Canada sees potential in green tag exports -- Maturing US market for tradable certificates looking attractive

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A Canadian wind power developer has taken its first step into the fledgling international market for tradable renewable certificates (TRCs), hoping to tap into the much bigger market south of the border. Calgary's Vision Quest Windelectric recently became the first Canadian company to certify its wind generated TRCs under the United States Green-e program.

Vision Quest's Jason Edworthy says the company is looking south not only because of the size of the market, but because it is much more liquid than the market in Canada. "They are much more mature in terms of trading certificates there than we are here. So that just means there is opportunity," he says.

Vision Quest hopes to announce its first US sale in the spring, says Edworthy, who expects Canadian green tags to be competitive with US products, particularly considering the exchange rate advantage. "In theory our dollar should help us." He does not expect the generation of TRCs in a foreign country to be a barrier to selling them in the US.

The province of Alberta, where Vision Quest owns more than 83 MW of wind capacity, is part of the Western Electricity Coordinating Council (WECC), which oversees the interconnected system that includes British Columbia, northern Mexico and all or portions of the 14 western US states in between. "Since trading typically follows the same market as those electrons, it stands to reason that the opportunity exists throughout that whole region," says Edworthy. "I think it is a matter of educating customers down there that we are part of the WECC, and that with the certification, technically there is no particular difference between our tags and those from American facilities."

In fact, cross-border sales of TRCs are not unprecedented. In 2002, BC Hydro's trading subsidiary, Powerex, sold green certificates to the Los Angeles Department of Water and Power, but revealed neither the price nor the quantity sold. A number of Canadian companies also buy certificates from the US market, says Edworthy.

Although several US jurisdictions with rules requiring a minimum standard for the renewables energy content of power supply portfolios require TRCs to come from facilities installed in the state, says Edworthy, there are voluntary markets to tap into. Vision Quest is also keeping an eye on California, which is writing the rules for its aggressive 20% Renewables Portfolio Standard by 2017.

"There seems to be an impression that if California keeps the border closed to Wyoming, Oregon or Washington it won't be able to meet its objectives. And if they open it up, they'll have to open it up the entire WECC. So I think there is an opportunity there."

New England too

Vision Quest is not confining itself to western markets. With the Ontario wind market beginning to take off, the company, which has two projects under development in that province, hopes to follow historic electricity trading patterns into the New England Power Pool. "Having the ability to have a product that resellers or ourselves can move into the US market would make a lot of sense," says Edworthy.

Edworthy believes that the development a North American market for TRCs makes sense. "Because of the transmission constraints we live with and the charges that are associated with transmission, this is the most efficient way for the market to operate."

The California-based Center for Resource Solutions, which operates the Green-e program, has begun to lay the foundation for that market with a proposal to set up a co-ordinated North American system for tracking and verifying TRCs, saying such a network will "build consumer confidence, eliminate the potential for double counting of TRCs, and accelerate the market for renewable energy."

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