A bill has been submitted to the State of Pennsylvania legislature that would sell the renewable energy certificates (RECs) the state recently purchased as part of a solar power purchase agreement to third parties, and would use the proceeds to pay for capping abandoned oil and gas wells within the state.
The document, Senate Bill 945, states:
“…all proceeds from the sale, auction, transfer or other disposition of an alternative energy credit in section 3 shall be deposited into the Marcellus Legacy Fund (and) shall be used by the Commonwealth Financing Authority for orphan or abandoned oil and gas well plugging.”
The senator estimates that $11 million a year could be raised from selling the credits.
In an interview with NPR, Sen. Carolyn Comitta (D-Chester) expressed worries that it could prevent the state from meeting its own clean energy goals. PennFuture suggested that this bill, signed on its own, might dampen the market price for these credits within the state because current clean energy goals have been met.
An Opinion from the Author
Do it! Who cares? But let’s make sure it only gets signed if the community solar legislation, also currently being considered, gets signed. This way, we support our environment from both ends of the candle — by deploying new emission free generating capacity and by cleaning up old fossil facilities.
The goal of renewable energy certificates is to get more solar power built. The tool was designed to allow for a clear demarcation between the electricity generated by solar panels and the more ephemeral “environmental attributes” of emission free electricity.
According to SRECTrade, the value of the attributes in Pennsylvania is just under 3.9 cents per kilowatt hour. That value is a market price that varies based upon meeting clean state legislated energy goals.
The way it works is simple. First, the solar power facility sells its electricity into the marketplace. In the case of this legislation, one of the deals is a seven project, 191 MW power purchase agreement signed to offset 50% of the state’s electricity usage.
For each 1,000 kilowatt hours of electricity generated by solar hardware, a single solar renewable energy certificate (SREC) is minted. It’s really just a digital notation somewhere in the cloud on some computer. It is not a tangible item (unless you print out a hardcopy of the record, like a luddite).
The power companies that are generating electricity are forced to buy these credits to meet clean energy legal requirements set by the state. This way, instead of tax payers paying solar incentives through the government – the power company pays for it directly, via a market technique, in order to balance out its polluting ways.
Yes, private electricity buyers are going to pay for it, one way or another. But in reality we will all pay for climate change, one way or another.
For those of us who are highly motivated to sell solar power to the world, we must do whatever it takes to get volume deployed! Yes, technically, the state will no longer be able to say that it is “solar powered”. But technically, our goal here is to clean the grid, not mint SRECs.
According to the Solar Energy Industries of America, Pennsylvania gets 0.39% of its electricity from solar power, and is fighting for a community solar program. It needs all the push it can get. Giving this bill to the general public, while trying to pass the aforementioned community solar bill, could be just what the democracy ordered.
And if we get a double benefit in that we close a few abandoned wells, then let’s get it done! Yes, the few hundred wells per year that this fund would close is a drop in the bucket compared to the 200,000 abandoned wells in the state. But we’ve got a long road ahead, and there’s still a lot of grease to clean off our politician’s hands – with some clean, fresh, home grown solar electricity!
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: firstname.lastname@example.org.
“For each 1,000-kilowatt hours of electricity generated by solar hardware, a single solar renewable energy certificate (SREC) is minted. It’s really just a digital notation somewhere in the cloud on some computer. The power companies that are generating electricity are forced to buy these credits to meet clean energy legal requirements set by the state. This way, instead of taxpayers paying solar incentives through the government – the power company pays for it directly, via a market technique, in order to balance out its polluting ways.”
Like crypto currencies, where will these credits be stored?
A [ ] On a government server in Washington DC.?
B [ ] On a government server in State of Pennsylvania?
C [ ] On a private server owned by the utilities?
D [ ] On a private server at “Solar Energy Industries of America”?
A and B could be tampered with by political agendas and lobbyists and defiantly not C because you do not want the fox to be guarding the hen house. Most likely not D except they are capitalizing on solar sales just as oil companies do oil sales. Here lies the problem with the industry, we do not know who to trust with the data.
Edward F Dijeau: SRECs in PA are registered with PJM GATS. This is a service run by an independant consulting firm, overseen by the PJM grid authority, a member-owned clearinghouse for power and related transactions. Large power producers and consumers collaborate to assure that transactions are done honestly, and this is overseen by regulators. This type of transaction, SRECs, is among the smallest and least material of transactions that flow through PJM. The big stuff is all the payments for all the power in parts of 11 states + DC. See https://www.pjm-eis.com/getting-started/about-GATS.aspx
Mr. Weaver’s solar company is in MA, why the interest in PA? The abandoned wells should be the financial responsibility of the fossil fuel companies that are operation in PA, not the Solar generating sites. Have all the fracking companies assessed a percentage of production fee to be used in gas field retirement. My SRECs aren’t paying enough now let alone if this scheme passes the legislature.
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.