On August 11, 2017, Massachusetts regulators filed the proposed final version of CMR 7.75, the Clean Energy Standard (CES), a plan to cut state GHG emissions by 80% of their 1990 levels by 2050. To achieve this aggressive target, the state is going to rely on the procurement of long-term contracts to import hydropower from Canada, as well as the development of more renewable resources, such as wind and solar. Ultimately, however, whether this new mandate can achieve its compliance targets is going to require not only committed project development capital, but also large investments in new transmission lines.
On August 11, 2017, the Massachusetts Department of Energy Resources (DOER) filed a much anticipated final version of the Solar Massachusetts Renewable Target (SMART) Program regulation. This revised SMART framework proposition includes several components that market participants heavily discussed during three public hearings as critical to the success of this program and its objectives.
Solar developers have anxiously awaited the outcome of the New York Reforming the Energy Vision (REV) and the new compensation mechanism for distributed energy resources. Many components of the new market design provide more predictability around the clean energy mandate and market fundamentals. Nevertheless, there are currently several programs that provide different incentive levels, creating a complicated system that may hinder the state’s ability to meet its ambitious “50 by 30” goal, which requires the state to retain its renewable generation and avoid significant exports into adjacent Control Areas.
On February 6, 2017, Pennsylvania lawmakers introduced Senate Bill 291 concerning Alternative Energy Portfolio Standard (AEPS) revisions that aimed at promoting and advancing in-state solar energy project development. As introduced, the proposal seeks to jump-start solar development in the state by restricting eligibility under the AEPS to PA-sited only facilities and expanding the solar requirements to stimulate more build. Senate Bill 291 aims to boost the current solar AEPS requirements to 1.5% by 2023 from the current mandate of 0.5% by 2021.
There has been continued year-on-year supply growth in the NEPOOL Class I REC market across all states and almost all technologies. The following report explores the resulting supply and demand fundamentals and analyzes the pricing trends and legislative impact on this particular market.
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.
The PJM Class I REC price rally continued strongly through to August 2013, climbing above $15 for the most liquid markets of New Jersey, Maryland and Pennsylvania, and to the high-$13 level even in the less liquid markets of Ohio. Prices have since retreated slightly from last month’s peak, settling in the mid-$13 range as of September 6 for the premium markets.