By - Jim Vess

Retail sales of renewable energy through green power markets up 20 percent in 2018

Energize Weekly, October 16, 2019

Retail electricity purchases of renewable energy through green power markets rose 20 percent in 2018 to 134 million megawatt-hours (MWh) of energy compared to 2017, according a federal National Renewable Energy Laboratory (NREL) market trends report.

The number of customers participating in these markets also grew 15 percent to 6.3 million. The purchases equaled just 3 percent of all retail electric sales, but 28 percent of all U.S. non-hydro renewable energy generation.

Purchases of renewable energy were made using seven different types of offerings.

The most customer participation – nearly 3.4 million buyers – was through community choice aggregation (CCA) where a local agency purchases market electricity for a participating group of customers. CCA was responsible for 95 million MWh of renewable energy.

California continued to be the largest CCA market with more than 2.2 million customers and 4.4 million in sales. The next two largest markets were Illinois, with 104,000 customers and 2.8 million MWh in sales, and Massachusetts with 997,000 customers and sales of 1.2 million MWh.

The next largest number of customers, 1.7 million, came in areas with restructured electricity markets that allow competitive suppliers to offer retail electricity. These sales accounted for 25 million MWh.

“Competitive supplier green power sales grew by about 38 percent from 2017 to 2018, largely due to increased green power sales by a single large supplier,” according to the NREL report.

Utilities offering green-pricing programs, enabling customers to pay extra for designated renewable resources, attracted 966,000 customers and accounted for 9.7 million MWh, a 9 percent increase over 2017. Utility renewable energy contracts added another 3.3 million MWh in sales.

Overall, the use of unbundled renewal energy credits (RECs) by 206 customers accounted for the largest amount of electricity procured – 63.2 million MWh, a 22 percent increase over 2017.

RECs, in denominations of 1 MWh, are attached to renewable energy projects and account for environmental or social benefits of the project. The sale of RECs separated from the project, or “unbundled,” helps finance or defray costs of a renewable energy project.

The next largest purchase of electricity came in the form of power purchase agreements (PPAs), long-term contracts for generation, totaling 23.5 million MWh. Most PPA capacity signed in 2018 and 2019 is still under construction and has yet to come online.

There were about 275 parties participating in these PPAs, led by corporate purchases. “PPA green power sales grew by about 19 percent from 2017 to 2018,” NREL said. “These figures include only PPA sales where we estimate that the purchaser has retained the RECs.”

Community solar gardens, with about 6,000 customers, accounted for 102,000 MWh. While that is small, it represents a growth from near zero in 2010. By the end of 2018, there were 1.5 gigawatts of solar garden capacity, and there are another 2.1 gigawatts of projects in state interconnection queues waiting to come online.

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