Indexed REC RFP – ANNOUNCEMENT: Quantities to be Procured

Section 1-75(c)(1)(G)(iii) of the IPA Act requires that the Illinois Power Agency (“IPA” or “Agency”) “conduct at least one subsequent forward procurement for renewable energy credits from new utility-scale wind projects, new utility-scale solar projects, and new brownfield site photovoltaic projects . . . in quantities necessary to meet the requirements of subparagraph (C) of this paragraph (1) through the delivery year beginning June 1, 2021.”  Under this language, the subsequent forward procurement quantity must be sized to ensure that Section 1-75(c)(1)(C)(i)’s “at least . . . 10 million renewable energy credits delivered annually by the end of the 2021 delivery year” is met, while next looking to the statutory proportion of RECs under contract as between project types outlined in subparagraph (C).

Of the 10,000,000 REC target, 45% is to be sourced from new wind projects (creating a target of 4.5 million); presently, just over 2,000,000 RECs are contracted to be delivered annually from new wind projects.  A utility-scale wind procurement quantity of 2.5 million RECs delivered annually thus targets an amount sufficient to meet this requirement.  Section 1-75(c)(1)(C) also seeks a 55%-45% split between new solar projects and new wind projects, with projects already under contract not included when determining whether that ratio is achieved.

With these requirements in mind, the Agency’s proposed quantities for this subsequent forward procurement are as follows:

Utility-scale Wind  2,500,000 RECs
Utility-scale Solar  2,000,000 RECs
Brownfield Site Photovoltaic  125,000 RECs

Under the block sizes published upon the program’s December 14, 2021 reopening, the Adjustable Block Program reopening required pursuant to Section 1-75(c)(1)(G)(iv) of the Act has been sized to bring approximately 970,000 RECs delivered annually under contract from participating projects.  When combined with those 970,000 RECs, the target quantities above result in a ratio between new photovoltaic REC procurement (3.095 million) versus new wind REC procurement (2.5 million) of 1.238:1.  The IPA believes this ratio is acceptably close to the 55% to 45% proportion between new photovoltaic project REC procurement and new wind project REC procurement found in Section 1-75(c)(1)(C) (1.222:1), and thus consistent with Section 1-75(c)(1)(C)’s proportionate requirements.

These procurement quantities, if achieved and when combined with existing REC delivery contracts, would result in over 12 million RECs delivered annually under contract from new wind and new solar projects.  While this amount is well above the 10 million RECs outlined in Section 1-75(c)(1)(C)(i), that 10 million REC quantity is a minimum target which must be exceeded year over year until 45 million RECs delivered annually are under contract by 2030.  As a consequence, the Agency believes utilizing an overall procurement quantity which may result in that minimum target being exceeded is consistent with governing law.