June 7, 2017

IL Agency Launches Major Support for Solar and Wind Energy

Holland & Knight Energy and Natural Resources Blog
Stephen J. Humes

The Illinois Power Agency (IPA) launched a procurement process this month aimed at supporting development of new utility scale wind, solar PV and solar on brownfields.

In commencing a procurement process for renewable energy certificates (RECs) from new large scale wind and solar projects to be built in Illinois or neighboring states, the IPA indicated it is implementing a December 2016 law entitled the Future Energy Jobs Act (the Act), which became effective on June 1, 2017.

Under the Act, the IPA plans to procure 1 million RECs each from new utility-scale wind and new utility-scale solar and brownfield site solar photovoltaic (PV) projects. One REC is generated for each megawatt hour (MWH) of electric power output from renewable energy projects. Pursuant to the 15-year REC purchase agreements, the project developers will be selling their RECs to the Illinois electric utilities, but generators are free to sell separate generation products (such as capacity, energy and ancillary services) to buyers in the wholesale power markets. In this way, the IPA’s program provides revenue support for renewable attributes sold in Illinois beyond the market price of power.

IPA’s draft form of REC purchase agreement is available for public comment through 6 pm CDT on June 14, 2017. See details at www.ipa-energyrfp.com. The IPA expects to issue the final procurement documents, including the final REC purchase agreement, on or about June 27, 2017, and the first Bid Date event is scheduled for Aug. 10, 2017.

Qualifying projects selected will be required to commence REC deliveries between June 1, 2019 at the earliest and June 1, 2021 at the latest. The wind and solar projects are required to be sized greater than 2 MW but any size brownfield site solar PV project will be considered. The RECs will be registered and tracked through the generation attribute tracking systems run by either PJM Interconnect, LLC (PJM), known as PJM EIS GATS, or the Midwest Independent System Operator’s M-RETS system, which tracks renewable generation located within the state and provincial boundaries of Illinois, Iowa, Manitoba, Minnesota, Montana, North Dakota, Ohio, South Dakota, and Wisconsin. M-RETS also tracks Renewable Resource Credits (RRCs) for the State of Wisconsin. PJM coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

The selected projects will be required to deliver RECs that qualify the buyers, the electric distribution utilities, to qualify for compliance with the Illinois renewable portfolio standard.

IPA indicated in their invitation to comment last week that the procurement will seek the entire 1 million RECs from new utility scale wind projects and will seek a portion of the 1 million RECs from new utility-scale solar PV and brownfield solar PV projects.

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