The importance of getting the REC markets right.
Daniel P. Krueger (email@example.com) is a senior executive in Accenture’s utilities industry group, and managing director for the generation and energy markets practice. Andre Begosso (firstname.lastname@example.org) is a senior manager in Accenture’s utilities industry group and lead strategist for the energy markets. The authors acknowledge the contributions of Curtis Bech, Accenture manager.
Renewable energy credits (REC) have been around for more than a decade. The development of state REC markets has been intrinsically linked to increasingly prevalent renewable portfolio standards (RPS) throughout the United States since the late 1990s. In combination with federal tax incentives, such as the production tax credit (PTC) or the investment tax credit (ITC), state RPS requirements have been the driving force behind renewable generation capacity additions (see Figure 1). To date, the RPS requirements and their associated REC markets have been instituted and operated at the state level. Now, the United States Congress has pending legislation—H.R. 2454 in the House of Representatives and S.1733 in the Senate—which creates, among other things, a federally mandated renewable energy standard (RES). However, since this new federal mandate hasn’t yet been approved and signed into law, RPS requirements and REC markets continue under state jurisdiction.