NEPOOL Class I RECs Q2 2015 Data Release Update

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states for almost all technologies. Generation in the most liquid markets of Massachusetts and Connecticut grew 12% and 19% in Q2 2015 over Q2 2014, respectively. New Hampshire saw the most quarter-on-quarter growth at 35%, while the less liquid Rhode Island grew 14% in Q2 ’15 against Q2’14.

RGGI Market Update: Auction 29 Sparks Trading

Ali Shajrawi Market Research Briefs

The twenty-ninth Regional Greenhouse Gas Initiative (RGGI) auction cleared at $6.02 amid sufficient demand well above the Cost Containment Reserve (CCR) trigger price of $6 per allowance. Before the auction, market participants were uncertain whether the clearing price would trigger the CCR provision and allow for the sale of 10 million allowances in addition to the initial cap offering of 15,374,294 allowances. Announcement of the full release of 2015 CCR allowances indicated mixed implications for forward supply and demand scenarios. With the market appearing to be oversupplied by almost 139 million allowances by the end of 2014, many are wondering what is causing the sufficient demand above the $6.00/tCO2 CCR trigger price, and to what extent the release of the CCR volume will impact forward market scenarios. The Karbone Research Desk addresses market fundamentals, pricing, and forward market balance concerns in this report.

New Jersey SREC Market Update: No Summer Love for Solar Supply

Ali Shajrawi Market Research Briefs

Behind-The-Meter (BTM) installations continued to drive forward the New Jersey solar market, adding approximately 13 MW last month. July had no Direct Grid- Supply completions, contrary to NJCEP’s estimates of around 13 large-scale projects to be in service by July. New Jersey SREC levels experienced an uptick in price volatility in the first two months of Q3. RY 2015 and RY 2016 prices started the quarter in the mid-$230 area but ultimately traded in a range as wide as $20 since the start of July.

Massachusetts SREC I Update: Diminishing Demand meets Stranded Supply

Ali Shajrawi Market Research Briefs

The third Massachusetts SREC I Auction cleared in the first round for the first time amid overwhelming demand. Preliminary results of the Auction indicated mixed implications for forward supply and demand scenarios. Can the SRECs sold in the Auction help satisfy the projected shortage in 2015 Compliance Obligation? Will enough of the reserve of re-minted SRECs be held out for future usage to relieve the perceived tightness in 2016 supply? The Karbone Research Desk addresses forward supply & demand dynamics, pricing, and market balance concerns in this report.

New Jersey SREC Market Update: Q2 Supply Blues & The Great 2015 Rally

Ali Shajrawi Market Research Briefs

Grid-Supply projects in the development pipeline have finally impacted the market bringing last month’s new solar build number up to approximately 14.4 MW. June had two new Direct Grid Supply projects with total capacity of 5.86 MW – compared to only one Grid Supply project since February, previously the only Grid Supply project YTD. With relatively anemic total build numbers for Q2, New Jersey SREC prices have shown an expected resilience in the front end of the curve from early spring through mid-summer.

NEPOOL Class I RECs: Racing in Reverse – Supply Decelerates More Than Demand

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states and for almost all technologies. In the most liquid markets of Massachusetts and Connecticut, Class I REC generation in Q1 2015 grew 4.6% and 12.9% against Q1 2014, respectively. In addition, even the less liquid New Hampshire market supply grew considerably by 27% in Q1’15 over Q1’14. Class I REC generation increased slightly at 3.1% in Maine and 9.6% in Rhode Island. Nevertheless, Q1 year-on-year rates of growth have decreased significantly for most states across the board (excluding NH). While the absolute levels of RECs produced in Q1 has increased, harsh winter conditions seemed to affect per-MW productivity for most renewable technologies as generation fell below expectations given installed nameplate capacity.

NEPOOL Class I RECs Q1 2015 Data Release Update

Ali Shajrawi Market Research Briefs

NEPOOL Class I data showed continued generation growth across all states and for almost all technologies. In the most liquid markets of Massachusetts and Connecticut, Class I REC generation in Q1 2015 grew 4.6% and 12.9% against Q1 2014, respectively. In addition, even the less liquid New Hampshire market supply grew considerably by 27% in Q1’15 over Q1’14. Class I REC generation increased slightly at 3.1% in Maine and 9.6% in Rhode Island. Nevertheless, Q1 year-on-year rates of growth have decreased significantly for most states across the board (excluding NH). While the absolute levels of RECs produced in Q1 has increased, harsh winter conditions seemed to affect per-MW productivity for most renewable technologies as generation fell below expectations given installed nameplate capacity.

New Jersey SRECs: BGS & Running of the Bulls

Karbone Market Research Briefs

NJ SREC pricing has appreciated to levels not witnessed since Q1 2012. Breaking past the $200/SREC threshold in the last weeks, forward vintage pricing and liquidity have strengthened ostensibly in advance of the state’s focal Basic Generation Service (BGS) Auction. With the Auction still over two months away however, questions remain as to how high the price rally will reach, and what other forces could be behind it.

MISO Capacity: the Capitulation of Coal

Karbone Market Research Briefs

MISO Capacity pricing has rallied across the board in bilateral markets as a combination of coal retirements and ISO exports threaten capacity deficits by ~2016. In anticipation of these impending shortages, bilateral capacity forward pricing in select zones has already appreciated to levels at or near those in PJM. Karbone expects this trend to continue in the short and mid-term. The following research brief analyzes the primary drivers of this market behavior and outlines potential directional movements.