Renewable Energy Credit (RECs) Market Dynamics

November 30 - December 1 2023 | Live Streaming Online

A BankWebinars.com Program

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

The surge of public demand for renewable energy solutions to address decarbonization and climate change objectives has pushed up the value and importance of renewable energy credits (RECs). How utilities, load serving entities and corporate power consumers source their RECs is now a business in its own right. It requires meticulous awareness as well as attention to the nuances of REC procurement, markets, and trading.

This symposium will dive into the dynamics of both voluntary and compliance REC markets, with particular emphasis on how they are formed and influenced through regulation, policy and evolving consumer awareness and demand. REC market experts will characterize active and emerging REC markets in the U.S., emphasizing key financial and contractual considerations. They will interpret trends and dynamics in regulated and retail utility markets and green pricing programs, along with corporate renewable procurement through power purchase agreements (PPAs). The program will offer insight into the important REC processes that utilities and corporate REC participants must perfect – such as verification, certification, system administration, and appropriate financial structuring – to achieve their optimum transactional value. Finally, attendees will explore with subject matter experts what ISO or FERC initiatives regarding carbon pricing could portend for the pricing of RECs and other renewable energy market products.

Learning Outcomes

Assess the current landscape of environmental markets in North America

Identify the fundamentals of REC market dynamics, transaction and trading

Detail the requirements of registering, selling, settling and tracking RECs

Recognize compliance REC markets drivers, key trends and transactional elements

Discuss voluntary REC markets drivers, key trends and transactional elements

Review carbon policy and pricing initiatives, their performance to date and what the policies of a new (green-friendlier) administration portend

Discuss tips for trading and hedging RECs – deciding what to buy and other aspects – of “in-the-money” transactions

Define critical REC transaction elements from a project developers’ perspective

Evaluate optimal business and utility/LSE strategies in environmental markets

Agenda

THURSDAY, NOVEMBER 30, 2023

9:00 a.m. – 4:45 p.m. Central Time

9:00 – 9:15 a.m. :: Overview & Introductions

9:15 – 10:30 a.m. :: Survey of Renewable Energy Markets & Renewable Energy Credit (REC) Market Dynamics

Background and history of RECs

5 Ws of RECs

Structure of RECs from a legal and regulatory standpoint

Renewable portfolio standard (RPS) programs

National elements

Regional and state elements

States with RPS programs and/or related RECs structures

How are RECs, originated, created, and transferred?

REC procurement and sale

Regulatory/legislative issues

Update on regional REC market activity

Renewable Energy Credit (REC) Market Dynamics

REC market forces and dynamics

REC statistics by technologies

REC statistics by state

Multi-state qualification

Compare and contrast regional markets

Solar renewable energy credits (SRECs)

Carve-outs, set-asides and other focusing instruments

Describe a summary of oversupply/undersupply in the RECs market(s)

Identify the function of alternative compliance payment mechanisms

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:00 p.m. :: Survey of REC Registries & Administrative Aspects of Operation

Overview of RECs regional markets and North American REC Tracking Systems, or Registries

Texas Renewable Energy Credit Program

PJM- Generation Attribute Tracking System

Western Renewable Energy Generation Information System (WREGIS)

Midwest Renewable Energy Tracking System (M-RETS)

North American Renewables Registry (NAR)

Michigan Renewable Energy Certification System (MIRECS)

Nevada Tracks Renewable Energy Credits (NVTREC)

North Carolina Renewable Energy Tracking System (NC-RETS)

NEPOOL – Generation Information System (New England)

Review how different registries operate

Tips for programmatic day to day administration and operation

Compare and contrast regional markets: key differences

Midwestern RECs: understanding the opaque market and evaluating future opportunities

12:00 – 12:45 p.m. :: Lunch Break

12:45 – 2:00 p.m. :: REC Transactions & Trading Components

Identify REC market players (buyers, sellers, brokers, traders)

Technicalities of a REC transaction process

Successful transaction mechanisms

Trade execution

Structured transactions

ETRM solutions

Inventory management

Certificate tracking

Obligation calculation and management

Cross-market compatibility

Proper REC valuation

Accounting processes

Reporting

Day in the life of a REC market participant

Trading RECs in voluntary and compliance markets

Volume of RECs

Value of transactions

Types of transactions

2:00 – 3:00 p.m. :: Compliance REC Market Landscape for Utilities, Load Serving Entities and Retail Energy Providers

Regulated vs. deregulated power markets

Relationship of REC tracking systems mirror the ISO/RTO regions

Retail power sales and renewable generation and region/ISO

Installed wind capacity vs. wind resource map

Map of U.S. installed solar capacity vs. solar resource map

Regions and REC products traded

Types and method of transacting

3:00 – 3:15 p.m. :: Afternoon Break

3:15 – 4:45 p.m. :: Compliance REC Transactions from the Perspective of Sponsors, Project Developers, Merchant Generators, Utilities, and Marketers

RECs role in the overall financing of a solar project

Piecing together a financial package for RECs

Available financing models in light of the IRA

Key provisions for renewable tax credits under the IRA

Project finance through REC transactions

Selling long-term REC obligations

Hedging forward REC compliance needs

Debt and equity

Contracts to sell RECs

Different types of REC contracts

Structuring long-term REC contracts

REC contract implications on financing

Contract/transaction case studies

Has the inflation reduction act (IRA) changed anything?

Transfers of tax credits to third parties

Key considerations and next steps for renewable energy developers, producers, and investors that are considering a purchase or sale of credits

4:45 p.m. :: Course Adjourns for Day

FRIDAY, DECEMBER 1, 2023

9:00 a.m. – 12:30 p.m. Central Time

9:00 – 10:00 a.m. :: Voluntary REC & Green Power Markets Landscape

Background, status, and trends

Voluntary REC market buyers and players

Corporations and large organizations

Residential consumers

Product types

Selling in regulated and retail markets

Needs and considerations for existing programs

System administration for voluntary RECs

C&I REC market and purchase process

Tracking systems

Technicalities of key processes in the voluntary REC market

Typical processes and interactions

Certification and eligibility

Purchase process for commercial/residential

Bundled RECs in power purchase agreements

Certifying long-term contracts

Direct certification

10:00 – 10:15 a.m. :: Morning Break

10:15 – 11:15 a.m. :: Voluntary REC Market Trends & Transactions for Corporate Renewable Procurement and Green PPAs

This session will discuss growing national trends in corporate and industrial renewable energy procurement, and how these projects are driving demand for clean energy and growing voluntary renewable markets across the country. The session will also address specifics of negotiation of renewable power purchase agreements (PPAs) associated with these projects, discussing considerations from both the buyer and seller perspective, and tips to optimize the purchase and sale of a project’s associated environmental attributes.

11:15 a.m. – 12:30 p.m. :: Status and Outlook for Carbon (and Other Clean Energy, Non-REC) Markets

Current landscape of carbon and other clean energy, non-REC markets initiatives underway in North America

General framework of elements that carbon pricing measures need to address, if implemented

Regulatory concepts under consideration that might impact the power markets

Examine what might work and what might not among carbon pricing measures in process

Evaluate the prospective impacts on slices of renewable energy markets if carbon pricing measures are enacted

Locational marginal emissions” (LMEs) – a force multiplier?

Should there even be centralized (federal) or multiple regional attribute markets?

Has the IRA altered the necessity and/or value proposition of attribute markets?

12:30 p.m. :: Course Adjournment