Connecticut Offers Latest Funds from the $1.02B LREC & ZREC Program; Potential Microgrid Revenue

May 2, 2016
Connecticut’s investor-owned utilities have issued a request for proposals seeking low and zero emissions renewable credits (LREC/ZREC), which offer potential revenue for microgrids and other clean energy projects.

Credit: FuelCell Energy

Connecticut’s investor-owned utilities have issued a request for proposals seeking low and zero emissions renewable credits (LREC/ZREC), which offer potential revenue for microgrids and other clean energy projects.

State law requires that Eversource and United Illuminating make $1.02 billion in LREC and ZREC purchases from clean energy projects over six years. The program is now in its fifth year. The utilities will spend $300 million on LRECs, and $720 million on ZRECs.

Connecticut’s LREC and ZRECs differ from the conventional renewable energy credits offered in many states in that they are based on emissions levels, rather than purely on generation type. This opens the door for a broader array of clean energy technologies.

As the name implies, a ZREC comes from a facility that produces no emissions, such as solar and wind power. An LREC must have emissions of no more than 0.07 pounds per MWh of nitrogen oxides, 0.10 pounds per MWh of carbon monoxide, 0.02 pounds per MWh of volatile organic compounds, and one grain per 100 standard cubic feet.

A fuel cell microgrid in Hartford recently reported that it is receiving LREC revenue. The project is being developed by Exelon’s competitive subsidiary Constellation in partnership with fuel cell manufacturer Bloom Energy and the city of Hartford. The project also is receiving grant money under Connecticut’s microgrid incentive program (which is now offering $30 million for microgrid projects).

Under the LREC/ZREC program, utilities enter into 15-year contracts to buy the credits from behnd-the-meter projects. The utilities will pay a maximum of $261.81/credit for ZRECs and a maxmum of $200/credit for LRECs. Winners are selected based on bid price.

The RFP seeks LREC projects that are up to 2,000 kW and ZREC projects between 100 kW and 1,000 kW. Smaller projects, of 100 kW or less, also are eligible for ZRECs, but not through the RFP. The utilities instead manage the program under a separate tariff.

Issued April 28, the RFP seeks bids by June 16. A bidders conference is scheduled for May 13. The utilities expect to select winners around July 16.

To be eligible to participate in the RFP, the project must have gone into service by July 1, 2011.

The full RFP is available here.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is the editor and founder of EnergyChangemakers.com. She is co-founder and former editor of Microgrid Knowledge.

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