Posts Tagged ‘minimum standard’

Massachusetts DOER Announces Final 2019 SREC Minimum Standards

Posted August 31st, 2018 by SRECTrade.

Update: On Wednesday, September 5th, the MA Department of Energy Resources (DOER) made some small corrections to the previously announced final 2019 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. The corrections were made to also include a small number of SRECs that the DOER approved to be transferred into the SREC-I and SREC-II auction accounts between the DOER’s preliminary minimum standard announcement in July and its final minimum standard announcement in August. The original post has been edited to reflect the corrections.

On Thursday, August 30th, the DOER announced the final 2019 SREC-I and SREC-II Compliance Obligations and Minimum Standards. This announcement follows the results of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions. The final announcement differs only slightly from the preliminary announcement in July.

Solar Carve-out (SREC-I)

The DOER has determined that the 2019 Compliance Obligation for the SREC-I program will be 797,674 MWh and that the Minimum Standard will be 1.7446%. The 2019 Minimum Standard for load under contracts signed before June 28, 2013 will be 1.0967%. The Determination of the CY 2019 Total Compliance Obligation and Minimum Standard, published by the DOER, outlines how this Minimum Standard was calculated.

Solar Carve-out II (SREC-II)

The DOER has also calculated the 2019 Compliance Obligation and Minimum Standard for the SREC-II program, which are 1,060,524 MWh and 2.3195%, respectively.

In addition, the DOER calculated the 2019 SREC-II Compliance Obligation and Minimum Standard for load under contracts signed after May 8, 2016 as 1,789,567 MWh and 3.9139%, respectively. The final SREC-II baseline Compliance Obligation and Minimum Standard are slightly lower than their preliminary counterparts, primarily due to two reasons:

  1. A reduction in the average capacity factor applied to estimated generation from 13.64% to 13.35% (using eight years of Massachusetts Production Tracking System production data)
  2. An improvement to the SREC-II production estimation formula to account for the loss of partial MWhs left over after a reporting period, since these partial MWhs do not result in the creation of partial SREC-IIs

The adjustment to the SREC-II production estimation formula decreased the projected number of SREC-IIs to be generated by over 36,000 MWh.

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.

Massachusetts DOER Revises 2014 Compliance Numbers and Announces 2nd Round of SCCA

Posted July 27th, 2013 by SRECTrade.

Following Thursday’s MA DOER email announcing the preliminary 2014 compliance obligation, the DOER sent a follow up email yesterday, 7/26/13, that revised down the 2014 compliance requirement. Additionally, the email announced that the first round of the Solar Credit Clearinghouse Auction (SCCA) did not clear. The SCCA will now go to Round Two on Wednesday, July 31st. Any SRECs deposited in the SCCA are now eligible for three compliance years (2013, 2014 and 2015). The updated web page covering the new compliance obligation can be found here and the updated SCCA page here.

The 2014 minimum standard was revised down because of a calculation error

The DOER revised down the base line 2014 compliance obligation from 498,951 SRECs to 425,654 SRECs. The DOER attributed this downward revision of  73,297 (pre-SCCA results) to an error made in calculating the figures, “whereby the production from Generation Units operating in Q1 2013 was counted twice in DOER’s projection of SRECs that will be generated in 2013.” The revision sets the 2014 requirement to 425,654 SRECs, but if the SCCA reaches Round 3 then the 2014 compliance obligation will be increased to 464,520 SRECs.

The revision means less capacity is needed to meet the 2014 standard

With any compliance obligation announcement in Massachusetts we must adjust our calculations to account for a legal settlement between TransCanada and the DOER. Taking in to account the DOER’s revisions and the TransCanada reduction of 4,369 SRECs from the 2014 compliance obligation, the adjustments equate to 421,285 SRECs prior to any impact from the SCCA. We can convert the compliance obligation to calculate that an average of 363.2 MW or 396.7 MW operational all year long to to produce 421,285 SRECs or 460,151 SRECs depending on whether or not the SCCA reaches the third round. Note, these MW capacity figures only consider retiring 2014 vintage SRECs to meet the compliance obligation. It is possible older vintage SRECs can be used to meet the 2014 requirements, thus further reducing the capacity needed online throughout 2014.

We understand that 245.9 MW is operational (installed through July 25) and qualified for the current SREC program. Depending on whether or not the SCCA reaches the third round, a difference of 117.3 MW or 150.8 MW is needed to be added by the end of 2013 to issue the 2014 SREC requirement. Remember, this assumes the 2014 standard is only met with 2014 vintage SRECs and no additional capacity is added throughout 2014 (likely not the case given oversupply from prior periods and the possibility more MW capacity will be added before the end of 2013 or by June 2014; if eligible). Referencing the recent qualified and pending SQA lists, there are approximately 435 MW eligible but not yet operational. This means that (without taking in to consideration oversupply from previous periods) approximately 25-35% of the eligible, not operational capacity would need to be installed by 12/31/2013  to have enough solar capacity online by the beginning of 2014. See yesterday’s blog post to reference our analysis prior to the DOER’s revision.

The market did not expect round one of the DOER auction to clear

In order for the first round of the SCCA to have cleared today, all 38,866 SRECs needed to be transacted. Since the auction did not clear the SCCA moves to Round Two. The SRECs are now deposited back in to the SCCA with an extended useful life; 2 years increased to 3. Should a third round be needed then the 2014 compliance standard will increase by the number of SRECs originally entered in to the SCCA; 38,866 SRECs. At this point, the new 2014 SREC obligation will be increased to 460,151 net of all compliance exemptions.