Overview of Voluntary Renewable Energy Markets

Transcription

1 Overview of Voluntary Renewable Energy Markets Jenny Heeter, NREL State-Federal RPS Collaborative National Summit on RPS Washington, D.C. December 3, 2012 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

2 Compliance and Voluntary Sectors Comprise Large Portion of Renewable Generation; Compliance Obligations are Increasing 250 Annual million MWh Total non-hydro renewable generation Surplus RE Compliance (old) Compliance (new) Voluntary RPS market for new renewables surpassed 60 million MWh in It will likely grow to over 150 million MWh by Notes: New renewables defined based on state-specific distinctions between new vs. existing or on the year in which the RPS was enacted. Some compliance renewables may come from small-hydro facilities. Compliance figures assume that RPSs are met using renewables (not through an alternative compliance payment). Sources: LBNL 2012, NREL 2012, EIA

3 Key Components of Voluntary Market Three primary ways to purchase voluntary green power: o Utility green pricing program o Competitive market o Unbundled REC market Most customers in the voluntary market are residential; most sales are to non-residential The voluntary market is separate from the compliance market, though RE generators may participate in both markets. 3

4 Preventing Double Counting Ensures Market Credibility State RPS rules prohibit using a REC for compliance that is also sold or claimed in a voluntary market Center for Resource Solutions Green-e Energy program prohibits double counting of RECs The Federal Trade Commission s newly released Green Guides clarify that it is deceptive to make a renewable claim without owning the RECs 4

5 Voluntary Market is Growing, by Many Indicators Millions of MWh Annually NREL Estimated Total Voluntary Market Green-e Energy Retail Sales EPA-GPP Sales Tracking System Estimate The overall voluntary market continues to exhibit strong growth. Sources: CRS 2012, EIA 2012, EPA 2012, REC Tracking Systems 5

6 Data Sources and Limitations U.S EPA s Green Power Partnership o Provided data on magnitude of purchases by its corporate, institutional, and government partners. More than 1,300 U.S. organizations; most of large purchasers. Center for Resource Solutions Green-e Energy retail sales o Reports certified sales; represented 65% of total voluntary market in U.S. Energy Information Administration (EIA) o Collects data from utilities and marketers in two ways: Annual data (2011 not released yet) Monthly data (sample of respondents, 2011 data available) Regional REC tracking systems o Publically available data on voluntary RECs issued; some tracking systems report retired RECs as well. 6

7 Unbundled REC Market is Largest Voluntary Sector 40 Annual green power sales (millions of MWh) Utility Green Pricing Competitive Markets Unbundled REC Markets 7

8 Green Pricing Programs are Active in 50 States 2011 Green Power Sales by State (MWh) < ,000 1,000-10,000 10, , , , , ,000 > 500,000 Leading states often have multiple utilities actively engaging their customers to participate in green power programs. Source: EIA, Note: Incorporates EIA reporting entities only. 8

9 Some Utilities Post Annual Green Power Sales Increases Portland General Electric Co PacifiCorp Sacramento Municipal Util Dist Puget Sound Energy Inc Public Service Co of Colorado Connecticut Light & Power Co Northern States Power Co - Minnesota Wisconsin Electric Power Co Indianapolis Power & Light Co Madison Gas & Electric Co Virginia Electric & Power Co Interstate Power and Light Co PECO Energy Co Public Service Co of NM Los Angeles Department of Water & Niagara Mohawk Power Corp. Avista Corp Union Electric Co - (MO) Consumers Energy Co Annual Green Power Sales (MWh) Within the EIA 826 sample, some programs saw declines between 2010 and 2011, while a number posted minor increases. Source: EIA, Note: The EIA 826 dataset is not a comprehensive list of utilities, rather a selection of industry respondents. 9

10 Sample of Green Power Customers per Utility Number of Green Power Customers 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Portland General Electric Co PacifiCorp Sacramento Municipal Util Dist Puget Sound Energy Inc Public Service Co of Colorado Wisconsin Electric Power Co Connecticut Light & Power Co PECO Energy Co Northern States Power Co - Minnesota Los Angeles Department of Water & Power New York State Elec & Gas Corp Virginia Electric & Power Co Consumers Energy Co Public Service Co of NM Madison Gas & Electric Co Niagara Mohawk Power Corp. Wisconsin Power & Light Co Interstate Power and Light Co Total customer participation for the 20 largest programs grew by 6.5% in 2011, to a total of 487,895 customers. Source: EIA, Note: The EIA 826 dataset is not a comprehensive list of utilities, rather a selection of industry respondents. 10

11 Green Power Customer Penetration Mixed 0% 2% 4% 6% 8% 10% 12% Portland General Electric Co Sacramento Municipal Util Dist Madison Gas & Electric Co Lower Valley Energy Inc PacifiCorp Los Alamos County Black Hills Electric Coop, Inc City of Eugene - (OR) Emerald People's Utility Dist Puget Sound Energy Inc Connecticut Light & Power Co Public Service Co of NM New York State Elec & Gas Corp City of Newark - (DE) Public Service Co of Colorado City of Fort Collins - (CO) Central Vermont Pub Serv Corp Poudre Valley R E A, Inc The average participation rate for the largest 20 programs in terms of green power customers in 2011 was 2.9%, ranging from 0.5% to 9.8%, while the average participation rate for all programs reported in the 826 in 2011 was 0.9%. Source: EIA, Note: The EIA 826 dataset is not a comprehensive list of utilities, rather a selection of industry respondents. 11

12 2011 Saw New Institutions Purchasing and Increased Purchases by Others (1/2011 to 6/2012) New to Top 50 Increased Purchase 12

13 Customer Numbers Continue to Surge, Led by Competitive Market Number of Customers 1,400,000 1,200,000 1,000, , , , , Utility Green Pricing Competitive Markets REC Markets Competitive market participation increased by 45% in Participation in utility green pricing programs increased slightly. REC market participation tripled but remained smallest market in terms of customer participation. 13

14 Case Study: Voluntary Retirements Continue to Outpace Compliance Retirements in Texas Millions of MWh Annually ERCOT Voluntary Retirements from Previous Years ERCOT Voluntary Retirements from Current Year ERCOT RPS Retirements ERCOT s voluntary market has exceeded the compliance market for multiple years. Source: ERCOT,

15 Voluntary REC Prices Continue to Decline Voluntary REC price ($/MWh) $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 West Wind National Wind National Any Technology Voluntary REC prices continue to decline from previous levels. Source: Spectron Group,

16 Compliance REC Prices Mixed; Recent Rise in Northeast Markets Compliance REC prices ($/MWh) $70 $60 $50 $40 $30 $20 $10 $0 CT DC DE IL Wind MA MD ME NH NJ PA RI TX Compliance REC spot prices have risen sharply over the past year in New England states. Source: Spectron Group,

17 Community Solar Continues to Take Off; Mix of Voluntary and Compliance Utility/Provider UniSource Energy Services (AZ) San Miguel Power Association/Clean Energy Collective (CO) Colorado Springs (CO) Brewster Community Solar Garden Coop. Inc. (MA) Program Name Bright Arizona Community Solar Program Size (kw) Program Start Year 1, SMPA Community Solar 1, Community Solar Garden Facility Incentive Program Brewster Community Solar Garden Acorn Energy Coop. (VT) Acorn Energy Solar One Poudre Valley REA/Clean Energy Collective (CO) Community Solar Olympia (WA) Olympia WA, SunSlice Deal United Power (CO) Sol Partners Coop. Solar Farm RECs from community solar projects are often used for compliance mandates. 17

18 Strong Growth for Community Solar Number of Programs Added Annually Number of new programs Cumulative capacity (kw) (as of 8/15) 12,000 10,000 8,000 6,000 4,000 2,000 0 Cumulative Capacity (kw) Community solar is a popular niche and appears poised for continued strong growth. It is important to note however that the installed capacity is still quite small ( 10 MW). 18

19 Voluntary Market Highlights 2011 voluntary sales grew on the order of 20% (EPA-GPP 22%, Green-e 19%) New large companies undertaking purchases: Microsoft, McDonalds, Coca-Cola Dodd-Frank did not consider RECs to be swaps; averting concerns about REC markets ERCOT remains largest voluntary market, at 20 million MWh, by significant share Voluntary REC prices remain low, under $1/MWh Mixed participation among utility programs, some losing customers, others showing gains Community solar a small but bright spot, most new programs 19

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21 Contact Information: Jenny Heeter National Renewable Energy Laboratory NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.