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NJ, Mass. renewable energy credit markets continue to sink

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

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Essential Energy Insights - January 2021


NJ, Mass. renewable energy credit markets continue to sink

Renewable energy credit prices continued to leak lower at some major markets around the country during the first week of August.

In New Jersey, solar REC prices continued to tumble in value during the week ended Aug. 4. New Jersey energy year 2017 SRECs posted an average at $188.75/MWh, sinking almost $33, with the energy year 2018 market eyed at $166.25/MWh, losing more than $18 from the week prior.

New Jersey class I REC markets continued to roll lower as well. New Jersey vintage 2017 class I RECs came in at an index of $2.98/MWh, declining 60 cents on the week, while 2018 class I RECs notched an index at $3.54/MWh, down 40 cents week over week.

In Massachusetts, after sinking during the final week of July, prices continued to retreat during the week under review. The Massachusetts 2017 solar I market was quoted at an average of $311.25/MWh during the week ended Aug. 4, while the 2017 solar II market post an index at $270.00/MWh, down almost $9 and $4, respectively.

The Massachusetts Department of Energy Resources, or DOER, announced recently the preliminary minimum standards and compliance obligations for the 2018 SREC I and II programs. Final numbers will be released no later than Aug. 30.

The DOER estimates that the 2018 compliance obligation and minimum standard for the SREC I program will be approximately 838,995 MWh and 1.7903%, respectively, for load served under contracts on or after June 28, 2013. For load served under contracts executed before June 28, 2013, the 2018 Minimum Standard will be 1.1411%.

For the SREC II program, the 2018 compliance obligation and minimum standard will be 1,347,902 MWh and 2.8762%, respectively, for load served under contracts before May 8, 2016.

At the end of July the DOER also announced that the 2016 Solar Credit Clearinghouse Auction fully cleared in the first round. A total volume of 195,464 SREC-Is were bid on by 34 bidders, creating more than enough demand to clear the available auction volume of 18,428 credits. In the SREC-II auction, bid volume totaled 303,956 from 11 bidders against the available auction supply of 243,377 SREC-IIs.

The results of the auction are in the process of being finalized. This year's fixed price was set at $300/MWh for both SREC I and SREC II. After the administration fee, sellers will receive a net amount of $285/MWh.

The Massachusetts clearinghouse auction is designed as a price support mechanism for the market in years when more SRECs are produced than compliance buyers need to purchase. In Massachusetts, the SREC compliance obligation, the amount of SRECs suppliers are required to purchase in any given year, is determined by a formula that takes into account the amount of SRECs to be generated, SRECs banked from previous periods, and the number of SRECs deposited and purchased in the clearinghouse auction.

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CSAPR seasonal NOx price indications slide

During the first week of August, Cross-State Air Pollution Rule emissions allowance price indications were flat to softer.

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CSAPR 2017 seasonal nitrogen oxide allowances were assessed in a bid-and-offer spread of $575 to $650 during the week ended Aug. 4, down from $600 on the bid side the week prior.

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CSAPR 2018 seasonal NOx allowances held to a bid-and-offer spread of $225 to $275.

CSAPR 2017 annual NOx allowances were unchanged as well during the period under review, marked again in a bid-and-ask range of $2.00 to $4.00.

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Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities Pages.