Despite market disruptions associated with COVID-19, the SREC market in Washington D.C. has remained strong over the first quarter of 2020, with consistent pricing and liquidity. Our enclosed analysis shows the fundamentals behind this dynamic, with a decreasing oversupply in 2020 & 2021, followed by undersupply into the foreseeable future.
As per the DC PSC RPS Report for Compliance Year 2019, load falls into one of three compliance buckets:
- Load contracted prior to October 8, 2016, which is obligated to the provisions in the DG Amendment Act of 2011.
- Load contracted between October 8, 2016 and January 1, 2019, which is obligated to the provisions in the Renewable Portfolio Expansion Act of 2016.
- Load contracted on or after January 1, 2019, which is obligated to the provisions in the CleanEnergy DC Omnibus Bill Amendment Act of 2018
Based on the DC Compliance Reports, in compliance year 2020, 18.7% of the total retail sales is exempt from the RPS Expansion Act of 2016. This load will be subject to ACP levels which are lower than current DC SREC pricing. In this analysis, compliance associated with load in this bucket will pay the compliance penalty instead of purchasing DC SRECs. The analysis also assumes that load contracts exempt from the CleanEnergy DC Omnibus Bill, will roll off in two-year equal increments after compliance year 2021.
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