David C. Schanbacher, P.E.
TNRCC Air Program Coordinator
Renewable Energy Credit Trading Program
Roy McCoyManager, Congestion & Renewable Credits
Graphics Courtesy of
• Required by Texas Restructuring Legislation
• Goal: Develop 2000 MW new Renewable Capacity in TX by 2009
• Full Program began January 1, 2002
Renewable Energy Credit (REC) Program
New Capacity Ratchets
Year
MW Cumulative New Renewable Capacity
2003 1280
2005 1730
2007 2280
2009 2880
Cumulative Renewable Capacity
0
500
1000
1500
2000
2500
3000
3500
Year
Capa
city
TX Definition of Renewable
Renewable energy technology—Any technology that exclusively relies on an energy source that is
naturally regenerated over a short time and derived directly from the sun, indirectly from the sun, or from
moving water or other natural movements and mechanisms of the environment. Renewable energy
technologies include those that rely on energy derived directly from the sun, or wind, geothermal,
hydroelectric, wave, or tidal energy, or on biomass or biomass-based waste products, including landfill gas.
A renewable energy technology does not rely on energy resources derived from fossil fuels, waste products from fossil fuels, or waste products from
inorganic sources.
• Affects Competitive Retail Providers & Renewable Generators
• Texas-wide (includes non-ERCOT areas)
• Requires Generators to be Certified by PUC
• Requires Competitive Retailers to submit RECs annually for Compliance
REC Program Overview
• Generated from Renewable Resource: – Hydro, Solar, Wind, Geothermal, Biomass
• 1 MWh renewable energy = 1 REC
• Each REC is good for two compliance periods after the year of generation (“three year life”)
REC Attributes
• REC Program: Annual REC Compliance Requirement for Competitive Retail Providers
– Submit RECs annually in proportion to retail load served in TX
• PUC Labeling Initiative: RECs will (likely) be used for verification of advertising claims for green power
REC Uses
• PUC appointed ERCOT as REC Program Administrator in May 2000 Register Program ParticipantsCreate REC accounts Track MWh of renewable energy generatedCreate unique REC IDs for each MWhDistribute RECs to generators, quarterlyDetermine annual REC Allocation for Competitive
Providers Retire RECs submitted for complianceRetire REC’s as they expire
REC Program: ERCOT Administrator Responsibilities
•Maintain public information –Website Monthly report of MWH load in Texas List of REC account holders with contact information List of Facility ID Numbers, and associated information
• Report to the PUCT – Compliance• Verify that Competitive Retailers meet REC compliance requirements
Administrator Responsibilities Continued
• Apply to PUCT for certification as a REC generator
• Apply to ERCOT for REC account
• Generate & Sell Energy • Separate Energy from Attribute as Renewable• Two revenue streams for the same “product”• Flexible pricing—lower Energy cost and recover
difference through sale of RECs
• Receive RECs
• Sell RECs
Participant Responsibilities: Generators
• Competitive Retail ProvidersAnnual REC Compliance RequirementApply to ERCOT for REC account
• Other EntitiesNo Restrictions on Participation Apply to ERCOT for REC account
Participant Responsibilities: Competitive Retailers & Others
REC Software Design: Account Holder Functionality
• All Activities Online – Account Registration
• Secure Portal for REC Account Holders– Enable Account Activities: View, sort, batch,
or singly identify RECs to Transfer or Retire
• At outset—assume 1000 MW generation * 35% CF * 8760 = 3,066,000 unique IDs in year 1
• If trade 3 times before retirement: 9 million transactions for Year 1 RECs alone!
• All data available online for 3 years
• No limits on REC Account Applications
Software Scaling: Potential Transaction Volumes
REC Software Design: ERCOT Perspective
• ERCOT Load and Generation Data used to calculate annual REC requirements (Siebel output)
• Nonmetered and nonERCOT data: API or manually
Questions?
W HY?