For years, solar and wind developers have benefited from markets that trade in renewable energy certificates: credits associated with each megawatt of power panels or turbines produced that a polluter could purchase to offset greenhouse gas emissions.
But nuclear plants have largely been excluded from those markets, an exclusion indicative of the broader challenges that the industry faces in tapping into the same incentives that helped renewables grow. However, this week Constellation, the nation’s largest nuclear plant operator, is taking steps to change that.
Tomorrow, the company will announce new emissions-free energy certificates, or EFECs, on the online trading platform Xpansiv, Latitude Media has learned.
Starting on December 2, Constellation will offer certificates based on power generated from its plants in the PJM Interconnection, the nation’s largest grid system, on Xpansiv’s CBL market, the largest carbon spot exchange in the world.
Xpansiv will also roll out hourly EFECs that provide full lifecycle traceability for issuance to retirement on its North American Renewables Registry, the largest exchange of its kind, encompassing nearly 90 gigawatts of projects. The individualized serial number provided to each megawatt’s certificate ensures the value of the credit and prevents the same megawatt from being sold more than once.
“As demand for a range of clean, reliable and affordable energy solutions grows, our continued focus is on providing a comprehensive suite of commercial products that help customers meet their environmental goals,” Jim McHugh, Constellation’s chief commercial officer, said in a statement. “We believe the most important energy commodity is a reliable and clean megawatt, and our clean energy resources offer more clean, emissions-free energy than any other energy provider in the U.S.”
If done right and transparently, RECs can help fund construction of new generating technologies — both utility-scale and distributed resources. But nuclear power has largely been excluded from much of the financing infrastructure that has developed in recent years. In certain cases, such as the World Bank’s ban on funding or even advising countries on atomic energy projects, that’s been the result of long-standing nuclear taboos. In others, such as RECs, it’s been the result of the nuclear industry’s stagnation making too few new projects available for funding.
In the past, nuclear power “wasn’t in a growth phase here in the U.S.,” said Xpansiv CEO John Melby.
“That’s really changed, and you see plants being uprated, staying online for longer, and new ones being proposed,” he told Latitude Media. “Our credits create a mechanism for those entities to be funded, get price certainty, and on the other side, for a buyer to be able to credibly show that it’s moving toward lower emissions energy supply.”
While power from Constellation’s mid-Atlantic fleet is the first source of nuclear-based credits on the platform, Melby said he expects other companies to join. “Any nuclear provider or zero-emissions energy provider can register their generation with us, then mint a certificate as they produce a megawatt of power,” he said, adding that nuclear’s “perception in the marketplace… is definitely changing.”
“All of that is really driven by the demand growth that’s happening,” he said, speaking during a week of a flurry of nuclear deals. These include Google’s agreement to back the restart of NextEra’s Duane Arnold nuclear plant in Iowa, and the U.S. government’s pledge to fund $80 billion of domestic Westinghouse reactors.
