Supporting Solar Power in Renewables Portfolio Standards: Experience from the United States

Wiser, Ryan

doi:10.2172/991963

Cited by 38 publications

(52 citation statements)

References 30 publications

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“…Seifert et al (2008), Howison & Schwarz (2012), ) which differ in their specification of the underlying cumulative emissions process which determines the payoff of the allowance at maturity. A key modeling choice is how to incorporate the 2 See for example Wiser et al (2010) and Bird et al (2011), both sponsored by the Department of Energy's National Renewable Energy Laboratory, for summaries of the development of SREC markets across the U.S. through 2011, or alternatively the New Jersey Clean Energy Program's annual reports and regularly updated news on the New Jersey market at NJCleanEnergy (2015). feedback of price onto emissions rate, as this can be specified as an optimal control problem for a central planner (as in Seifert et al (2008)) or alternatively as an automatic abatement produced by the structure of the market and in particular the merit order for electricity (as in ).…”

Section: Introductionmentioning

confidence: 99%

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

Coulon

Khazaei

Powell

2015

Journal of Environmental Economics and Management

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Section: Introductionmentioning

confidence: 99%

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

Coulon

Khazaei

Powell

2015

Journal of Environmental Economics and Management

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“…2 or 3 credits per MWh) to specifically promote investment in solar energy. To further promote the use of solar energy, 14 states have established separate solar set-asides and tradeable SRECs, and have been successful in increasing investment in solar generation ( [27,28,5,4,12]). The New Jersey (NJ) SREC market is the biggest in the US, has recorded prices near $700 per SREC, and has the most ambitious target of over 4% of electricity from solar by 2028.…”

Section: Case Application: the New Jersey Srec Marketmentioning

confidence: 99%

ADAPT: A Price-Stabilizing Compliance Policy for Renewable Energy Certificates: The Case of SREC Markets

Khazaei

Coulon

Powell

2017

Operations Research

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Abstract. Currently most Renewable Energy Certificate (REC) markets are defined based on targets which create an artificial step demand function resembling a cliff. This target policy produces volatile prices which can make investing in renewables a risky proposition. In this paper, we propose an alternative policy called Adjustable Dynamic Assignment of Penalties and Targets (ADAPT) which uses a sloped compliance penalty and a self-regulating requirement schedule, both designed to stabilize REC prices, helping to alleviate a common weakness of environmental markets. To capture market behavior, we model the market as a stochastic dynamic programming problem to understand how the market might balance the decision to use a REC now versus holding it for future periods (in the face of uncertain new supply). Then, we present and prove some of the properties of this market, and finally we show that this mechanism reduces the volatility of REC prices which should stabilize the market and encourage long-term investment in renewables.

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“…For example, Maine and New Jersey direct the regulated distribution utilities to act as the agent or intermediary and either sell or assign those contracts to default service providers or sell the energy into the wholesale electricity market through periodic competitive auctions or other means available (MPUC 2009;Wiser et al 2010). The utilities are allowed to recover in rates the net cost, if any, of the contracts.…”

Section: Encourage Long-term Contractsmentioning

confidence: 99%

Role of Renewable Energy Certificates in Developing New Renewable Energy Projects

Holt¹,

Sumner²,

Bird³

2011

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NOTICEThis report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Executive SummaryFor more than a decade, renewable energy certificates (RECs) have grown in use, becoming a common way to track ownership of the renewable and environmental attributes of renewable electricity generation. RECs are used widely, and are often required, to verify utility compliance with state renewable portfolio standards (RPS) and to substantiate claims made by voluntary purchasers of green power.In recent years, however, questions have risen about the role RECs play in the decision to build new renewable energy projects. Critics point to the uncertain demand for and, in some cases, low prices of RECs as evidence that RECs do not make a meaningful contribution in favor of building a new project. Others counter that any revenue source, large or small, contributes to making new projects profitable and also attracts investment to the broader industry. . Although compliance demand is subject to policy changes, it is nevertheless relatively certain, whereas voluntary demand is less certain because it is not backed by force of law-in fact, it is subject to willingness to pay extra for the renewable and environmental attributes.Information from a variety of market participants suggests that the importance of RECs in building new projects varies depending on a number of factors, including electricity market prices, the costcompetitiveness of the project, the presence or absence of public policies supportive of new projects, contract duration, and the perspective of different market participants. Electricity market prices vary over time, frequently dependent on the price of natural gas. If the expected wholesale electricity price is low, RECs are more critical to make projects economically attractive; if electricity prices are high, the additional REC revenue may be less critical.The economic feasibility of projects also depends on the quality of the renewable resource and the cost of the project. If the project is very cost-competitive, the importance of REC revenue may be diminished in the build versus no-build decision, but if the project is small, lacking economies of scale, or relies on more expensive technologies or faces other cost chal...

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Supporting Solar Power in Renewables Portfolio Standards: Experience from the United States

Cited by 38 publications

References 30 publications

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

SMART-SREC: A stochastic model of the New Jersey solar renewable energy certificate market

ADAPT: A Price-Stabilizing Compliance Policy for Renewable Energy Certificates: The Case of SREC Markets

Role of Renewable Energy Certificates in Developing New Renewable Energy Projects

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