Archive for November, 2020

LCFS Market Update – November 2020

Posted November 22nd, 2020 by SRECTrade.

The California Low Carbon Fuel Standard (CA LCFS) market exhibited steady credit prices in the third quarter of 2020. Throughout the quarter, credit prices remained steady around ~$195 per credit. On October 31 the California Air Resources Board (CARB) released the Q2 2020 credit and deficit report. There was an overall drop in deficits and credits generated in Q2 2020 as well as a smaller draw upon the cumulative bank most likely due to impacts of COVID-19. The enclosed update provides highlights on news impacting the market, a recent price trend overview, and a closer look at the Q2 2020 credit and deficit report.

SRECTrade offers LCFS credit management and brokerage services to electric vehicle (EV) fleet operators, OEMs, EV charging station owners, and other clean fuel asset owners. We help our clients navigate the entire LCFS process including asset registration, ongoing reporting requirements, transacting, settlement, and remittance of funds. Our domain expertise in environmental commodity markets allows us to provide our clients with industry leading regulatory and market knowledge. Please reach out to cleanfuels@srectrade.com or (415) 763-7732 x 4 for more information.

Washington, D.C. SREC Market Update

Posted November 17th, 2020 by SRECTrade.

The SREC market in Washington D.C. has seen a change in trends due to changing market conditions associated with COVID-19. Our enclosed analysis provides an update on these market conditions and evaluates future market dynamics.

Compared to our last market update – posted on May 22, 2020, we project a greater oversupply in 2020 & 2021 and our new analysis shows 2022 now slightly oversupplied in high build rate scenarios.  Despite this, we expect the market to flip to undersupplied in 2023, or sooner in low build rate scenarios.

This change in dynamic can be attributed to several factors including:

  • COVID related decline in electricity sales resulting in lower SREC demand
  • Higher build rates resulting in higher forecasted SREC production 
    • 1.65 Last Twelve Month Avg. (MW/mo) (May Analysis) vs.
    • 2.49 Last Twelve Month Avg. (MW/mo) (Current Analysis)

In this time of uncertainty, there are several fundamental considerations that could impact the final supply and demand figures over the next coming months. Final 2020 DC SREC production, Q4 build rates, and actual grandfathered load will need to be analyzed to determine the degree of oversupply and more accurately project future market conditions.

Should you have any questions regarding the enclosed analysis or need transaction and management services, please contact us.