Last week Evolution Markets and the Massachusetts Technology Collaborative (MTC) announced plans to host its latest Renewable Energy Credit (REC) Auction on behalf of the Massachusets Renewable Energy Trust on April 22nd. In addition to selling nearly 18,000 RECs to satisfy the Massachusetts, Rhode Island, and Connecticut renewable portfolio standards, the auction provides some of the only publicly available sources of price information on the New England REC market.
RECs and renewable portfolio standards remain the primary method by which New England states encourage renewable energy development, so the results of these auctions offer a snapshot of how well they’re doing. Last October’s auction, for example, was the first in which Massachusetts “new” RECs dropped significantly below the compliance price (the price retail suppliers can pay in lieu of purchasing RECs). In that auction, 2008 Mass RECs sold at prices between $30 and $32. At the MTC/Evolution auction a year earlier (pdf), new 2008 Mass RECs sold at an average price of $52.
The drop in prices is not unexpected: last fall the Mass DOER reported that in 2007 the supply of available RECs was greater than retail suppliers’ demand (another pdf) for the first time. That, along with the steady increase in the number of bidders suggests that the market for Massachusetts RECs has begun to mature. With Congress set to begin debating an energy bill that includes a national RPS next week, many will be watching these auctions to see what the future may hold.
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