response to comments regarding these rules, the following changes were made:

  • Removed certain special provisions for Agricultural Solar Tariff Generation Units from the regulation; instead, these provisions are detailed in a separate Guideline
  • Added definition and special provisions for Floating Solar Tariff Generation Units, with an associated $0.03/kWh Compensation Rate Adder
  • Added language to exempt projects from being subjected to Greenfield Subcontractors if the applicant can demonstrate that necessary qualification documents were obtained by June 5, 2017
  • Classified all land that had been previously categorized as Category 1 Land Use, regardless of zoning
  • Clarified aspects of the performance standards requirements

Other

In response to other comments received by stakeholders, the DOER also instituted the following changes:

  • Modified definitions of Community Shared Solar Tariff Generation Unit, Low Income Community Shared Solar Tariff Generation Unit, and Low Income Property Solar Tariff Generation Unit to clarify that Units will qualify as such if taking advantage of the alternative on-bill credit
  • Established a 35% per Capacity Block limit on the quantity of facilities with a nameplate capacity of less than or equal to 25 kW
  • Added language prohibiting capacity expansions, with specific exceptions
  • Provided further clarity regarding customer disclosure forms and added requirements regarding forms to special provisions for Community Shared Solar Tariff Generation Units and Low Income Community Shared Solar Tariff Generation Units
  • Modified timing of initial competitive procurement
  • Modified formula for calculating the incentive payments for Behind-the-Meter Solar Tariff Generation Units to be the sum of the three-year average of Basic Service Charges, in addition to current Distribution, Transmission, and Transition charges
  • Other technical updates and clarifying modifications

The DOER will notify stakeholders when the regulations have been published in the State Register in final official form.

MA Global Warming Solutions Act Regulations Promulgated

Posted August 11th, 2017 by SRECTrade.

On Friday, August 11th, the Massachusetts Department of Environmental Protection (MassDEP) published six final regulations to reduce statewide greenhouse gas emissions in the Massachusetts Register. These regulations follow the Supreme Judicial Court’s May 17, 2016 ruling in Kain v. DEP and Governor Baker’s September 16, 2016 Executive Order No. 569 (“Establishing an Integrated Climate Change Strategy for the Commonwealth”) to help ensure compliance with the 2020 statewide emissions limit established by the Global Warming Solutions Act (GWSA).

The six regulations and amendments include:

  • 310 CMR 7.72: Reducing Sulfur Hexafluoride Emissions from Gas-Insulated Switchgear (amended)
  • 310 CMR 7.73: Reducing Methane Emissions from Natural Gas Distribution Mains and Services (new)
  • 310 CMR 7.74: Reducing CO2 Emissions from Electricity Generating Facilities (new)
  • 310 CMR 7.75: Clean Energy Standard (new)
  • 310 CMR 60.05: Global Warming Solutions Act Requirements for Transportation (amended)
  • 310 CMR 60.06: CO2 Emission Limits for State Fleet Passenger Vehicles (new)

For more information on these regulations, including Fact Sheets, please visit the MassDEP website on the topic.

MA Solar Credit Clearinghouse Auction Result Announcement

Posted July 24th, 2017 by SRECTrade.

On July 24th, 2017, the Massachusetts Department of Energy Resources (DOER) announced that all of the MA2016 SREC-Is and SREC-IIs submitted to the auction account were transacted in the first round of the Solar Credit Clearinghouse Auction (SCCA). A total volume of 195,464 SREC-Is were bid on across 34 unique bidders, creating more than sufficient demand to clear the available auction volume of 18,428 SREC-Is.

The SREC-II auction followed suit, with a total bid volume of 303,956 across 11 unique bidders outweighing the available auction supply of 243,377 SREC-IIs.

DOER and EnerNOC are in the process of certifying and finalizing the auction results. More information will be made available on the SCCA auction page in the coming weeks.

If SRECTrade submitted SRECs to the SCCA on your behalf, we will provide further notice on the status of your transaction once the DOER and EnerNOC provide us with finalized auction results.

Massachusetts DOER Preliminary 2018 Compliance Obligation Announcement

Posted July 20th, 2017 by SRECTrade.

On Wednesday, July 19th, the Massachusetts Department of Energy Resources (DOER) announced the preliminary Minimum Standards and Compliance Obligations for 2018 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II). The DOER notes that these numbers only represent preliminary estimates and final numbers will be released no later than August 30th.

SREC-I

Based on current load capacity projections, the DOER estimates that the 2018 Compliance Obligation and Minimum Standard for the SREC-I Program will be approximately 838,995 MWh and  1.7903%, respectively, for load served under contracts on or after June 28, 2013.  If the 2017 SREC-I auction does not fully clear, these values will be increased to 857,423 MWh and 1.8296%, respectively.

For load served under contracts executed before June 28, 2013, the 2018 Minimum Standard will be 1.1411%.

SREC-II

The DOER estimates that 2018 Compliance Obligation and Minimum Standard for the SREC-II Program will be 1,347,902 MWh and 2.8762%, respectively, for load served under contracts before May 8, 2016. If the auction does not fully clear, these values will be increased to 1,591,279 MWh and 3.3955%.

To calculate this baseline Minimum Standard and Compliance Obligation, the DOER first determined the expected MWh/year that would have resulted had the SREC-II Program Capacity Cap remained 947.7 MW by:

  1. Identifying the percentage share of MW capacity currently qualified under each SREC-II Market Sector;
  2. Multiplying these percentages by the original 947.7 MW SREC-II Program Capacity Cap;
  3. Multiplying these totals by (1) their respective SREC Factors, (2) a 13.71% expected capacity factor, and (3) 8,760 hours/year.

The DOER then summed these values and combined the remaining auction volumes and banked SREC-II volume from the 2016 Compliance Filings resulting in a total baseline Compliance Obligation and Minimum Standard.

In addition, the DOER estimates the Compliance Obligation and Minimum Standard for load contracts signed after May 8, 2016 to be 1,923,743 MWh and 4.1049%. respectively. If the auction does not fully clear, these values will be increased to 2,167,120 MWh and 4.6242%, respectively.

The official announcement can be found here.

2017 DE SREC Procurement Results

Posted July 14th, 2017 by SRECTrade.

On July 12, SRECDelaware announced the results of the Delaware 2017 SREC Procurement auction. Delaware’s SREC Procurement Program allows for facilities to secure 20-year SREC contracts with Delmarva Power through a competitive bidding process. Delmarva holds auctions every spring separately from the open-market SREC transactions that occur on an ongoing basis.

SREC contracts awarded through the procurement are allocated according to different capacity-based “tiers”. In previous years, the auction consisted of three tiers for new systems and two tiers for existing systems. This year’s SREC procurement introduced two new tiers, representing systems over 2 MW for new and existing systems, respectively.

In this year’s Spring Procurement, Delmarva Power purchased 20,000 SRECs at the following price levels:

de-auction-results-2017

Notes

1. The highest successful bid price at each respective tier.
2. The lowest successful bid price at each respective tier.
3. The weighted average bid price of all successful bids at each respective tier.

As a whole, the 2017 Procurement was oversubscribed, as an excess of bids were submitted to the auction due to oversupply of solar in the market. In effect, the overall weighted average bid price dropped to $21.26 from last year’s $66.56.

We expect oversupply to remain an issue in the DE SREC market and with it, suppressed SREC values in the DE open-market, pending a major policy change in the state. As always, our team will continue to work closely with Delmarva Power and policymakers to ensure our clients get the best value for their SRECs in the open market.

 

SRECTrade at the Environmental Markets Association – Chicago Round Table: Illinois RPS Update

Posted July 7th, 2017 by SRECTrade.

On June 21, 2017, members of the SRECTrade team attended the Environmental Markets Association (EMA) round table event in Chicago.   The event featured presentations and discussions on a variety of environmental issues and new developments in Illinois environmental markets.   SRECTrade’s Manager of Business Development and Operations, Tom MacKenty was invited to speak about the new IL RPS and upcoming Adjustable Block Program.

Tom’s full presentation can be viewed HERE

While there are many details about the RPS and Adjustable Block Program forthcoming, SRECTrade has been actively monitoring the progress and posting information as it has become available.  A recent SRECTrade blog post with an outline of the program can be found HERE.

We will continue to provide updates as the rule making proceeds. As always, please feel free to reach out to us if you have specific questions.

SRECTrade to speak at Intersolar Finance Symposium – July 10, 2017

Posted July 6th, 2017 by SRECTrade.

On Monday, July 10, 2017, SRECTrade’s CEO, Steven Eisenberg, will be speaking on a panel at the Intersolar Finance Symposium. The panel, entitled “Orange Button: attacking costs and increasing transparency via (portable) finance data standards”, will begin at 2:15 p.m. PT. The panel will focus on Orange Button and other initiatives companies in the solar industry are taking to standardize data portability, transparency, and availability. Steven will focus on the efforts SRECTrade has taken with regards to standardization in the SRECs markets, including initiatives to streamline solar asset certification and on-boarding, tracking registry technology integrations, and SREC transactions. Other panel participants include Michelle Savage (Moderator), VP of Communications at XBRL US, Melanie Gnazzo, Partner at Chapman and Cutler, Sam Adeyemo, COO at Aurora Solar, and Jason Kaminsky, COO at kWh Analytics.

H1 2017 SREC Pricing, Presented by Market Insights

Posted July 5th, 2017 by SRECTrade.

The first-half of 2017 was a dynamic period in the SREC markets. SREC prices experienced highs and lows. In order to understand and clearly present pricing data, SRECTrade offers a subscription product – Market Insights. Login to your SRECTrade account and get started for free.

Please see the Year in Review video here:

 

New Jersey SREC Update – June 2017

Posted June 28th, 2017 by SRECTrade.

The 2017 energy year for New Jersey closed at the end of May, and with the latest NJ Office of Clean Energy Solar Activity Reports we have our first indication of total development activity for the full 12 months of the previous compliance period. We have taken the opportunity to update our state capacity model and dig into the available information in greater detail.

You can find our most recent capacity presentation here.

As of the most recent NJ Office of Clean Energy activity report, which tracks registered assets as of 5/31/2017, New Jersey has built a total of 2,169MW of solar capacity.  345MW of that has been built in EY 2017 alone. The most recently published report showed an increase of 38.9MW in solar installations since the figure reported through 4/30/17.  While much of the new capacity was certified in April and May of 2017, an unusually high amount of new capacity was attributed to December of 2016.

  • 12MW from May 2017
  • 11MW from the period between January and April 2017
  • 14MW from December 2016

Given the observed pattern in the delay of these reports accurately displaying the full capacity to be attributed to a given month, we assume that we will see another 5-15MW of capacity added to May 2017 in next month’s activity report, bringing the EY 2017 total new build figure in the range of 350MW to 360MW.

In terms of EY 2017 SREC supply and demand, our analysis shows that 2017 will be slightly (4.8%) oversupplied, but with the implied growth rate of 30MW/month quickly outpacing the growth of the RPS solar carve out schedule. Given a base case of 30MW/month and an assumption of flat load growth, we see an 24% oversupply in 2018 and a 57% oversupply in 2019.

An important piece of information to note however is that state electricity sales have shown a consistent negative trend, with sales dropping from over 83mm MWh in 2007 to 74mm MWh in 2016.  This is an annualized rate of decrease of slightly more than 1% over the previous 10 years.  We have included scenario analysis for both a flat load growth scenario as well as a negative growth scenario. Below demonstrates flat load growth scenarios.

scenario-1

supply

Given the high likelihood of significant market oversupply in coming years, either a drastic slow down in build rates or an expansion of the New Jersey SREC program requirements would be needed to address forecasted supply and demand dynamics.  Industry stakeholder groups are currently in process of evaluating how expanded NJ RPS requirements may be feasible in the framework of the existing program.

As always, we will follow the legislative process closely and keep our clients updated on any substantive changes in the market. Please feel free to reach out to your brokerage team coverage with any questions or comments.

 

Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

Copyright. This document is protected by copyright laws and contains material proprietary to SRECTrade, Inc. This document, data, and/or any of its components (collectively, the “Materials”) may not be reproduced, republished, distributed, transmitted, displayed, broadcasted or otherwise disseminated or exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of the Materials does not convey any rights to reproduce, disclose, or distribute its contents, or to manufacture, use, or sell anything that it may describe, in whole or in part. If consent to use the Materials is granted, reference and sourcing must be attributed to the Materials and to SRECTrade, Inc. If you have questions about the use or reproduction of the Materials, please contact SRECTrade, Inc.