Originally published in the Argus Air Daily.
by William Fleeson
Washington, 19 March (Argus) — Jennifer Martin is executive director of the Center for Resource Solutions (CRS), a non-profit that administers the Green-e certification program for renewable electricity. In this interview, edited for length and clarity, Martin discusses how the interdependence of compliance and voluntary markets has factored into the Green-e program over two decades.
CRS has been active since 1997, when the renewable energy world was a much smaller place. What prompted the organization’s founding? What is driving your activities today?
The 1990s were a time when a lot of development was going on in renewables in terms of technological advances, cost reductions and policy changes in the electricity sector. Doors were suddenly opening for renewables. CRS was started at this point to try to accelerate this growth and to encourage a healthy development of markets and policies together.
We launched the Green-e certification right when CRS started. We did so because at the time, states like California and Massachusetts were restructuring their electricity sectors. Customers were being offered green power options for the first time. But no one was regulating what green power was. We saw this as a tremendous opportunity for the market to grow. We did not want there to be missteps, either. Green-e was launched as a quality and consumer protection program – so that customers could be sure they were getting what they paid for.
Today, I would say that a lot of the same factors are at play. Incredible technology advancements have taken place in the last few years, as well as substantial cost declines. Policy developments have evolved: New market structures have come into place, as well as new ways of selling energy. A lot of the opportunities and risks are similar today, but the size of the market, and the number of players, are different.
One of the big changes in today’s market is climate change. Back in the 90s, it was not something people were talking about all the time. Now climate policy is the number-one priority in a lot of places. That has a direct impact on renewables, how markets are structured and the regulatory environment in which new projects are built.
What is the size and scope of the Green-e energy market? How does the Green-e market interact with other markets?
Green-e is our certification program in the renewable space. We certify renewable energy options in the voluntary market – renewable energy not used in a mandate like a renewable portfolio standard (RPS). It is energy where buyers have chosen to buy renewable energy on their own. Green-e certifies all the different types of products that can be used for voluntary purchasing. That ranges from utility green pricing programs, new options like community choice aggregation programs, unbundled renewable energy certificates (RECs), renewable options sold by competitive energy suppliers in state with retail competition like Texas and the US northeast, among others.
We certify about 50mn MWh/yr. if you look at all the renewable energy sold in the US, we account for a significant share.
In terms of how Green-e interacts with other markets, there is very good coordination between voluntary and compliance markets. The success of voluntary markets in the US has been that we have one unit of currency by which all renewable energy is accounted for. Historically in the US, compliance and voluntary markets have been very complementary. There is a lot of overlap between states with RPS requirements and Green-e demand. That shows that where there is support for renewable energy, there is cross-over between voluntary and policy commitments.
What is CRS’ position on mandated versus market growth of clean energy, for example Texas versus New York state?
We think that renewable markets need both – strong policies like RPS (programs) as well as strong voluntary markets. These have been the key to growing renewables in the US, and we think that they will be in the future. One trend we are seeing now is increasing state activity on renewable energy policy, even as the voluntary market continues to grow at a quick pace. Each of these will be critical in reaching the goals we need to address climate change and for renewables to reach their potential.
Wind energy made up nearly 90% of Green-e’s renewable resource types in 2016. Why so much wind? And could other types like biomass and solar increase their shares in the future? Why or why not?
The Green-e standards allow for a wide variety of technologies – in fact, it is technology-agnostic. It is really up to the market to determine what renewables are sold in the program. Yet we have seen a trend in the last few years of an increasing amount of wind being purchased in the voluntary market. If you look at the make-up of renewables in the US, wind dominates. There is just more supply available than the other technologies. It also happens to be a fairly low-cost resource. If you are a purchaser and are cost-sensitive, wind is a really good option.
In contrast, for solar, a lot of states with RPS (programs) have carve-outs for that technology. Most of the solar RECs in states like New Jersey tend to be sold into the compliance market, because the value of the RECs is incredibly high, given the structure of the policy. Those values are much higher than in Green-e. But as solar grows, and starts to exceed RPS goals, you will see more solar coming into the voluntary market.
Green-e is just one area of CRS’ work. We have two other main areas: policy and education. On policy, we are active in the US and internationally. We do a lot of work at the intersection of renewable policy and carbon policy. Many carbon policies have direct impact on electricity markets. We are always watching those to make sure the policies are complementary and lead to faster renewables growth.
Our international work targets China and other Asian countries like Singapore, where a glut of corporate demand for renewables made it a good place to expand.