In the US, the north-eastern markets remain strong. Renewable energy certificates (RECs) eligible for meeting the Massachusetts renewables portfolio standard remain in particularly short supply. With the transfer period for 2004 RECs closed as of June 15, it is now clear the Massachusetts market has been incredibly short -- significant numbers of load servers have been forced to pay the state's Alternative Compliance Payment of $51.41/MWh. The period for 2005 is also shaping up to be short: market bid price is $48, but offers are already coming in at $52.
As with the last quarter, Connecticut Class 1 RECs have seen more balance, with trades generally clearing in the mid $30s. While REC imports from outside of Nepool continue, those in favour of local sourcing only are starting to be heard in both the legislature and the implementing agencies. If their arguments win, a reduction in supply and higher prices could result. Texas REC prices have been softening after legislation to increase target levels failed to pass into law. New Jersey has seen a spurt of activity, largely in retail scale demand for solar RECs.
In markets without minimum standards for the content of renewables in supply portfolios, REC prices have been falling. This is due to an increase in installations and awareness of REC value among existing generators. While growing at a rapid rate, voluntary buyers, who are the usual off-takers for these RECs, have not kept pace with supply.