The availability of wind energy certificates in Pennsylvania's retail electricity market has made a critical difference in the economic feasibility of developing 140 MW of new wind energy projects in the region. Certificates offer important benefits to both green power suppliers and buyers by reducing transaction barriers. They thus lower the cost of renewable energy. Buyers also benefit through the increased flexibility offered by certificate products. The experience described in this paper offers important insights for selling green power certificates and achieving new wind energy development in other areas of the country.
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References
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The PJM Interconnection is responsible for the operation and control of the bulk electric power system throughout major portions of five Mid-Atlantic states and the District of Columbia.
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Represents levelized cost range in nominal terms, assuming availability of a long-term power purchase contract, the availability of the federal production tax credit, and some limited public funding support. Wind may be more or less costly in other regions.
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Green pricing is also offered by municipalities, rural electric cooperatives, and other publicly owned utilities, which, although not necessarily regulated, have exclusive service territories.
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More than 80% of the renewable energy capacity installed for green pricing programs is wind energy. (See: http://www.eren.doe.gov/greenpower/new_gp_cap.shtml) Nevertheless, NREL has found that only a handful of utilities are responsible for the bulk of this development. Most utility programs have resulted in less than 2 MW of new renewables development. See Swezey and Bird, Utility Green Pricing Programs: What Defines Success?National Renewable Energy Laboratory, September 2001. (http://www.eren.doe.gov/greenpower/29831.pdf).
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In some markets, wind energy certificates may also be known as tradable renewable credits (TRCs), renewable energy certificates (RECs), or green tags.
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The Center for Resource Solutions operates several programs to verify the green power sales of participating utilities and marketers. (See http://www.resource-solutions.org/programs.htm.).
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Figure 1 is adapted from materials developed by the Bonneville Environmental Foundation.
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Carnegie Mellon, Background on Carnegie Mellon Wind Energy Initiative, Green Practices Committee, 2001. (http://www.cmu.edu/epc/back.htm).
