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Buying lifts NJ energy year 2020 solar renewable energy credit prices

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Buying lifts NJ energy year 2020 solar renewable energy credit prices

U.S. renewable energy credit prices at major market centers around the U.S. continued to run mixed to close out September.

New Jersey energy year 2019 SRECs were down for the third straight week, to an index of $231.58/MWh, down almost $2 amid a backdrop of ample supply as the yearly compliance deadline approaches. Increased buying interest lifted Garden State 2020 SRECs to an average of $233.33/MWh, up more than 75 cents.

New Jersey class 1 REC prices leaked lower amid limited interest from the buy side. New Jersey vintage 2019 class 1 REC prices were down 2 cents week over week to an average of $6.92/MWh, while vintage 2020 class 1 RECs eased 1 cent to an index of $7.11/MWh.

In the neighboring Maryland market, vintage 2019 tier I REC prices rose 3 cents week over week to an average of $6.88/MWh. Maryland vintage 2020 tier I REC prices were up 2 cents to an index of $7.10/MWh.

Class I REC markets to the north in Connecticut chopped around during the week under review. Connecticut vintage 2019 class I RECs came in at an index of $34.08/MWh, down 17 cents, with vintage 2020 class I RECs assessed at $35.58/MWh, increasing 41 cents on the weekly period.

In a recent report, S&P Global Platts Analytics said REC prices in New England have risen sharply this year due to stronger demand from Renewable Portfolio Standard requirements, the implementation of the Massachusetts Clean Energy Standard and a general stagnation of supply.

A high degree of cross-qualification among the New England states has led to somewhat of a REC price convergence across the region, although Maine's REC markets are trading at a sharp discount, with supply exceeding demand. As of the week ended Sept. 26, Maine vintage 2019 class I RECs were seen at $1.63/MWh, while vintage 2020 class I RECs came in at $2.88/MWh.

Near the end of 2015, Maine class I REC prices rallied, in part, to the announced closures of several biomass plants as well as pulp and paper mills in the state. While Maine RECs are cross-eligible to supply other compliance markets in New England, Maine is one of the only states without restrictions on biomass eligibility, which means biomass, which is cheap and largely available, accounts for the majority of compliance RECs in the state.

However, the lack of fungibility of biomass RECs because of restrictive RPS standards in other states, in part, left the Maine market in oversupply, which worked to press prices lower.

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S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.