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Renewable Energy Certificate Process Review and Recommendations

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Presentation on theme: "Renewable Energy Certificate Process Review and Recommendations"— Presentation transcript:

1 Renewable Energy Certificate Process Review and Recommendations
NAESB RMQ/WEQ Executive Committee Distributed Ledger Technology Task Force

2 Overview Task Force Responsibility Background Findings Voluntary REC
Recommendations

3 Task Force Responsibility
Retail Markets Quadrant (RMQ) 2019 Annual Plan Item 7.a Wholesale Electric Quadrant (WEQ) 2019 Annual Plan Item 7.b.i, Review current Renewable Energy Certificate (REC) processes for financial and/or sustainability accounting/reporting to determine if Business Practice Standards and/or protocols are needed.”

4 Background Annual Plan Items Added to 2019 Annual Plans & Approved by NAESB Board of Directors in December 2018 Kickoff June 21st for Taskforce review of REC process and Distributed Ledger Technologies (DLT) Three additional conference calls held to educate and garner consensus around existing REC process standardization opportunities

5 Background A Renewable Energy Certificate (REC) is a unique, trackable instrument representing the right to claim 1 MWh of renewable energy delivered to the grid. RECs exist through validation and tracking by a third-party Registrar (the utility, NAR, GATS, APX, etc.)

6 Discovery REC transactions have increased in the recent years and are projected to continue growing Processes are not controlled by a single organization or group At least eight separate marketplaces/registries for voluntary or state RPS compliance

7 Discovery Existing registries represent RECs with different data structures Utilities may act as their own registrar and may not use the existing markets to track the REC Taskforce focused on data sets outside of existing registries

8 Renewable Energy Certificates
Compliance State Renewable Portfolio Standards Federal Power Goals Voluntary Managed through compliance registry Managed by utility What we found: RECs can be categorized into two categories A compliance instrument for state RPS (renewable portfolio standard). State rules vary regarding generation type and timing Set by state jurisdictional preferences (not all RECs are equal) A voluntary instrument for use to verify corporate renewable claims. The voluntary nature results in the preferences being set based upon corporate preferences Based upon over eight hours of meetings, many hours of research internally and externally the group determined the pain identified was management of Voluntary RECs where the Utility acts as the registry.

9 Challenge Utilities can be their own registrar and greatly reduce transaction costs associated with RECs Without a standard there is no common contract, validation, attestation, and retirement processes Each contract may have a different method for tracking the REC Complicated and manual efforts to support each contract

10 Voluntary REC Contract Framework
Subcommittee draft Framework: Voluntary REC Contract Renewable Generation Identification (Source) Renewable Metering (Data Frequency, Measurement, etc.) Creation of REC in Registry or Non-Registry Bifurcated: External Registry of Internal Registry (External Registry Skips Steps 5&6) Utility-Provided Attestation (for Non-Registry RECs) Validation of Clear REC Needs Standardization of Data (Model After Attestation Registry Samples) Retirement Needs Standardization of Retirement (Model After Retirement Registry Samples) Each arrow in the diagram is an opportunity to create a data set.

11 Chairs’ Recommendations
The taskforce found there are standardization opportunities, particularly for Voluntary RECs Proceed with joint RMQ/WEQ effort to create a NAESB REC Contract, beginning with Voluntary RECs Develop common datasets and necessary for digitization of the contract using a common format to ensure support for future technologies

12 Proposed Motion Revise 2019 Annual Plan Items WEQ 7. b. ii. And RMQ 7. a Develop a Distributed Ledger Technology (DLT) Business Practice standards contract and/or protocols to improve and automate /replace the current Voluntary Renewable Energy Certificate (REC) creation, accounting, and retirement processes for financial and/or sustainability accounting/reporting, if needed based upon review Set status to Started Jointly assign to the WEQ and RMQ Business Practices Subcommittee


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