While Illinois waits with bated breath for Illinois Commerce Commission (ICC) approval of the Illinois Power Agency (IPA) Long-Term Renewable Resource Procurement Plan, the IPA has announced successful bidders of the first procurement of renewable energy credits (RECs) from solar projects in 2018.
IPA reports two successful bidders in its March 2018 Initial Forward Procurement of RECs from New Utility-Scale Solar and Brownfield Site Photovoltaic Systems, with 400,000 RECs to be supplied annually at an average price of $6.07/REC. A previous utility-scale procurement of 200,000 annual RECs was made in September, 2017. Due to the low number of successful bidders, the announced price of $4.26/REC was blended with 1 million RECs from wind projects.
The announcement covers PV systems larger than 2 MW-AC and/or systems on sites classified as brownfields. The 400,000 annual RECs, each equivalent to one megawatt-hour (MWh) of electricity generation, will be for a term of 15 years, totaling 6 million RECs. The successful bidders were Big River Solar LLC and Dressor Plains Solar LLC. Because only two bidders were chosen, the level of detail released was minimal.
Big River and Dresser Plains will immediately enter into contractual negotiations with the IPA. The first 400,000 annual RECs must be delivered between June 1, 2019 and June 1, 2021.
To generate an average of 400,000 RECs per year, based on an average of 1,500 MWh per MW-AC of capacity, about 267 MW-AC of solar projects will be needed, which must be sited in Illinois or one of the bordering states. The actual size of the projects would depend on system efficiency and available insolation of the sites.
The REC revenue stream is one of three main financial sources for a PV development, the other two being the Federal Investment Tax Credit, still at 30%, plus Modified Accelerated Cost Recovery System (MACRS) depreciation, as well as sale of the actual electricity, which is sold separately from the RECs, typically through long-term power contracts.
The buyers of these RECs are the three major investor-owned utilities in Illinois, Commonwealth Edison (ComEd), Ameren Illinois and MidAmerican Energy Company, all of which must fulfill their Renewable Portfolio Standard (RPS) requirements or make alternative compliance payments. ComEd will purchase 70% of the RECs in this latest solicitation, Ameren 29% and MidAmerican 0.3% for the year 2019-2020. The next utility-scale PV procurement by IPA, also for 400,000 RECs per year, and will begin March 29th with winners to be announced in May.
Under this solicitation the ICC will procure RECs from distributed and community projects, both of which have a maximum project size of 2 MW-AC.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.