Archive for the ‘New Jersey’ Category

New Jersey SREC Registration Program (SRP) Transition Update

Posted February 23rd, 2016 by SRECTrade.

The New Jersey Office of Clean Energy announced that, effective March 1st, 2016, all solar renewable energy credit (SREC) registration program (SRP) applications will be submitted through an online portal. This portal is anticipated to expedite the review and approval of SRP registrations and reduce the backlog that the state works with. Registrants will have opportunities to submit project specifications as well as upload supporting documentation through the portal. Although paper applications will no longer be accepted, this development will help to streamline the application process for the nation’s largest SREC market.

Office of Clean Energy representatives hosted training sessions for the online portal on February 18th and 19th. The webinars were made publicly available on the Office’s webpage and a user manual with frequently asked questions will also be developed.

The Office encourages registrants who have previously submitted a paper application to withdraw their application and re-submit it to the online portal on or after March 1st, thus expediting the application review. For applicants that choose to re-submit their registrations in the online portal, the registration date of their original submissions will be used to determine compliance with state rules.

The Office also announced that from this time forward all SRP Registration packets and Final As-built documentation should be submitted to the new address below:

New Jersey’s Clean Energy Program, SRP Processing Team, c/o Applied Energy Group
317 George Street, Suite 305
New Brunswick, NJ 08901

The Office’s phone number for inquiries, 866-NJSMART (657-6278), remains unchanged.

SRECTrade, Inc. continues to enjoy great success transacting in the New Jersey SREC market as prices have steadily risen over the last four months. For more information on the New Jersey SREC market, please visit our state webpage here.

New Jersey SREC Update: February 2016

Posted February 4th, 2016 by SRECTrade.

The NJ SREC market has been active this week as traders gear up for tomorrow’s start to the annual BGS auction.  In the auction, electricity providers will be awarded parcels of load to be served across the state by the four major Electric Distribution Companies (EDCs) – Public Service Electric & Gas (PSE&G), Atlantic City Electric Company (ACE), Jersey Central Power & Light (JCP&L), and Rockland Electric Company (RECO) – between 2017 and 2019.  As wholesale power providers find out their future obligation for electricity production, they also begin to hedge their forward exposure to the RPS SREC obligation.  This auction has traditionally been the single biggest liquidity event of the year for the NJ SREC market so we believe this to be a timely opportunity to update our capacity models.

Our New Jersey SREC Update presentation can be found here.

The trend in build rate has kept largely in line with our October 2015 update, when we emphasized that the market is projected to be fundamentally balanced on average through 2018, with the maximum range of 10.6% undersupply to 7.3% oversupply.  The trend in 2019 and beyond, however, begins to turn towards oversupply in 2019 and 2020 as the RPS percentage growth slows.  In the medium term we expect to see NJ SREC markets trade largely in line with the average price range witnessed in spot vintages.  In the short term, however, the renewed source of demand from compliance buyers shifting their focus to 2017 and 2018 obligations should be extremely supportive for prices.

One final observation pertains to the potential impact that a steadily more risk-averse attitude towards credit exposure could have on the ability for members of the solar industry to access liquidity in both OTC and electronic SREC markets.  As many firm’s credit requirements become more stringent, we have noticed a delineation in the market where the price that is being traded between two investment-grade (IG) counterparties is growing further and further away from the levels that are accessible to non-IG solar developers and asset owners.  

As always, this document is informational in purpose to assist in explaining the focus on NJ Solar RECs over the coming weeks.

 

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 toSRECTrade, 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 ofSRECTrade, 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.

2015 SREC Pricing – Year in Review

Posted December 24th, 2015 by SRECTrade.

2015 was a dynamic year 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: October 2015

Posted October 17th, 2015 by SRECTrade.

This week the NJ SREC market experienced sustained buying in both the OTC New Jersey SREC markets as well as in the NJ EDC Spot auction.  Tuesday and Wednesday spot markets were bid higher as well as noticeable buying in forward markets for the NJ17, NJ18, and NJ19 vintages.  In Thursday’s EDC  auction, the final price ($243.30) settled a little more than three dollars above the session’s offer price.

With all this focus on New Jersey SREC markets, we believe this is an opportune time to share our updated capacity models and provide additional information on what drove price action this week.

Our New Jersey SREC Update presentation can be found here.

A consistent trend observed in the New Jersey SREC market is the impact of the annual BGS auction, held in February of each year.  As the New Jersey Electric Distribution Companies use the auction to procure large amounts of power supply, a corresponding number of SRECs must also be procured in the market in order to satisfy the new compliance requirements.  As the market has come to understand this relationship, it is possible SREC buyers are entering the market earlier and earlier in an attempt to secure supply ahead of the BGS-induced rush.  It could be inferred therefore that participants may now be using the liquidity supplied by other market events (in this case, Thursday’s EDC spot auction) as an opportunity to position even further ahead of any future price appreciation.

Regarding the buying activity in farther dated NJ SREC energy years, we revisited our capacity model which tracks state supply and demand fundamentals.  Slides 6 and 7 of the NJ SREC Update presentation start with currently available 2015 market data, then examine three different build scenarios, based off of current LTM build rates, and observe the impact each has on the future balance of supply through 2020.  Although the market is predicted to be fundamentally oversupplied, to some degree, across some of the build scenarios, even the greater per month build rates result in oversupply by ~27.6% in RY2019.  While not insignificant, a 27.6% oversupply on its own does not guarantee the type of consistent selling pressure that would lead to a sustained selloff.  If that 27.6% of the market decided to wait and hold off selling SRECs, or if the market experienced a build rate more in line with the current trend (~16.0 MW/month), the market could find support from a more balanced supply and demand dynamic.

To be clear, this is informational in purpose to assist in explaining the focus on NJ Solar RECs this week.  We will, however, be watching the markets closely through year end to see if these trends continue to develop.

 

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.

 

New Jersey SREC Prices Continue to Move Up

Posted July 16th, 2015 by SRECTrade.

The New Jersey 2015 SREC market is currently bid $235/SREC. Since the beginning of Q2 2015, the market has steadily moved upward from $200/SREC. On July 15, 2015, the auction manager representing the NJ Electric Distribution Companies (EDC) announced a $246.42/SREC clearing price for the NJ2015 SREC auction held on July 14, 2015. 42,470 SRECs were sold at this price. What’s interesting about this most recent EDC auction is that it cleared above the offering side of the market. Historically, as shown below, the EDC auctions have traded between the bid and offer prices quoted in the over the counter (OTC) market around the time of the EDC auction close.

Screenshot_071515_084654_PM

The supply outlook, relative to demand, for reporting year 2016, appears to point to a flat market, meaning that there will likely be enough supply available from previous energy years and from SRECs issued throughout reporting year 2016. This assumes monthly solar build rates fall between 12.9 MW and 25.7 MW per month. Our presentation, from the Environmental Markets Association meeting this spring, shows various build rates relative to the NJ Solar RPS demand requirements. As shown below, in each Case 1-3, the under and oversupply estimated is close to zero meaning SREC supply will be close to balanced with the state’s RPS demand. Through May 2015, NJ solar monthly build rates have averaged 18.8 MW per month (over the last 6 months). June 2015 build rates are expected to be announced soon.

Screenshot_071515_084058_PM

Notes:

1) NJ2015 bid / offer pricing presented in chart above includes periods in which the market was quoted on a forward basis. The EDC clearing price presented at that time are for the most current spot vintage available for immediate delivery (i.e. 2014 EDC auction prices are presented against 2015 OTC Bid / Offer pricing in instances where 2015 SRECs weren’t available for sale in the EDC auction).

2) NJ Supply Demand Scenarios chart assumes electricity sales remain at the same level as reporting year 2014.

Environmental Markets Association – PA, NJ, and MD SREC Presentation

Posted May 28th, 2015 by SRECTrade.

Last week, SRECTrade was invited to present at the Northeast Renewable Energy Credit Round Table hosted by the Environmental Markets Association (EMA).  The presentation provides a fundamental look into the PA, NJ and MD SREC markets.

The presentation covers the following topics on each state SREC program.

  • Current Installed Solar Capacity
  • Supply and Demand
  • Recent Pricing

Feel free to contact us with any questions.

Screenshot_052815_084018_PM

January 22, 2015 New Jersey SREC Market Update Webinar Slides and Recording Available

Posted January 26th, 2015 by SRECTrade.

On January 22, 2015, SRECTrade hosted a webinar on the NJ SREC market. For access to the slides please click here: SRECTrade 01/22/15 NJ SREC Update. For access to a video recording of the webinar, click the image below. Please note, the slides in the link above differ from the recording below. They have been updated to reflect the additional solar capacity installed in December 2014. This announcement was made by the NJ Office of Clean Energy on January 22, 2015.

This document and recording is protected by copyright laws and contains material proprietary to SRECTrade, Inc. It or any components may not be reproduced, republished, distributed, transmitted, displayed, broadcast or otherwise exploited in any manner without the express prior written permission of SRECTrade, Inc. The receipt or possession of this document 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 these materials is granted, a link to the current version of this document on the SRECTrade website must be included for reference.

NJ SREC Market Update Webinar Slides and Recording Posted

Posted March 12th, 2014 by SRECTrade.

The slides from SRECTrade’s March 12, 2014 New Jersey SREC market update webinar are available here. Steven Eisenberg, Alex Sheets and Sam Rust present SREC issuance and pricing numbers. Additionally, three supply vs. demand scenarios, that assume a high, low, and consistent build rates, are discussed to illustrate potential SREC market supply and demand over the next few years.

A recording of the webinar can be watched by clicking on the image below.

NJ SREC Update

New Jersey SREC Market Update Webinar: Wednesday, 3/12/14 @ 2 pm EST

Posted March 6th, 2014 by SRECTrade.

SRECTrade will host a webinar covering the latest pricing and supply numbers for the New Jersey SREC market. Like all SRECTrade market update webinars, it will be open to the public.

The webinar will be held on Wednesday, 3/12/14, at 2 pm EST.

Click here to register

March 12 NJ Webinar

New Jersey SREC Market Update: Prices Are Up

Posted January 21st, 2014 by SRECTrade.

Prices for New Jersey SRECs have increased dramatically over the last month from the $140s in early December to current pricing in the low $170s. The RY2014 vintage cleared in our December auction at $138.01 and the January auction just cleared $169 for the same product, but recent over-the-counter deals have been done in the $170s.

NJ 2014 Pricing Over Time 520

Why are  NJ RY2014 SRECs trading higher?

In recent months, the monthly build-rate for new solar projects has been relatively restricted and significantly lower than build rates seen in RY2013. The average for the last six months (LSM) is 11.7 MW per month, while the last 12 months (LTM) is 16.9 MW. Lower build rates, mean fewer SRECs than expected, which in turn causes both sellers and buyers to be more aggressive in how they price the market. However, the market remains fundamentally over-supplied in RY2014 when taking into consideration unretired eligible SRECs from previous reporting years and SRECs minted from RY2014 generation.

Workbook1 Sheet1

Impact of Basic Generation Service Procurement on SREC Prices

Another reason that may explain the run-up in prices and volumes-traded is the forthcoming Basic Generation Service (BGS) electricity procurement.

Each year, in early February, the regulated electricity utilities in New Jersey conduct an auction in which wholesale power providers compete to provide Basic Generation Service to consumers in New Jersey. In providing electricity, the wholesale power suppliers must also provide the requisite SRECs corresponding to the electricity load. In short, during the BGS auction period, there is a significant increase in market activity. This alone warrants attention from sellers. Coupled with recent run-up in prices, sellers should be especially poised to act.

With increased prices and increased market activity, now could be an ideal time to lock in your revenue for SREC sales. We’re here to help facilitate the transaction, so please feel free to contact us.