Renewable Energy Credit Pricing to Fall in New England with Push from Offshore Wind – Environment + Energy Leader

While renewable energy credit (REC)  pricing is currently strong across several New England states, developer interest in the region has grown, as have commitments to offshore wind in multiple states. S&P Global Market Intelligence projects that increasingly favorable wholesale power economics and expanding contributions from offshore wind may pressure the New England REC market, causing prices to fall in the years ahead.

“As global energy markets continue to shift their reliance on fossil fuels to alternative sources, organizations may look to RECs to help comply with increasing green energy mandates,” says Steve Piper, research director for energy at S&P Global Market Intelligence. As more RECs are purchased, the demand and production of renewable energy increases.

An REC is created for every one-megawatt hour (MWh) of electricity generated and delivered it to the grid. The green benefits of generating electricity using renewable sources can then be sold to other entities via RECs on the open market. RECs are often used to offset carbon emissions of a company and as a path to achieving 100% renewable electricity use.

“RECs are the accepted legal instrument through which renewable energy generation and use claims are substantiated in the US renewable energy market,” according to the EPA. “Because the physical electricity we receive through the utility grid says nothing of its origin or how it was generated, RECs play an important role in accounting, tracking, and assigning ownership to renewable electricity generation and use. On a shared grid, whether from on-site or off-site resources, RECs are the instrument that electricity consumers must use to substantiate renewable electricity use claims.”

For example, Fenix, one of the largest terminal facilities at the Port of Los Angeles, announced last week that it has used RECs for 100% of the electricity the company consumed in 2020. The purchase of RECs is helping Fenix reach the goal of becoming carbon neutral. Similarly, agribusiness and food ingredient company Bunge announced it is purchasing RECs to offset energy use at its Fort Worth, Texas, packaging facility.

<!–

–>

Leave a Reply

Your email address will not be published. Required fields are marked *