Massachusetts Offers $25 Million for Renewable Energy Certificates
February 23, 2005
The Massachusetts Technology Collaborative (MTC) announced in late January that its Renewable Energy Trust is offering $25 million to support renewable energy projects that will generate up to 50 megawatts of clean power for the New England electric grid. The trust's Massachusetts Green Power Partnership provides long-term funding commitments to purchase renewable energy certificates (RECs) and other price supports for clean energy projects. The new request for proposals (RFP) starts the second round of awards; the first round led to $32 million in funding commitments for six projects that will generate close to 100 megawatts of clean energy, including two large wind power plants (covered in last week's newsletter), a 50-megawatt biomass power plant, and small installations of landfill gas, hydropower, and solar energy systems. Proposals for the new RFP are due on March 18th. See the press release and RFP from the Massachusetts Technology Collaborative.
Although most of MTC's commitments to purchase RECs are for future projects, the agency is already buying RECs from a landfill gas project. MTC buys the RECs and then auctions them off to electricity providers, which can either use them to meet the requirements of the Massachusetts Renewable Portfolio Standard (RPS) or to meet the needs of any voluntary green power program. In early February, MTC had Evolution Markets LLC auction off 5,011 megawatt-hours (MWh) of RECs, which sold to two successful bidders at an average price of $51.12 per MWh. Some companies are also bypassing the MTC, selling RECs directly into the Massachusetts power market, as Conservation Resources Group did for a New York landfill project in 2004. See the press releases from Evolution Markets and the Conservation Resources Group (PDF 53 KB). Download Acrobat Reader.
RECs represent the attributes of electricity generated from renewable energy sources, and are usually sold separately from the actual electricity. According to a new DOE report, an estimated 3 million MWh of RECs were sold in 2003. Fourteen of the 18 states with RPS policies use RECs, creating an annual potential market of about 13 million MWh. According to the report, the REC market could reach 65 million MWh by 2010. See the report, "Emerging Markets for Renewable Energy Certificates: Opportunities and Challenges" (PDF 2.0 MB).