Archive for September, 2016

PJM GATS Solar – Registered Capacity Update as of September 2016

Posted September 29th, 2016 by SRECTrade.

The following post is a monthly update outlining the megawatts of solar capacity certified to create SRECs in the PJM GATS solar REC markets that SRECTrade serves. All data is based on the information available in PJM GATS as of the date noted.

PJM CapacityHelv

The chart above compares the megawatts (MWs) registered in PJM GATS as of September 23, 2016 (the blue bar) to the estimated RPS solar MWs needed to be operational, through the duration of the current reporting year, to meet each market’s RPS targets (the green bar). Note that the Estimated RPS MWs quantity does not take into consideration SRECs eligible from previous reporting years and is only used as an estimate relative to the current MWs registered in PJM GATS. All actual RPS requirements are represented in megawatt hours (i.e. SRECs) required per year. The installed capacity operational over that time will produce SRECs, in addition to any eligible SRECs from previous periods, to end up with the final supply relative to that reporting year’s demand. For estimates on required number of SRECs per reporting year across the SREC markets SRECTrade covers, please visit our state market summary pages.

As of August 31st, New Jersey had installed a cumulative total of 1,871.9MW of nameplate capacity, 139.7MW of which had been installed since the Applied Energy Group’s May 31st report (June-August).  Their Solar Installation Report and Solar Pipeline Report can be found online here on the New Jersey Office of Clean Energy website, and our most recent analysis of those numbers can be found here. Please note that this analysis includes 15.6MW of estimated installations (final “as-built” applications submitted, but not yet processed).

Additionally, please note the following in the figures presented above:

OH2016: Represents all OH eligible solar facilities and includes some facilities that are cross-registered in PA. If any systems were eligible in higher priced markets, such as DC, the capacity was excluded from OH eligibility as it could be sold at a higher price in DC.

DE2016: Represents all solar facilities eligible for the DE solar RPS requirement. Some facilities registered in DE are also eligible in PA and could impact that market’s supply.

DC2016: Includes all systems eligible for the DC SREC market. If a system was eligible in another market, it was not included there given the current pricing for DC SRECs.

PA2017: Represents all solar facilities eligible for the PA SREC market. Some systems are cross-registered in OH as well. If a system was eligible in any higher priced markets (i.e. NJ or MD sited systems that cross-registered in PA) they were not included in the total MW balance displayed above.

MD2016: Includes all MD eligible solar capacity registered in PJM GATS as of the date noted. If projects were cross-registered in Washington D.C., the capacity was not allocated to Maryland’s eligible MW total.

NJ2017: The balance noted above represents the 8/31/16 Solar Installation Report reported by Applied Energy Group.

PJM GATS Registered Solar Projects Summary

There are 101,215 facilities across 3,430MW registered in PJM GATS as of 9/23/2016.

432 projects are 1MW or larger in capacity, representing 1763.9MW or 51.4% of the qualified capacity. There are 101 projects that are 5MW or larger. These make up 32.7% of all qualified capacity, 1,122.1MW total, in PJM GATS.

Note: SREC requirements for markets without fixed SREC targets have been forecast based on the EIA Report “Retail Sales of Electricity by State by Provider”. Projected SRECs required utilizes the most recent EIA electricity data applying an average 1.0% growth rate per forecast year. The state’s RPS Solar requirement is then multiplied by forecast total electricity sales to arrive at projected SRECs required. Projected capacity required is based on a factor of 1,200MWh, in PJM GATS states, generated per MW of installed capacity per year.

Massachusetts SREC-II Update – September 2016

Posted September 26th, 2016 by SRECTrade.

The Department of Energy Resources (DOER) published an updated list of projects with a Statement of Qualification (SQA) on August 25, 2016. Since the last update in July not much has changed in the SREC-II landscape. Expected oversupply still remains the reality reflected in pricing for 2016. Similarly, monthly build-rates are more or less unchanged. The total installed capacity increased 65MW since the last update, bringing us to 573.54 MW. You can find our in-depth analysis here. Below, please find some highlights.

Based on the latest data, there are currently 573.54 MW of operational assets, with an additional 956.87 MW that is qualified, but not operational:

Installed Capacity

Finally, based on current build rates, we continue to see a gross oversupply for the MA2016 SREC-II market:

S, D

Thus far, the market has generated 82,758 MA2016 SREC-IIs and based on current build-rates and installed capacity, we estimate an additional 473,084 SRECs coming later in the year. Adding in the re-minted volumes of 67,046, we see a potential pool of supply upwards of 622,888. Compare that supply figure to the demand side of approximately 327,471 and we conclude the market is oversupplied by 90%. In other words, nearly half of all MA2016 SRECs may find their way to the Solar Credit Clearinghouse Auction next year.

 

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.

Maryland SREC Update – September 2016

Posted September 15th, 2016 by SRECTrade.

As the growth of the Maryland solar market continues to outpace the state’s RPS framework, the Maryland SREC market has become more and more challenging to navigate.  The SREC market is clearly oversupplied and the market is trading in line with expectations that this will continue well into the future.  In order to better inform the conversation around the true state of the MD SREC market we’ve taken a closer look at data made available by the PJM GATS regarding the rate at which new solar capacity is being brought online in the state.

You can find a copy of our updated Maryland capacity presentation here.

Through August 2016 there were 157,377 SRECs left over from compliance years 2014 and 2015.  Thus far in 2016 (through July 2016 generation), 344,792 CY2016 SRECs have also been issued.  Assuming that the observed average monthly build rate of 21.4 MW/month continues through the year, we project that 293,183 additional SRECs will be generated in compliance year 2016.  Taking together the existing inventory of available prior-period SRECs together with the projected production for the remainder of 2016, we foresee an oversupply of 363,600 SRECs, or approximately 84% over the total 2016 RPS requirement, by the end of the year.

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There are a few important trends to note here.  First, while the trailing twelve month (TTM) average monthly build has technically increased since our last Maryland capacity update in June (21.4MW/month now vs. the 19.6MW/month reported in June) this is actually due to the lower build rates of Q2 2015 falling out of the TTM measurement.  The most recent data shows that the build rate actually peaked in the three months of December 2015 through February of 2016.  Those three months averaged a 35.9MW/month build rate, while the three months immediately following dropped to a significantly less aggressive 17.5MW/month average.  This shows that the rapid growth witnessed in the Maryland market has indeed begun to slow due to weaker support from the SREC market.

Secondly, this recent slow down also has significant implications for the likely path the Maryland market will follow over the coming years.  As we have already seen monthly build numbers retreat from their Dec15-Feb16 highs, we are more confident that the Maryland market will fall into a long term trend somewhere between 50% and 75% of the current TTM average of 21.4MW/month. The enclosed analysis includes two scenarios, the first with the RPS requirements as currently set and the second with the RPS increase as proposed under SB0921/HB1106 The RPS increase proposed was vetoed by Governor Hogan in May of 2016. While industry stakeholders continue to advocate for an RPS increase, it is uncertain what form a new piece of legislation could take. For purposes of showing the state of the market under current and the vetoed legislation (i.e. some form of increase), supply and demand scenarios have been presented under both RPS requirements. Assuming a build rate decline of 50-75% of current TTM average, the market will be in a persistent state of oversupply within the range of approximately 50% to 115% through 2018 under both RPS requirements.

We want to emphasize that these projections are derived entirely from available historical data based on observations of assets built and registered with PJM GATS.  The monthly build rates remain subject to change for some time into the future as the registry receives and processes new project registrations.  Also, these numbers do not incorporate data from the PJM interconnection queue.  While this queue is noteworthy due to the presence of multiple relatively large utility-scale installations, it is impossible to predict which of these will indeed come online and which will fall away because of deteriorating project economics.  We acknowledge that if even one of the largest five projects listed in the interconnection queue comes online with SREC eligibility our projections would need to be significantly revised.

We will continue to track the state of the Maryland SREC market as more data is made available.  Please feel free to reach out to anyone on the SRECTrade brokerage team to discuss this analysis or any of the assumptions used herein.

 

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.

DOER Announces Final 2017 Compliance Obligation and Minimum Standard

Posted September 1st, 2016 by SRECTrade.

On Wednesday, August 31, the Massachusetts Department of Energy Resources (DOER) announced the final 2017 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. This announcement follows the results of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions.

Notably, this announcement differs greatly from the preliminary announcement in July. In particular, the DOER announced that the final SREC-II Minimum Standard for load under contracts signed prior to May 8, 2016 is 2.0197% (969,635 MWhs), reduced from 2.2960% (1,102,311 MWhs).

Solar Carve-out (SREC-I)

The DOER has determined that the 2017 Compliance Obligation for the SREC-I program will be 783,183 MWh and that the Minimum Standard will be 1.6313%. The 2017 Minimum Standard for load under contracts signed before June 28, 2013 will be 0.9861%. The Determination of the CY 2017 Total Compliance Obligation and Minimum Standard, published by the DOER, outlines how this Minimum Standard was calculated.

SREC-I Min Std

Solar Carve-out II (SREC-II)

The DOER has also calculated the 2017 Compliance Obligation and Minimum Standard for the SREC-II program, which are 1,374,406 MWh and 2.8628%, respectively. The DOER outlined how this preliminary Minimum Standard was determined in its “CY 2017 Calculation of Minimum Standard Guideline”.

SREC-II Min Std

Since all Retail Electricity Suppliers are exempt from additional obligations resulting from the expansion of the SREC-II Program Capacity Cap, the DOER established a baseline Compliance Obligation and Minimum Standard for load under contracts signed on or prior to May 7, 2016. The DOER’s calculation of the Final 2017 Compliance Obligation and Minimum Standard were similar to its calculation of the Preliminary 2017 Compliance Obligation and Minimum Standard (detailed here), but used 825 MW as the capacity that it expects would have been in operation had the SREC-II Program Capacity Cap not been expanded. The DOER used the 825 MW value to reflect its estimate of the generation facilities that would be qualified and operational by the end of the year – a significant reduction from the original 947 MW projection.

Using the 825 MW estimate, the DOER determined a total baseline Compliance Obligation of 969,635 MWhs and a Minimum Standard of 2.0197%. These two figures are significantly less than their counterparts from the preliminary 2017 Compliance Obligation and Minimum Standard, which were 1,102,311 MWhs and 2.2960%, respectively.

SREC-II Obligation Chart

The latest Solar Carve-Out II Qualified Units report (updated on August 25) identified nearly 575 MW of capacity as qualified and operational under the SREC-II program. Comparing the 825 MW figure that the DOER is targeting to the existing 575 MW, the market would need to more than double the Last Twelve Months (LTM) monthly average build-rate (30 MW) to reach that threshold.

For more information on the July announcement of the Preliminary 2017 Compliance Obligation, please visit our blog post on the topic.