The renewable energy landscape is dynamic and ever-changing; consisting of unique market participants such as:
As a wind, solar, hydro, landfill gas, anaerobic digestor or biogas independent power producer ("IPP") or renewable developer, in addition to traditional commodities like power and capacity, your power portfolio generates both environmental commodities such as:
- Renewable energy credits ("RECs")
- Solar renewable energy credits ("SRECs")
- Carbon credits
GP Energy management is works to optimize and managing these revenue streams through a variety of structures such as:
- Power purchase agreements ("PPAs")
- Virtual power purchase agreements (“VPPAs”)
- REC off-take agreements
- Bundled contracts that include both power, capacity and RECs for both long and short-term tenors.
With the growth of state-level renewable portfolio standards ("RPS") competitive electricity suppliers (also known as LSEs, ESCOs, ARES, CRES, or REPs) are compelled more than ever to purchase annual RECs to achieve these state level standards and remain compliant. Those ESCOs looking to go above and beyond the minimum standard oftentimes offer voluntary green products such as 100% renewable energy, frack-free gas, clean power, clean gas, or carbon-free gas.
GP Energy Management sources the proper products at the right price to satisfy both a retailer’s compliance and voluntary needs.
With the proliferation of corporate sustainability goals a new segment of clean energy and green energy buyers have emerged. Looking to foster the creation of new renewable energy to adhere to additionality standards, commercial and industrial corporations are aggressively exploring virtual ppas, REC purchases, and onsite renewable development.
GP Energy Management leverages it’s power, gas, and renewables expertise in both the wholesale and retail energy markets to create and execute customized corporate sustainability strategies. Whether its building onsite solar, executing a long-term virtual PPA with a nearby wind power plant, or simply buying green power or green gas supply in a deregulated market, GP empowers its corporate clientele to achieve their sustainability goals in an economically and philosophically sound manner.
The Renewable Energy Basics
QUESTION: What is a renewable energy credit? What is a REC?
ANSWER: A renewable energy credit is also known as a REC. One REC is the dis-aggregated renewable attribute associated with 1 MWhr of electricity derived from a renewable resource such as solar, wind, hydro, landfill gas, biogas, waste coal, etc. The REC and the electricity can be sold together (bundled) or sold as standalone products.
QUESTION: What is a Renewable Portfolio Standard? What is an RPS?
ANSWER: An RPS is a set of rules or legal statutes that compel electricity sellers such as utilities, power cooperatives, and competitive retail suppliers to purchase a portion of their electricity portfolio from renewable resources. This can be achieved through a bundled power/REC purchase, or can be achieved by purchasing standalone RECs and retiring them per state statutes. Currently, there is no federal RPS, but only state level renewable portfolio standards. RPS compliance and adherence usually falls under the purview of a state’s department of public service, board of public utilities or public utility commission.
QUESTION: What is Virtual PPA?
ANSWER: A Virtual PPA is essentially a financial transaction governed by the CFTC that enables a renewable generator to sell it’s power to a buyer as opposed to a physical transaction settled in an ISO or RTO. A Virtual PPA can be classified as a financial swap.
QUESTION: What is the difference between renewable energy and green energy?
ANSWER: It really depends on where the claim is being made. The definition of renewable energy or green energy is typically defined within a state's RPS and regulated by the public service commission. For example renewable energy in Connecticut backed by a fuel cell REC, may not be considered renewable energy in Ohio at all. Perhaps the emissions and environmental footprint of a fuel cell REC is less than the typical electricity generation profile in Ohio, so it might be considered “clean," but not renewable since its fuel is natural gas. Similarly, a waste coal power plant can produce a REC in the state of PA since its fuel is regenerative, but it produces significant emissions and would not be considered clean.
QUESTION: What is additionality?
ANSWER: Aditionality applies to a transaction or incentive structure that exists to support renewables , it must support the creation of new renewable resources and not be available to existing or older renewable resources that are not in need of that revenue for financing purposes.