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Renewable Energy Certificates

Renewable Energy Certificates. Presented by Janice Moore, Partner jmoore@mcguirewoods.com (202-857-1752). Renewable Energy Certificates. Represent attributes of electricity generated from renewable energy sources Also called “green tags” Unbundled from the physical electricity

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Renewable Energy Certificates

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  1. Renewable Energy Certificates Presented by Janice Moore, Partner jmoore@mcguirewoods.com (202-857-1752)

  2. Renewable Energy Certificates • Represent attributes of electricity generated from renewable energy sources • Also called “green tags” • Unbundled from the physical electricity • Currency of renewable energy markets

  3. Renewable Energy Certificates • Flexible enough to make attributes a commodity • Not subject to geographic or physical limitations of electricity • Certificates are used to • Show compliance with regulatory requirements • Supply end-use costumers with renewable energy products

  4. REC Challenges

  5. Issues to be Resolved • REC substantiation and verification • National REC Markets • Ownership uncertainty • Emissions markets • REC definition

  6. Tracking and Verification • Bilateral contract between buyer and seller with affidavit as to source, ownership and exclusive sale • Third-party entity that issues certificates

  7. EPA’s SO2 Program – Obstacles • Emissions allowances primarily granted to fossil plants, with limited amount set aside for renewables; optimal allocation is difficult • Program limits participation to utilities; renewable energy developers may participate only if join with a utility • So2 capped by federal law; allowances allocated only to polluting plants

  8. REC Tracking Systems • Verify compliance with renewable energy definitions • Substantiate voluntary marketing claims • Provide protection against trading abuses

  9. REC Tracking Systems • Issue an electronic certificate • Record changes of certificate ownership • Retire certificates when used for different purposes

  10. PJM’s GATSGeneration Attributes Tracking System

  11. GATS • PJM Market (Pennsylvania, New Jersey, Maryland) • Motivated by state requirements fordistributing emissions information to customers • See: http://www.pjm-eis.com and http://www.pjm.com/committees/working-groups/dsrwg/downloads/20050921-item-6-gats-update.pdf

  12. NEPOOL/ERCOT/PJM REC Tracking Systems Comparison

  13. NEPOOL/ERCOT/PJM REC Tracking Systems Comparison

  14. NEPOOL/ERCOT/PJM REC Tracking Systems Comparison

  15. THE END Commercial Litigation | Corporate Services | Financial Services | Health Care Labor & Employment | Complex Products Liability & Mass Tort Litigation Real Estate & Environmental | Taxation & Employee Benefits ATLANTA • BALTIMORE • CHARLOTTE • CHARLOTTESVILLE • CHICAGO • JACKSONVILLE NEW YORK • NORFOLK • PITTSBURGH • RICHMOND • TYSONS CORNER • WASHINGTON, D.C. ALMATY, KAZAKHSTAN | BRUSSELS, BELGIUM www.mcguirewoods.com

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