Energy Transfer buys Texas solar, RECs

Market: Electricity, Emissions
07/09/21

Pipeline owner and operator Energy Transfer is buying electricity and the associated renewable energy certificates (RECs) from a solar farm in Texas.

Energy Transfer has signed a 15-year power purchase agreement for a 120MW share of developer SB Energy's 200MW Eiffel Solar project in Lamar County, northeast of Dallas.

San Francisco-based SB Energy will begin construction on the project during the first half of 2022, and it will begin delivering power and RECs to Energy Transfer in January 2024.

The Eiffel purchase is the second "significant agreement to purchase low-cost solar power" for the Energy Transfer operations in Texas, said Tom Mason, head of the company's alternative energy group. The first was a 15-year contract with the 28MW Maplewood 2 project, which began operating in the Permian Basin earlier this year.

The company did not respond to a request for comment on how it will handle the RECs. If the company wants to claim the use of carbon-free power, it would have to retire the credits, taking them out of circulation, as RECs are the only way to distinguish between power from a coal plant and solar farm once it hits the grid.

Growing demand in voluntary REC markets has driven prices for Texas RECs much higher in the past six months. Although the market has waned a bit in recent weeks, Argus assessments for vintage 2021 and 2022 vintage Texas wind RECs eligible for the Green-e program recently set record highs above $7/MWh. Texas solar RECs qualifying for Green-e traded in multi-year strips as high as $9.50/MWh in late August.

The higher voluntary prices, in turn, have lifted prices in the Texas compliance REC market, as many projects in the state qualify in both.

The decreasing spread between Texas wind and solar RECs makes the latter more economical for compliance buyers due to a quirk in the regulations known as the "compliance premium." RECs generated by non-wind resources receive the premium, which functionally serves as additional credit toward yearly compliance obligations.

Once Eiffel Solar is fully operational, the project is expected to feed more than 450,000MWh/yr into the Electric Reliability Council of Texas (ERCOT) grid, SB Energy said.

The developer says it is in "advanced negotiations" for Eiffel's remaining capacity with a number of parties, including corporate buyers with "aggressive sustainability goals that want to lock-in the renewable attributes given the recent increases in Texas solar REC values."

By Patrick Zemanek

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White House ends use of carbon cost

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Carbon credit method may limit Australia's ACCU supply

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09/05/25

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09/05/25

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09/05/25

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08/05/25

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08/05/25

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