Massachusetts Launches $30 M Push for Clean Energy

Massachusetts Technology Collaborative (MTC) Executive Director Mitchell Adams unveiled the most comprehensive proposal in Massachusetts history to increase the supply of electricity from clean, renewable sources such as wind power and solar energy. The new $30 million Massachusetts Green Power Partnership (MGPP) will enable green power buyers and sellers to establish long-term contracts to support the development of new clean energy projects.

Westborough, Massachusetts – June 6, 2003 [] “This new Partnership signifies a bold new step toward an energy future that benefits all citizens of the Commonwealth and the northeast,” said Adams. “Our goal is to support the construction of 200 megawatts of electricity from renewable sources through this effort, which would be enough power to meet the needs of approximately 150,000 homes throughout Massachusetts.” MTC is a quasi-public economic development agency, which administers the state’s Renewable Energy Trust. The agency is working to maximize the benefits of clean energy resources and create jobs for citizens of the Commonwealth by stimulating new supply and demand for green power. “The first step in this new Partnership is a $20 million competitive funding round which will generate new green power development proposals and help move them into construction,” said Trust Director Rob Pratt. “Dramatically increasing the supply of renewable energy will lead directly to a cleaner environment, expanded consumer choices and greater energy independence for Massachusetts.” MTC is offering to purchase renewable energy certificates (RECs) under long-term contracts and to provide other REC price supports for developers of renewable energy generating facilities, and for companies that purchase energy from such facilities. The purpose of these offerings is to facilitate the financing of new renewable energy facilities such as wind, solar, biomass and hydro power, and to benefit Massachusetts customers who are interested in buying this green power. Proposals are due in September 2003. In this early stage of the competitive market, developers of clean generating facilities face considerable risks. The MGPP reduces certain of these risks by jump-starting participation in the REC trading market. This creates a climate where all parties become more comfortable with the purchase and sale of RECs, which are created and accounted for by the NEPOOL Generation Information System. A more active REC market will facilitate long term contracts and enable long term financing. Without long-term contracts, most renewable project developers have found it difficult to obtain debt financing, in spite of consumer demand and the Massachusetts RPS. Through the MGPP, MTC helps to spur the REC market and overcome this barrier to project financing, in order to make more green power available to Massachusetts customers. Under this solicitation, MTC contract commitments can extend for a period up to 10 years. However, this 10 year commitment does not have to begin with the first year of operation of a renewable generator. A bidder may plan to sell RECs for additional years under separate contracts with green power buyers, which could have the effect of increasing to approximately 15 years the term of contracts that support project financing. Opportunities through this funding round include: • agreements to purchase RECs; • “put options” on RECs, which serve to provide a price floor; and • “price collars” (put and call options) on RECs. The Trust was created in 1998 through the electric restructuring law and is funded through a monthly surcharge on electric utility bills. To obtain a copy of the Massachusetts Green Power Partnership solicitation, please visit the agency’s website at the link below. A bidders conference will be held on June 18.
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