Voluntary Renewable Energy Markets 101

Transcription

1 Voluntary Renewable Energy Markets 101 Jenny Heeter, NREL Renewable Energy Markets Conference 2013 Austin, Texas September 23, 2013 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

2 2 History of the Voluntary Market The voluntary market (or green power market) allows consumers and institutions to purchase renewable electricity to match their electricity needs. The voluntary market is independent from the compliance market, which includes obligations to meet state renewable portfolio standards (RPSs). Voluntary options emerged in anticipation of electric market restructuring in the 1990s; utilities wanted to offer choice. The ability of residential customers to choose suppliers was predicted to drive voluntary purchases; however, non-residential customers have actually been driving the voluntary market.

3 3 How to Purchase Utility Green Pricing Programs: About 800 utilities offer programs, though sales and customers are dominated by a small number of programs. Competitive Suppliers: Products offered in states with retail competition. Unbundled REC Marketers: Primarily used by large commercial and institutional customers. Unbundled REC products are separate from electricity purchases; RECs can also be part of a bundled product.

4 4 Ability to Purchase Green Power Today, about 50% of consumers have the option to buy green power from their utility or electric supplier; all customers have the opportunity to purchase RECs (renewable energy certificates).

5 5 Resources for Buying Green Power The DOE s Green Power Network ( links to utility green power programs, competitive suppliers, and unbundled REC providers

6 Cumulative Capacity (kw) Number of Programs Added Strong Growth for Community Solar 25,000 20,000 15,000 10,000 5, (as of July) Planned California s AB 32 sent to Governor for signature. Would establish community solar that is additional to the state s RPS. Community solar is a popular niche within the voluntary market, and a number of additional programs are planned. The installed capacity to date is still quite small ( 15 MW) in the context of the larger green power market. 0 6

7 7 How Large is the Voluntary Market? More than 1% of total U.S. electricity generation.

8 Millions of MWh 8 Voluntary Market Increases 17% in Market Sector % Change CAGR Unbundled REC Market 56% 25% Competitive Markets 12% 6% Utility Green Pricing 11% 5% Retail Total 37% 17% * 2012 Utility Green Pricing Competitive Markets Unbundled REC Markets The overall voluntary market continues to exhibit strong growth, increasing 37% from 2010 to 2012, representing compound annual growth rate (CAGR) of 17%. The unbundled REC market saw the largest growth 56% from 2010 to 2012 (CAGR of 25%).

9 9 Voluntary Supply Dominated by Wind Landfill gas and biomass 12.79% Wind 80.10% Hydro 6.19% Solar 0.62% Geothermal 0.30% In 2012, 80% of the supply for the voluntary market came from wind. The share of solar increased from 0.2% to 0.6%, and provided approximately 2% of supply for utility green pricing programs.

10 Millions of MWh 10 Nonresidential Purchases Dominate Market Nonresidential sales Residential sales % 75% 75% 76% 73% 75%* 78% * 2012

11 Millions of MWh Annually ERCOT Voluntary Retirements Decline ERCOT Voluntary Retirements from Previous Years ERCOT Voluntary Retirements from Current Year ERCOT RPS Retirements Voluntary retirements in 2012 declined nearly 40% from 2011, while RPS retirements increased about 34%. Decreased voluntary retirements are likely due to an increase in REC price in Texas, causing some national REC purchasers to leave the Texas market. Source: ERCOT,

12 12 How much do products cost?

13 Residential Premium (cents/kwh) 13 Utility Green Pricing Premiums Decline ~6% Annually Average Median

14 14 Voluntary REC Prices Voluntary REC prices started to rise in mid-2013 after years of decline; September prices more than $1/MWh. Source: Spectron Group 2013.

15 15 Resources Subscribe to Updates Publications

16 Contact Information: NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.