NJ SREC Market Update
NJ SREC Market Update March 12, 2014
©2014 SRECTrade, Inc.
Speakers Steven Eisenberg CEO
Alex Sheets Director Environmental Markets
Sam Rust Director Business Development
Agenda • Company Overview Sam Rust
• Solar Capacity and SREC Supply Steven Eisenberg
• SREC Pricing Alex Sheets
• Q and A 3
Overview
Online SREC transaction & management platform • • • • •
Since 2008 9,000+ clients 135+ MW under management 100% SREC focused Brokerage model
4
Services Corporate Electricity suppliers and institutional clients with systems above 250 kW
Residential and Small Commercial Home owners and commercial systems smaller than 250 kW
Installers Turn-key SREC solutions for solar installers and developers
5
NJ Capacity Installed Estimated Installed Capacity as of 2/28/14 = 1,245.5 MW EY2014 2.05% Solar Req.
1,600.0
1,400.0 1,200.0
Estimated SRECs Req.= 1.6 mm SRECs
1,000.0
800.0 600.0 400.0 200.0 -
NJ OCE MW Installed NJ2013 Est. MW Required
NJ2012 Est. MW Required NJ2014 Est. MW Required
Source: NJ BPU / Office of Clean Energy and SRECTrade Estimates
Estimated Avg. Annual MW Balance Needed* = 1,361.2 MW (not including older vintage) 6
NJ Capacity Installed Feb-14: 44.1 MW installed; up 161% month over month from Jan-14; 32.6 MW from 3 large projects • Last 3 month avg. (Dec-Feb) = 25.8 MW / month 90.0 129.0% increase
80.0 70.0
60.0 50.0 40.0
77.4 5.4% increase
30.0 20.0
10.0
33.8 17.6
18.5
0.0 Last 12 Months Last 6 Months Avg. MW/Month Avg. MW/Month
3 Months Ending Nov 2013
3 Months Ending Feb 2014
Source: NJ BPU / Office of Clean Energy 7
NJ SREC Supply and Forecast EY2014 YTD: ~790k SRECs eligible Jan-2014 issuance • EY2014 total eligible supply = ~2.1 mm SRECs (includes old vintages) EY2014: 2,400,000 • With no new build, will NJ2014 2,000,000 exceed req. by ~495k SRECs 542,471 Req. • Higher with continued 1,600,000 build 1,200,000
790,035
800,000 400,000 -
809,492
2014 Issued EY2014 Existing EY2012 & EY2013 Retired SRECs
Source: PJM GATS and SRECTrade Estimates
EY2015: • Oversupplied if 6 mo. avg. build stays status quo (18.5 MW/month) • Slightly Oversupplied (i.e. ~6%), if build declines by 50% (9.3 MW/month) 8
NJ Supply / Demand Scenarios Varying degrees of oversupply, 8-17%, through 2015… 800,000
Oversupplied
600,000
400,000 200,000
Undersupplied
(200,000)
(400,000) (600,000)
2014
2015
Case 1 - 13.9 MW/month
2016
Case 2 - 18.5 MW/month
2017
2018
Case 3 - 27.8 MW/month
Source: SRECTrade Estimates 9
NJ2014 Spot Market Pricing Recent spot transactions have pulled back a bit • Current NJ14 Market: $160 @ $170
Bid
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
200 180 160 140 120 100 80 60 40 20 -
Offer
Source: SRECTrade 10
NJ 3 Year Forward Market Forward curve has flattened, inline with current vintage, given shift to balanced supply in future years • Current NJ15-17 Market: $160 @ $170
Bid
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
200 180 160 140 120 100 80 60 40 20 -
Offer
Source: SRECTrade 11
Questions? Mainline: (877) 466-4606 Brokerage Desk: Ext #4 [email protected] Steven Eisenberg [email protected] (415) 702-0863 Alex Sheets [email protected] (802) 989-2617 Sam Rust [email protected] (415) 729-3546
12
Exhibit 1 Detail behind NJ Supply / Demand Scenarios from Slide 9 SREC Forecast vs. Estimated SRECs Req.
2014
2015
2016
2017
2018
Case 1 - 75% of Last 6 Month Average MW Added Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 2 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
505,643
168,977
-
-
1,329,545
1,644,720
1,844,880
2,045,040
2,245,200
243,508
454,479
460,946
(505,643)
(168,977)
Case 2 - Last 6 Month Average MW Added Remains the Same Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 3 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
508,604
221,978
-
-
1,332,506
1,694,760
1,961,640
2,228,520
2,495,400
73,747
270,999
210,746
(508,604)
(221,978)
Case 3 - 1.5x of Last 6 Month Average MW is Added Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 4 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
514,526
327,980
265,775
361,736
1,338,428
1,794,840
2,195,160
2,595,480
2,995,800
(514,526)
(327,980)
(265,775)
(361,736)
(651,390)
Source: SRECTrade 13
©2014 SRECTrade, Inc.
Speakers Steven Eisenberg CEO
Alex Sheets Director Environmental Markets
Sam Rust Director Business Development
Agenda • Company Overview Sam Rust
• Solar Capacity and SREC Supply Steven Eisenberg
• SREC Pricing Alex Sheets
• Q and A 3
Overview
Online SREC transaction & management platform • • • • •
Since 2008 9,000+ clients 135+ MW under management 100% SREC focused Brokerage model
4
Services Corporate Electricity suppliers and institutional clients with systems above 250 kW
Residential and Small Commercial Home owners and commercial systems smaller than 250 kW
Installers Turn-key SREC solutions for solar installers and developers
5
NJ Capacity Installed Estimated Installed Capacity as of 2/28/14 = 1,245.5 MW EY2014 2.05% Solar Req.
1,600.0
1,400.0 1,200.0
Estimated SRECs Req.= 1.6 mm SRECs
1,000.0
800.0 600.0 400.0 200.0 -
NJ OCE MW Installed NJ2013 Est. MW Required
NJ2012 Est. MW Required NJ2014 Est. MW Required
Source: NJ BPU / Office of Clean Energy and SRECTrade Estimates
Estimated Avg. Annual MW Balance Needed* = 1,361.2 MW (not including older vintage) 6
NJ Capacity Installed Feb-14: 44.1 MW installed; up 161% month over month from Jan-14; 32.6 MW from 3 large projects • Last 3 month avg. (Dec-Feb) = 25.8 MW / month 90.0 129.0% increase
80.0 70.0
60.0 50.0 40.0
77.4 5.4% increase
30.0 20.0
10.0
33.8 17.6
18.5
0.0 Last 12 Months Last 6 Months Avg. MW/Month Avg. MW/Month
3 Months Ending Nov 2013
3 Months Ending Feb 2014
Source: NJ BPU / Office of Clean Energy 7
NJ SREC Supply and Forecast EY2014 YTD: ~790k SRECs eligible Jan-2014 issuance • EY2014 total eligible supply = ~2.1 mm SRECs (includes old vintages) EY2014: 2,400,000 • With no new build, will NJ2014 2,000,000 exceed req. by ~495k SRECs 542,471 Req. • Higher with continued 1,600,000 build 1,200,000
790,035
800,000 400,000 -
809,492
2014 Issued EY2014 Existing EY2012 & EY2013 Retired SRECs
Source: PJM GATS and SRECTrade Estimates
EY2015: • Oversupplied if 6 mo. avg. build stays status quo (18.5 MW/month) • Slightly Oversupplied (i.e. ~6%), if build declines by 50% (9.3 MW/month) 8
NJ Supply / Demand Scenarios Varying degrees of oversupply, 8-17%, through 2015… 800,000
Oversupplied
600,000
400,000 200,000
Undersupplied
(200,000)
(400,000) (600,000)
2014
2015
Case 1 - 13.9 MW/month
2016
Case 2 - 18.5 MW/month
2017
2018
Case 3 - 27.8 MW/month
Source: SRECTrade Estimates 9
NJ2014 Spot Market Pricing Recent spot transactions have pulled back a bit • Current NJ14 Market: $160 @ $170
Bid
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
200 180 160 140 120 100 80 60 40 20 -
Offer
Source: SRECTrade 10
NJ 3 Year Forward Market Forward curve has flattened, inline with current vintage, given shift to balanced supply in future years • Current NJ15-17 Market: $160 @ $170
Bid
Mar-14
Feb-14
Jan-14
Dec-13
Nov-13
Oct-13
200 180 160 140 120 100 80 60 40 20 -
Offer
Source: SRECTrade 11
Questions? Mainline: (877) 466-4606 Brokerage Desk: Ext #4 [email protected] Steven Eisenberg [email protected] (415) 702-0863 Alex Sheets [email protected] (802) 989-2617 Sam Rust [email protected] (415) 729-3546
12
Exhibit 1 Detail behind NJ Supply / Demand Scenarios from Slide 9 SREC Forecast vs. Estimated SRECs Req.
2014
2015
2016
2017
2018
Case 1 - 75% of Last 6 Month Average MW Added Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 2 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
505,643
168,977
-
-
1,329,545
1,644,720
1,844,880
2,045,040
2,245,200
243,508
454,479
460,946
(505,643)
(168,977)
Case 2 - Last 6 Month Average MW Added Remains the Same Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 3 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
508,604
221,978
-
-
1,332,506
1,694,760
1,961,640
2,228,520
2,495,400
73,747
270,999
210,746
(508,604)
(221,978)
Case 3 - 1.5x of Last 6 Month Average MW is Added Per Month Throughout the Forecast Estimated NJ SREC Requirements Less: Excess SRECs From Prior Period Less: Case 4 Estimated SRECs Produced # of SRECs Under / (Over) Supplied
1,633,394
1,981,386
2,257,365
2,499,519
2,706,146
809,492
514,526
327,980
265,775
361,736
1,338,428
1,794,840
2,195,160
2,595,480
2,995,800
(514,526)
(327,980)
(265,775)
(361,736)
(651,390)
Source: SRECTrade 13
