ERCOT Renewable Credit Program Most Active in US
The Electric Reliability Council of Texas (ERCOT), the grid operator for most of the state, issued 10 million Renewable Energy Credits (REC) in 2007, an increase of 43 percent from 2006, and retired approximately 5 million, according to the 2007 REC annual report released today.
Ninety-one competitive retail electricity providers retired 3.4 million RECs in order to satisfy the annual mandate within the state’s renewable portfolio standard. An additional 1.6 million RECs were retired in the voluntary market to substantiate “green energy” support of the clean-air initiative in Texas.
The REC trading program was established as part of the Legislature''s restructuring of the state’s electricity market in 1999 to increase incentives for renewable energy production through a renewable portfolio standard. Each REC represents one megawatt-hour of renewable energy produced. RECs are tradable instruments which can be sold separately from its associated energy. Retail electric providers must acquire and retire RECs based on its pro-rata share of the renewable portfolio standard annual mandate.
The original statutory goal of the program was to install 2,000 megawatts (MW) of additional, new renewable resource generation in Texas by the year 2009, adding to the 880 MW already existing. Texas has rapidly moved beyond the original goals. More than 4,000 MW of wind power has been added since 2001. The installed wind capacity in ERCOT is currently 5,311 MW, soon to surpass the 2005 renewable portfolio standard goal of 5,880 MW by 2015.
“The REC program in Texas is the longest running and the most active in the US,” said Roy McCoy, administrator of the program. “And it is accomplishing its goal of bringing clean, renewable resources into Texas at a record pace.”
Texas passed California in 2006 as the leading state in the US in installed wind generation.
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ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.