Renewable Energy Industry Supports Voluntary Conversion of Fixed REC Price Terms to Index REC Price Terms

Strategic Insights -

The renewable energy industry strongly supports the proposal to allow for a voluntary conversion of contract terms from fixed REC to index REC as described in the Petition submitted by the New York State Energy Research and Development Authority (NYSERDA). This conversion will provide the same ratepayer benefits to existing contracts and accelerate progress towards construction, while maintaining the competitive integrity of the original solicitation and contract award.

Key Takeaways:

  • There is a policy and legal imperative to construct renewable energy projects in New York State, driven by the effects of climate change and the need to meet the state's 70% renewable energy goal by 2030.
  • New York State has made excellent progress in implementing the Clean Energy Standard, with over 60 contracts awarded to procure RECs from renewable energy projects, supporting approximately 4,500 MW of projects.
  • The transition to index REC contracts will allow project developers to exercise this option while making critical decisions regarding contract security deposits, interconnection agreements, and construction planning.
  • NYSERDA's proposed one-time option to convert contracts using a sensible approach and defensible formula is superior to the other options in the Petition.
  • The Commission has twice examined the benefits of the index REC contract approach and found it provides benefits to ratepayers, and should approve the Petition.
  • The renewable energy industry is committed to making investments that will create jobs and economic development, including the commencement of construction of the NYSERDA portfolio of contracted wind and solar projects.
  • The transition to index REC contracts will bring significant economic benefits, including direct payments to New York State and municipalities, expected to be $656 million over the projected life of the projects.

Statistics:

  • 70% of electricity used in New York State is required to come from renewable sources by 2030 (CLCPA).
  • 100% of electricity used in New York State is required to be emissions-free by 2040 (CLCPA).
  • Over 60 contracts have been awarded to procure RECs from renewable energy projects, supporting approximately 4,500 MW of projects.
  • $27 in direct investment is produced for every MWh of production over the project's operating life (2013 RPS Main Tier Program Review).
  • $656 million in direct payments to New York State and municipalities is expected over the projected life of the projects (projected economic benefits from the renewable energy projects).
  • $33 million per year in payments is expected to be made to New York State and municipalities (projected economic benefits from the renewable energy projects).
  • $110 million per year in economic benefits is expected from the renewable energy projects (projected economic benefits from the renewable energy projects).

Sources:

  • New York State Public Service Commission
  • New York State Energy Research and Development Authority (NYSERDA)
  • Alliance for Clean Energy New York (ACE NY)
  • American Wind Energy Association (AWEA)
  • Advanced Energy Economy Institute (AEE Institute)
  • Solar Energy Industries Association (SEIA)
  • 2013 RPS Main Tier Program Review
  • Renewable Energy Standard Program Impact Evaluation and Clean Energy Standard Triennial Review
  • CLCPA (Climate Leadership and Community Protection Act)