Transcript No Slide Title

Generation Attributes Tracking System
Generation Certificates / Monetization of RE Benefits
Presented at:
Association of Power Exchanges
Annual Meeting
Orlando, Florida
Oct. 31, 2005
©2005 PJM EIS
Joseph J. Kerecman
Vice President
PJM-EIS
What is a Certificate?
Power
Green / Environmental
Attributes
Power
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What’s in a Name?
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Green Tags
Green Tickets
Renewable Credits
Certificates
Renewable Certificates
Tradable Renewable Certificates (TRC)
T-RECS
Renewable Energy Certificates (RECs)
GATS Certificates
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The Benefits of Certificates
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Facilitate renewable energy markets.
Creates a common form of currency.
Monetizes the value of attributes.
Creates liquidity in markets.
Assigns emissions to each MWhr.
Independent of geographic boundaries.
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Applications for Certificates
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Substantiate compliance with RPS.
Supply Green Pricing programs.
Provide options for voluntary markets
Provide attribute information on each MWhr. For
disclosure
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Certificate Tracking in North America
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Canada: British
Columbia and Alberta
are participating in
WREGIS, and
Manitoba is
participating in the
northern Midwest
system.
Mexico: northern Baja
is participating in the
WREGIS system.
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Certificates and Compliance Markets
• 13 states with certificate-based RPS compliance
mechanism
- PJM States (NJ, MD, PA, DC, DE)
- ME, MA, CT, RI, NV, AZ, WI, TX, CO
• 5 states likely to use certificates once regional
tracking system is operational
- CA, MN, NM, MT, IL
• 3 states undecided or have other methods to show
compliance
- NY, HI, IA
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The Renewable Certificate (REC) Market
Size of the REC Market
Compliance
Market
Voluntary
Market
Total
2004 REC
Market
Size
(Million
MWhs)
2004 REC
Market
Value
($
Millions)
2010 REC
Market
Size
(Million
MWhs)
2010 REC
Market
Value
($
Millions)
8-13
$140
45
$600
3+
$15 - $45
20
$100 $300
11-16
$155 $185
65
$700 $900
Source: NREL Energy Analysis Office
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Pricing on Renewable Certificates
Voluntary REC Offers (MWh) vs. Compliance
Fuel Type
New Wind
New Solar
Class I
REC Type
Voluntary
Voluntary
Compliance
Compliance
Compliance
Solar
Compliance NJ
©2005 PJM EIS
Location
Price
WA/CA
$2.50 -$5.00
CA
$25.00
MA
$48-51.00
Texas
$11.85
NJ
$7.50
$170-260.00
Source: Evolution Markets LLC
www.evomarkets.com/mmu
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Why the Price Disparity?
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Geography of low-cost renewables
Supply/demand
Volume of purchase
Voluntary vs. compliance markets
Type & vintage of renewables
Regulatory (e.g. penalty levels for noncompliance with RPS)
• Regional markets - State specific
requirements / limitations
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Needs of the PJM States / Market
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PJM initiated the GATS project in response to state regulatory commission
inquiries and effected stakeholders
- Fuel Mix and Emissions Disclosure
• Delaware: fuel mix
• Pennsylvania: fuel mix
• Maryland: fuel mix and emissions
• New Jersey: fuel mix and emissions
• Ohio: fuel mix and emissions
• Virginia: fuel mix and emissions
• Illinois: fuel mix and emissions
• District of Columbia: fuel mix and emissions
- Renewable Portfolio Standards
• New Jersey: began in 2004.
• Maryland: requirements go into effect in 2006
• Pennsylvania: requirements go into effect in 2006
• District of Columbia: requirements go into effect in 2007
• Delaware: requirements go into effect in 2007
• Illinois ?
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PJM-EIS GATS Summary
• PJM Environmental Information Services, Inc. (PJM EIS) owns and
administers the Generation Attribute Tracking System (GATS).
• PJM EIS is a wholly-owned subsidiary of PJM LLC
• PJM-EIS was capitalized independent of PJM LLC
• PJM-EIS is a non-regulated company
• Use of GATS is on a voluntary basis, and through subscription
• State regulators at their discretion may require the use of GATS
certificates.
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What is GATS?
• GATS - a regional environmental registry and information
system that will track the environmental and fuel attributes
of generation.
• The system will:
• assist Retail Load Servers (LSEs) in their compliance
with applicable emissions and fuel disclosure
requirements and with state-level Renewable Portfolio
Standard (RPS) regulation or renewable policy
• enable voluntary bilateral markets and marketing claims
for renewables.
• provide state agencies with reporting and verification
• provide renewable generators with a means to
monetize their renewable attributes and qualification
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GATS Design
• GATS is designed to:
• Ensure accurate accounting and reporting of generation
attributes
• Facilitate bilateral transactions of attributes via certificates
between market participants
• Support the current requirements of various state agencies and
have the flexibility to accommodate varied and evolving state
policies and programs
• Mitigate seams issues with adjoining markets to allow the
potential of trading certificates across regions
• Promote a robust renewable market
• Leverage PJM market settlement information and environmental
information from the US-EPA
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Provisions of the System
• Banking certificates to accommodate varying certificate life spans
as determined by state policy or regulation.
• Enabling varying state programs, and their definition of preferred
attributes / resources:
• Wind, Solar, Biomass, etc.
• Waste coal, pump storage, fuel cells
• Moving certificates to non LSE’s, bilateral voluntary markets
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direct sales to retail entities
• Behind the meter generation resources and Imports and exports
• A Bulletin Board to facilitate bilateral trades
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System Functionality Overview
Each MWh is given a unique electronic certificate
This certificate may contain any
information relevant to market
participants and capable of
being tracked by GATS.
Certificate No. 123456789
Acme Generating Station
Pollutant
lbs
NOx
1.5
SO2
0.01
CO2
1,900
Fuel: Natural Gas
Location: Example, PA
PA. Class I: No
PA. Class II: No
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MWh
- Certificates’ data will be compiled
using PJM generation and publicly
available data from EPA and EIA.
- Where data do not exist or are faulty,
generators may choose to update
their information based on agreed
upon best practices.
- Default assumptions will be
developed as a last resort for
generators with faulty or no data who
choose not to update their
information.
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GATS Certificate Creation Cycle
Start of Monthly
Certificate Creation Cycle
10th Business Day
Account Holder review
period
GATS Certificates Created
Last Business Day
Repeated Monthly
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GATS Subscription
Use of the GATS
• All GATS users (“Subscribers”) must enter into the GATS Terms of Use
agreement to gain access to use the GATS.
• Subscribers will be charged an annual subscription fee and monthly
volumetric fees for use of the system.
• Subscribers must also attest that any information they provide into the
GATS database will be true and correct.
• Contractually commits all users to comply with all of the requirements
of the GATS Operating Rules.
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GATS Subscriber Group / State Agency Advisory Committee
• Subscriber Group
• Open to all Subscribers
• Meets at least semi-annually
• Objectives:
• Provide input into the development and maintenance of GATS
Operating Rules
• Have access to information and training pertaining to GATS
• State Agency Advisory Committee
• Participation by representatives of state agencies whose policies are
being effectuated through GATS
• Meetings as needed or in conjunction with Subscriber Group meetings
• Objectives:
• Provide input into the development and maintenance of GATS
business rules
• Analyze need for future system additions and modifications given
evolving state requirments
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PJM-EIS Website
Access the PJM-EIS website by logging onto: www.pjm-eis.com
The PJM-EIS website
provides links to the
“GATS Operating
Rules” and “GATS
Terms of Use” for your
reference
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GATS Reports
There are three types of reports that are available:
Account Holder
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State Agency
Public
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GATS Reports
Account Holder Reports
There are ten
different Account
Holder Reports
available in GATS.
These reports
provide updates
and the status of
current account
information as well
as transaction
History
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GATS Reports
State Agency Reports
There are seventeen
different State
Agency Reports
available in GATS.
These reports
provide updates
and the status of
current account
information as well
emissions reporting
information
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GATS Reports
Public Reports
There are eight different
Public Reports available
in GATS. These reports
provide general GATS
updates and statistics.
These reports are also
accessible from the
GATS Login Page
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If you have any questions… Primary Contacts
Jaclynn Geist
GATS Administrator / PJM-EIS
(610) 666-2245
[email protected]
Joseph J. Kerecman
Vice President / PJM- EIS
610 666-4772
[email protected]
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If you have any questions…
For more information on GATS:
http://www.pjm-eis.com/
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