FirstEnergy, the giant Ohio-based company that owns power plants and transmission lines in several midwestern and northeastern states, is running out of arguments for its proposed bailout. The Public Utility Commission of Ohio (PUCO), which is currently considering the proposal by FirstEnergy for substantial, customer-funded subsidies to bail out its uneconomic power plants, has suggested… Keep reading →

Markets Stabilise After Turbulence Last Week

With a projected 2015 loss, the demand response leader seeks growth in enterprise and utility software.  Over the next few years, EnerNOC wants to bring in as much money serving up enterprise efficiency and energy management software as it does in its traditional field of demand response. But that transition won’t come without some significant… Keep reading →

California Adopts Sweeping Plan To Combat Greenhouse Gas Emissions

Far from perfect but the best there is  Winston Churchill famously said, “Democracy is the worst form of government, except for all the others.” Despite its many flaws, that is how its supporters characterize PJM’s capacity market. As proof of its appeal, countries as far away as the UK, Germany, So Korea, to name a… Keep reading →


With GE’s software, stored wind can increase three revenue streams. After premiering its 2.5-megawatt, 120-meter rotor Brilliant wind turbine in February, GE is now announcing the commercial installation of the first three models that will integrate energy storage capability. GE’s (NYSE:GE) engineering advances have long been moving toward two broad objectives: achieving a more rapid… Keep reading →

Are deregulated power markets producing the long-term, reliable energy infrastructure that manufacturers need to invest and expand?

The issue looms because the Marcellus Shale natural gas boom has raised the potential for a “manufacturing renaissance” in Pennsylvania and other shale states, David Ciarlone, manager of Global Energy Services for Alcoa told the Federal Energy Regulatory Commission’s (FERC) technical conference on growing electricity and gas industry interdependencies recently held in Washington, DC. Keep reading →

Regional transmission organizations (RTOs) must be more transparent in their operations and accountable to the states where they operate, says Malcolm Woolf, Director of the Maryland Energy Administration.

“We are at the mercy of PJM,” the Middle Atlantic regional transmission operator, said Woolf. “We’re increasingly aware we do not have the tools we need to solve problems” of electricity supply and price for state citizens. Keep reading →

Offshore wind power has become a significant component of several European countries’ electricity generation portfolios and now the US is looking to expand the power generating capacity of wind beyond its coastline.

The economics can be complex – particularly if the production tax credit expires at the end of 2012 – but offshore wind has the potential to become an affordable source of electricity for some of the largest US markets. Keep reading →

A plan to build a 100-mile undersea cable linking power grids on Hawaii’s islands would help meet the state’s ambitious renewable-energy goals, reduce its heavy dependence on imported oil, and cut electric bills for consumers.

It could also become an important test case for the ability of existing grids to rely on power from renewable sources. If it proves, as its backers hope, that grids can take more power from renewable sources than the maximum levels currently assumed by the industry, that would be a big boost to plans for offshore wind farms along the U.S. East Coast. Keep reading →

Allowing power from electricity storage to be counted toward meeting renewable portfolio standards would boost integration of advanced storage technologies into the electricity system, speakers told the Electricity Storage Association conference in Washington last week.

Terry Boston, CEO of PJM, the nation’s largest grid operator, said he’d like to see states let up to 25% of their RPS be met with storage when the storage systems are fed by clean sources like wind and solar. Keep reading →

The NJ EDC SREC Auction for 26,325 SRECs appeared to spook the market into believing RY 2011 may have more than expected supply. This variance from expectations has caused SREC prices to fall from $665 to $560 in July.

In forming expectations for supply in the market, we must reiterate modeling the market fundamentals of installation rate and power generation based on solar irradiance to determine the maximum SREC production. Our analysis shows–though the market may come close to balancing supply and demand–that it is unlikely to end up oversupplied in RY 2011.

See previous in-depth analysis of the solar markets: Divining The Mysteries Of SREC Markets

Market Fundamentals

Reporting Year (RY) 2011 closed with a final capacity of 339.6 MW, more than double the capacity of the RY 2010 closing of 168.3 MW. The best-case scenario, based on 1200 SRECs per 1 MW of installed capacity for all active projects in RY 2011, could produce 286,000 RY 2011 SRECs from the installed capacity.

As stated in our previous blog, 16,000 more SRECs should have been generated in the best-case scenario for RY 2010. These SRECs could still be minted in RY 2011 making the total available SRECs for RY 2011 compliance 302,000 SRECs. This still remains short of the RPS target of 306,000 SRECs, providing little justification for SREC prices declining so far below the SACP of $675 (see upper bound red dashed line in the chart below).

A portion of the RY 2010 SRECs became available in the July 2011 EDC Auction with an additional 1,911 RY 2010 SRECs available. This leaves approximately 14,089 RY 2010 SRECs unaccounted for.

The last minting of SRECs for RY 2011 was 46,789 in June bringing the total PJM GATS issuance to 270,608, assuming the June minting was for only RY 2011 SRECs. Including the known RY 2010 SRECs described above, this brings the total minted SRECs available for RY 2011 compliance to 272,519.

The EDC Auction is hosted quarterly for the sale of SRECs generated in the previous quarter. With the previous auction hosted in April, the July auction was for the sale of SRECs minted from April, May and June. In this past quarter, more than 120,000 SRECs were minted, a record minting for the NJ SREC market.

The 26,325 offered in the EDC Auciton were from this record Q2 minting and not in addition to it. Regardless, with total SRECs issued at 272,519 SRECs, an additional 26,325 would not push the market into over supply.

Possible Explanations

A possible trigger of this could be the lingering possibility of RY 2010 SRECs flooding the market. 14,089 RY 2010 SRECs, 1,911 RY 2010 EDC Auction SRECS, on top of the 270,608 RY 2011 SRECs issued by July, plus 26,325 RY 2011 EDC Auction SRECs, do total more than 306,000 and thus lead to oversupply for RY 2011 (see table below for summary).

However, this is a false conclusion. We must reiterate that the RY 2011 EDC Auction SRECs are a subset of the 270,608 RY 2011 SRECs generated.

Page 1 of 212