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www.thegreenpowergroup.org

DECEMBER 2004

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DEVELOPING “NEXT GENERATION” GREEN POWER PRODUCTSFOR CORPORATE MARKETS IN NORTH AMERICA

BY ANDREW AULISI AND CRAIG HANSON

U.S. firms are increasingly interestedin switching to green power, electricityfrom renewable resources such as solar,wind, and biomass. For many largecorporate energy buyers, however,“current generation” green powerproducts are not sufficiently attractive.Most products are too expensive anddo not provide enough value to justifytheir premiums.

Retail electricity providers can addressthis market shortcoming by introduc-ing a suite of “next generation” greenpower products specifically tailored tothe needs of corporate customers involuntary markets. Examples of suchproducts include:

• Green power using nationallysourced RECs: Local retail electric-ity providers can bundle convention-ally generated electricity withrenewable energy certificates(RECs) from renewable powerfacilities located elsewhere in thecountry instead of only using locallygenerated renewable power. Byaccessing RECs from the most cost-competitive facilities in the nation,electricity providers can lower thecost of green power as well asincrease renewable resource optionsfor customers.

• Long-term fixed-price green power:Capitalizing on the predictable, low-to-zero fuel costs of electricity fromrenewable resources, retail electricityproviders can offer green power at afixed, long-term (5–10 year) price. Thisprovides customers with environmen-tally friendly power that also stabilizescorporate energy costs or serves as ahedge against volatile electricity rates.

• Green contract for differences (CFD):A green CFD is a financial contractthat allows a customer to supportrenewable energy development,acquire RECs, and hedge againstfluctuating electricity rates—but doesnot involve the customer receivingphysical power. Rather, the contract setsup an exchange of payments between apower consumer and a renewablegenerator that hinges upon an agreedprice for power. In a green CFD, eachparty is obligated to pay or receive fromthe other the difference between theagreed price and the actual marketprice for electricity. As the paymentsare settled, RECs are transferred fromthe generator to the customer.

This installment of WRI’s CorporateGuide to Green Power Markets intro-duces these three next generationproducts. The report describes eachproduct, discusses benefits to both retailelectricity providers and corporatecustomers, and includes case examples.

Summary

The Corporate Guide analyzes thesethree products first in the U.S. context(sections II, III, and IV), includingboth regulated and deregulated states.

Next generation green power may alsobe attractive in other national markets.To explore this potential, the reportreviews the applicability of theseproducts in Canada (section V) andMexico (section VI). Given that bothcountries are geographically contiguousto the U.S. and are partners in theNorth American Free Trade Agree-ment, significant cross-border tradeexists in both primary energy andelectricity. In addition, many U.S.companies interested in buying greenpower have operations in Canada andMexico. Such factors increase thepotential for replicating these nextgeneration green power products.

This Corporate Guide considers issuesof concern for all those involved inrenewable energy markets, includingboth suppliers and consumers of greenpower. The discussions of green powerusing nationally sourced RECs andlong-term fixed-price green power areparticularly relevant to retail electricityproviders. The discussion of greenCFDs is especially applicable torenewable generators and largecorporate or institutional energybuyers.

2 C O R P O R AT E G U I D E T O G R E E N P O W E R M A R K E T S W O R L D R E S O U R C E S I N S T I T U T E

I. THE NEED FOR A“NEXT GENERATION”OF GREEN POWERPRODUCTSWorking with a number of leadingcompanies on sustainable energyissues, WRI has observed that manyU.S. firms are interested in reducingtheir consumption of fossil fuel-generated electricity by switching togreen power. Green power1 iselectricity produced from renewableresources such as solar, wind,geothermal, low-impact hydro,biomass, and landfill gas.2 Corporateenergy users aspire to make thisswitch to capture business benefits,such as strengthening customerrelationships, building a “green”image, meeting environmentaltargets, or reducing their depen-dence on power from resourcessusceptible to volatile price fluctua-tions.

Companies can obtain green powerin multiple ways. The most directapproach is to install a renewablepower generation system—such as asolar photovoltaic array—at acorporate facility. With an on-sitesystem, the generated electricity isdelivered directly to and consumedby the facility.

Companies also can purchase greenpower through a retail electricityprovider.3 In states with regulatedelectricity markets, many utilitiesoffer their customers the option ofbuying electricity from renewableresources through “green pricing”programs. In states with deregulatedelectricity markets, many competi-tive electricity suppliers or power

marketers offer customers theoption to purchase green power.

What buying green powerentailsWhen a company signs up to buygreen power from its retail electric-ity provider, it supports renewablepower generation and meets itselectricity needs. The physicalpower the company receives,however, does not necessarily comedirectly from a particular renewablepower facility. This is becauseelectricity from renewable andconventional power facilitiestypically blends together on the grid(Figure 1, A). All customers drawingpower in a particular market receivethe same mix of physical electricityregardless of whether they havecontracts for green or conventionalpower.

What buying green power doesentail is that the retail electricityprovider guarantees that power froma renewable generator in the amountof the customer’s demand is deliv-ered to the wholesale power marketor grid. Any premium paid by thegreen power customer helps coverthe incremental cost (if any) ofrenewable electricity generationover conventional power generation.In return, the customer can claim tohave “greened up” its electricitysupply in proportion to the amountpurchased.

When buying green power, a cus-tomer essentially is purchasing twoproducts bundled together:(1) electricity; and (2) a set ofenvironmental and other benefits.

These benefits are largely due to thefact that for every megawatt-hour(MWh) of power generated fromrenewable resources, there is oneless MWh of power from conven-tional sources. As a result,renewables increase energy diver-sity and avoid numerous air emis-sions (such as carbon dioxide andparticulate matter) that conventionalfossil-fired plants would haveemitted. Renewable energy marketscan now package these benefits intoa distinct product called a “renew-able energy certificate,” or REC.4

Each REC reflects the benefitsassociated with one MWh of elec-tricity from renewable resources;this is what makes green power“green.”

“Current generation” greenpower productsGiven the emergence of RECs,retail electricity providers haveseveral options for how they createtheir green power products. Forinstance, some providers (especiallyin regulated states) own renewablepower facilities from which theysource power. Others have contractsfor the output of electricity (and forthe RECs) from a local renewablegenerator (Figure 1, B).

Alternatively, RECs can be contrac-tually separated from their originalMWh of electricity. The “un-bundled” REC can be sold on themarketplace, leaving the underlyingelectricity as “commodity” or“generic” power. This feature allowsa retail electricity provider to sourceunbundled RECs from renewablepower facilities (Figure 1, C) or


from REC marketers/brokers(Figure 1, D), “rebundle” them withgeneric power purchased on thewholesale market (Figure 1, E), andsell the resulting green power to itsretail customers (Figure 1, F).

The vast majority of current genera-tion green power products rely onlocal renewable resources. Forinstance, for approximately two-thirds of green power sales inregulated U.S. markets, the retailelectricity provider sources electric-ity and RECs directly from a local orregional renewable generator.5 Fornearly all of the remaining greenpower sales, the retail electricityprovider sources locally or region-ally generated RECs from a whole-sale REC marketer or broker andrebundles them with local electricityto create green power.6 Only a smallshare of green power is created withRECs from renewable facilitiesoutside the region. The dominance

of locally generated green powerappears to be similar in deregulatedmarkets,7 and reflects the fact thatelectricity suppliers have a longtradition of sourcing even conven-tional power from nearby facilities.

Market shortcomingsExperience with WRI’s Green PowerMarket Development Group (Box 1)suggests that a significant share ofcurrent generation green powerproducts offered by retail electricityproviders are not sufficiently attrac-tive to many large corporate custom-ers. In particular, the price premiumof green power relative to conven-tionally generated electricity is oftenprohibitively high. For example, theaverage premium for green power inregulated electricity markets in theU.S. is 2.5 cents per kilowatt-hour(kWh) or $25 per MWh. In deregu-lated markets, the premium is 2.1cents per kWh ($21 per MWh).8 Thiswould entail a 30 to 35 percent price

increase for a company that typicallypays 7.0 cents/kWh for conventionalpower.

Furthermore, while the currentgeneration of green power productsmay help companies improve theirpublic image or meet voluntaryenvironmental goals, few offeringsprovide any additional quantifiablebusiness benefits. Many green powerproducts thus do not provide custom-ers with enough value to justify thepremiums. Many large firms per-ceive a 30 to 35 percent premium astoo much to pay for just “green PR.”Besides, there are other, lessexpensive strategies a company canpursue to demonstrate environmen-tal stewardship and build a “green”brand, such as energy efficiency orrecycling initiatives.

As a result, the vast majority ofcompanies have not switched togreen power despite surveys indicat-ing strong corporate interest.9 Theaverage penetration rate of greenpower products among corporatecustomers in the U.S. continues tohover at just 1 percent, even thoughmany products have been availablefor five or more years.10

The Green Power Market Develop-ment Group’s experience in themarketplace suggests that there areseveral next generation greenpower product designs that elec-tricity suppliers could introduce toaddress these shortcomings. Greenpower using nationally sourcedRECs can reduce price premiumsand thereby attract price-sensitivecorporate and other large electricity

Simplified Mechanics of How Green Power CanBe Designed

Figure 1


lower cost RECs wholesale fromwind facilities in the Great Plains.12

The lower cost nature of greenpower comprised of nationallysourced RECs can be attractive tocorporate energy users interested in“greening up” their electricitysupply in an economic fashion. Thistype of green power also can beattractive to corporate buyersbecause it increases the breadth ofrenewable resources available tocustomers. Firms are no longerlimited to buying green power fromjust resources that are locallypresent. For instance, with this typeof product a company that wants tosupport wind power but is located ina region where the only renewableresource available to its utility isbiomass can still achieve its goals.

Green power using nationallysourced RECs may not be attractiveto all corporate energy buyers.Some firms, particularly small orlocal ones, may prefer green powerfrom nearby generators. This isbecause they may want to supportlocal renewable resources and jobsor improve regional air quality. Theyalso may want to be able to “pointto” a nearby source of their greenpower, one that is visible to bothcustomers and employees.

Other companies, particularly largenational ones, may be more comfort-able with buying green power usingnationally sourced RECs. Forexample, firms with national brandname recognition or facilities inoperation across the country oftenare less tied to one particular locale.

The Green PowerMarket DevelopmentGroup

Convened in 2000 by the WorldResources Institute, the GreenPower Market Development Groupis a unique commercial and industrialpartnership dedicated to buildingcorporate markets for green power.The Group is transforming energymarkets to enable corporate buyersto diversify their energy portfoliosand reduce their impact on climatechange. The Group seeks to develop1,000 MW of new, cost-competitivegreen power by 2010—enoughenergy to power 750,000 homes.Group partners are Alcoa Inc.,Cargill Dow LLC, Delphi Corpora-tion, The Dow Chemical Company,DuPont, FedEx Kinko’s, GeneralMotors, IBM, Interface, Johnson &Johnson, Pitney Bowes, and Staples.

More information about the Groupand its activities can be found atwww.thegreenpowergroup.org. Thiswebsite includes publications,background information on variousgreen power technologies, and an on-line green power marketplace. Thewebsite also contains the GreenPower Analysis Tool, a MicrosoftExcel-based tool designed to helpmanagers evaluate green powerprojects from an integrated financialand environmental perspective.

Box 1

customers. Long-term fixed-pricegreen power provides corporatecustomers with the additionalbusiness benefit of a hedge againstvolatile electricity prices. Likewise,green contracts for differences allowboth renewable power generatorsand corporate energy users to hedgeagainst fluctuating electricity rates.Sections II, III, and IV describethese three product designs in moredetail.

II. GREEN POWERUSING NATIONALLYSOURCED RECSTo reduce the price premium ofgreen power, a retail electricityprovider can introduce a productusing RECs that are sourced nation-ally instead of locally. To create sucha product, the provider wouldpurchase on the wholesale marketlow-cost RECs that come from arenewable power facility located insome other region of the countryand that have been “unbundled”(that is, made available for saleseparately) from their originallyassociated electricity. The electricitysupplier then would “rebundle”these certificates with local, conven-tionally generated electricity andsell the packaged product as greenpower to its retail customers.

Benefits to corporate energybuyersGreen power using nationallysourced RECs often can have a lowerprice premium than green powerusing locally sourced RECs becausethe former allows a retail electricityprovider to access RECs fromregions of the country whererenewable power generation is morecost-competitive. For example, windpower generators in the Great Plainstypically will have lower productioncosts (and thus REC prices) thanthose in the Southeast. Theseregional pricing disparities are duein part to differences in the abun-dance of renewable resources; thewind blows with more force andconsistency in Iowa than in Georgia.11

Sourcing nationally thus allows autility in the Southeast to purchase


Moreover, firms are likely to have apresence wherever the renewablefacility generating the RECs islocated. In addition, for manynational or global companies, a keyenvironmental issue they areseeking to address through a greenpower purchase is greenhouse gas(GHG) emissions, especially carbondioxide (CO2). Since regional fuelmixes vary, the amount of CO2

emissions per MWh that a renew-able facility avoids varies betweenregional power pools. Local renew-able power facilities may not reducethe most CO2 emissions; there areregions of the country whereavoided CO2 emissions are higherand thus where supporting renew-able generation provides greaterclimate benefits.

Benefits to retail electricityprovidersThis next generation product alsocan provide benefits to retailelectricity providers. First, it giveselectricity providers the ability todiversify their product portfolio andoffer both “national” and “local”green power products instead ofrelying on a “one size fits all”program. This allows providers tomeet a variety of customer needs inthe voluntary market.13

Second, green power using nation-ally sourced RECs enables retailelectricity providers to bettercompete against REC marketers andbrokers to win the business of largecorporate customers. This is animportant benefit in light of recenttrends. Purchasing unbundled RECs,as opposed to green power, is

becoming increasingly popularamong major corporate energybuyers. Green-e® certified14 retailREC sales to corporate and othernon-residential customers in theU.S. voluntary market grew to332,000 MWh in 2003, a fivefoldincrease over the previous year.15

This burgeoning growth in certifi-cate sales is at least partly due to thelower cost that unbundled RECsoften have relative to currentgeneration (local) green power.16 Incontrast, sales of Green-e® certifiedgreen power to non-residentialcustomers recently have stagnated;2003 sales of 212,000 MWh wereapproximately the same as 2001sales.17

Nationally sourced RECs could helpinvigorate green power sales byenabling retail electricity providersto supply green power at a premiumthat is less than the price corporatecustomers would pay if they were tobuy unbundled RECs on their own.This is possible because electricitysuppliers are likely to purchase alarger volume of RECs (and perhapsfor a longer term) than most corpo-rate customers typically would, andtherefore suppliers can receivebetter volume discounts. To illus-trate, suppose a company interestedin “greening” its electricity supply isable to purchase 10,000 RECs on theretail market for $7/MWh. Supposethat the company’s utility, however,is able to purchase 500,000 of thesame RECs on the wholesale marketfor $3/MWh. The utility then coulduse these RECs to create arebundled green power product at apremium of $5/MWh for its custom-

ers. Both the utility and its corporatecustomer would be better off withthe latter product. The utility avoidslosing a customer’s renewableenergy business and still makes aprofit. The customer reduces theenvironmental impact of its energyconsumption at a lower cost than itwould have incurred if it were topurchase unbundled RECs on itsown.

Developing the productBuilding green power productsusing nationally sourced RECs neednot be administratively complex.There are a number of wholesaleREC marketers and brokers that cansupply retail electricity providers.18

This alleviates the need for anelectricity provider to establish amultitude of relationships withowners of renewable power projects,and it can help lower transactioncosts. Some electricity providersmight even want to consideroutsourcing green power productdesign and management to a RECmarketer. In such an arrangement,the electricity provider maintainscontrol of the customer interfaceand billing, while the marketer takescare of developing new green powerproduct designs, sourcing the RECs,and passing them on to the retailelectricity provider to bundle withthe power.19

Another factor to consider whendeveloping this new type of greenpower is product certification. Oneconcern that companies and otherenergy buyers often raise whenevaluating a green power purchaseis “How can I be certain that the


comprised of inexpensive wind RECsfrom Alberta. A Canadian utilitycould offer geothermal-based greenpower that uses low-cost geothermalRECs from California or even BajaCalifornia. Such NAFTA-based greenpower could be an attractive, newproduct for retail electricity suppliersto consider offering to large corpo-rate customers who have operationsthroughout North America or whoare very price sensitive.

To ensure the integrity of NAFTA-based products, compatible green

green power I buy actually has beengenerated, comes from a publiclyacceptable renewable resource, andhas not been sold to another buyer?”To ensure customer confidence ingreen power using nationallysourced RECs, retail electricityproviders should use RECs that havebeen certified by a respectedrenewable electricity certificationprogram. The Green-e® program inthe U.S., for instance, independentlyaudits renewable electricity produc-tion to verify that the power andRECs were produced by the pur-ported renewable generationfacility, delivered in the amountspecified, created by a renewableresource accepted by numerousstakeholders, and not “double sold”or claimed by more than one party.Green power using nationallysourced RECs would be consideredGreen-e® certified as long as theRECs are certified.20

Companies and other large electric-ity customers can play an active rolein encouraging the introduction ofthis novel product into the market-place. A customer can successfullyapproach its supplier, communicatethat “off-the-shelf” products do notsufficiently meet its needs, andnegotiate with the supplier tointroduce green power using nation-ally sourced RECs (Box 2). Largeelectricity buyers such as corpora-tions, universities, military bases,and government agencies have thepurchasing scale to entice retailelectricity providers to respond tosuch requests.21 Likewise, suppliers,especially those in deregulatedmarkets, should find it in their

interest to satisfy such demands inorder to build customer loyalty orincrease market share.

Green power using NAFTA-sourced RECsIn the future, retail electricityproviders might want to considercreating green power using “NAFTA-sourced” RECs. Given the integra-tion of electricity markets in theNAFTA region,22 green powermarkets could increasingly integrateas well. For instance, a U.S. utilitycould offer wind-based green power

A Corporate Customer Takes the Lead

a new, alternative green power offeringthat would meet Tower’s high volumedemand but at lower prices. Oneoption was for PES to partner with aREC marketer to source lower costRECs that could form the basis of thisnew product. PES responded bystructuring a deal with REC marketerSterling Planet, which agreed to supplyRECs wholesale to PES from biomass-fueled power facilities located inseveral states across the country. Inturn, PES rebundled these nationallysourced RECs with conventionallygenerated electricity to form a newretail green power product. The cost ofthe RECs would be incorporatedseamlessly into the customer’s monthlyelectricity bill.

By proactively engaging its electricitysupplier, Tower was able to receivegreen power that met its requirements.Most notably, the cost of the greenpower using nationally sourced RECswas lower than that of the existingproduct. By responding to Tower’srequest, PES strengthened its relation-ship with a major customer andexpanded its portfolio of green poweroptions.

In 2003, the Tower Companies— amajor commercial and residentialdeveloper in the Washington, D.C.metro area that is recognized for itsgreen building designs—startedpurchasing green power for 25 percentof the annual load for seven apartmentcomplexes and for 50 percent of theload for six large office buildings. This16 million kWh per year deal was thefirst by a private developer in thenation’s capital. However, it was not atypical green power transaction.

When Tower first expressed interest inbuying green power, its retail electricityprovider offered its off-the-shelfproduct. The supplier, Pepco EnergyServices (PES), had wholesale powercontracts with several local projects thatwere producing electricity from landfillgas. PES was offering this landfill gas-based green power to retail commercialand residential customers. However,the premium price charged for thiselectricity was too high for Tower’sbudget.

Working with the World ResourcesInstitute and the consulting firm ThinkEnergy, Tower requested PES to create

Box 2


power certification programs andelectronic REC tracking systemsare needed among the NAFTApartner countries. Large corporateenergy buyers may be hesitant topurchase green power usingNAFTA-sourced RECs withoutsome consistency in certificationpractices (for example, similarguidelines for eligible resourcesand auditing procedures). A RECtracking system consists of a coordi-nated set of databases that track andregister certificate generation,sales, and ownership. It reduces thecost of tracking and verifying thewholesale transactions of the RECsthat constitute green power. Toensure compatibility across coun-tries, REC tracking systems shouldmeet the minimum standards beingdeveloped by the North AmericanAssociation of Issuing Bodies.23

III. LONG-TERM FIXED-PRICE GREEN POWERA shortcoming among the currentgeneration of green power productsis that the business benefits to acorporate customer are often limitedto improving the company’s publicrelations or helping the companymeet its environmental goals. If asignificant premium is attached to theproduct, these benefits may beinsufficient to justify a purchase formany potential customers. Onestrategy retail electricity providerscan pursue to address this shortcom-ing is to introduce green powerproducts with fixed pricing forextended terms (ideally five or moreyears). Such products could providethe additional benefit of a hedge

against volatile fossil-based electric-ity rates and therefore spur greaterproduct demand among corporateenergy users.

How it worksWith long-term fixed-price greenpower, a retail electricity providerhas a contract to provide greenpower to a customer for a number ofyears at a price that remains fixed orflat. Such contracts are ideally suitedfor power from renewables such aswind, geothermal, solar, and low-impact hydro because the fuel is“free.” Consequently, there is littleif any volatility in the cost of gener-ating power from these resources.24

The major cost drivers, rather, arethe up-front capital expenses. As aresult, renewable generators have astrong interest in lining up long-term contracts for power to helpfinance new projects, and they cansubsequently offer power at a fixedprice with no risk of fuel pricevolatility.

Contracts for long-term fixed-pricegreen power can function as ahedge against rate volatility ofelectricity generated by fossil fuels(coal, oil, and natural gas). Fossilfuel prices rise and fall in responseto demand and supply conditions inthe energy markets. In somemarkets, price changes in theseprimary fuels show up in the pricefor electricity and are passed on toretail electricity customers. Inparticular, natural gas has experi-enced significant price volatility inrecent years, driving electricity ratefluctuations in power markets suchas Texas (Figure 2). In 2003, theaverage monthly price for indus-trial-use natural gas in the U.S.ranged from $4.80 to $8.01 permillion cubic feet, a 67 percentswing that included a one-monthprice spike of 22 percent betweenFebruary and March.25 Natural gasprice volatility is expected tocontinue, since the fuel is in highdemand for power generation and

Correlation between Natural Gas and Retail ElectricityPrices in Texas Power Market

Figure 2

Note: Data reflects 10 trading day electric and gas average and megawatt daily 5x16 standardproduct (12-month average) from January 2, 2002–February 4, 2003.Source: Association of Electric Companies of Texas (AECT), Inc. 2003. Wholesale ElectricPrices Rising. Austin, TX: AECT.


other industrial uses and low-costsupplies are being exhausted.26

The extent of the hedge from fixed-price green power is tied to theamount of power that is purchased.To illustrate, suppose a corporateenergy manager buys 10,000 MWhper year of fixed-price green powerfor a factory, representing 20percent of the location’s projectedannual load. Only 20 percent of thefacility’s electricity demand will beprotected against price fluctuationsin the power market. The factorywill still be exposed to volatility forthe balance of its electricity needs.

The value of the hedge can besignificant when considering thecost that corporate energy consum-ers could incur if they chose tostructure financial or other conven-tional long-term hedges to covernatural gas price risk. For example,energy consumers can structurenatural gas futures or swaps tomanage price risk, though typicallyonly for short durations (less thanfive years) and at some incrementalcost due to transaction costs and/or arisk premium. Over the past fewyears, however, prices of long-termforward natural gas contracts havetraded at a premium of about $5 perMWh over comparable long-termforecasts of spot natural gas prices.27

This implies that there is a cost tohedging with conventional instru-ments—a cost that would not beincurred when using a green powerproduct that achieves the samehedge. A green power buyer canfactor this into the purchasingdecision. For instance, if the green

power product is priced at $45 perMWh, the buyer could potentiallyrationalize the cost, for example, as$40 per MWh for green power plus$5 per MWh for the hedge. Becausegreen power usually costs more thanconventional power, it is possible forthe green power premium to beoffset by the value of the hedge.

One of the advantages of having ahedge is that it provides an adminis-trative benefit to corporate energymanagers, since cost stabilizationeases the management of energybudgets. For most companies,electricity is an indispensableresource that must be purchasedregardless of the price. In economicterms, this means the demand forelectricity is relatively “inelastic.”Some firms are capable of changingproduction schedules or shuttingdown a production line when pricesbecome very high. For most compa-nies, however, when price spikes dooccur, energy managers can exhausttheir budgets quickly and run over-budget to cover ongoing energyexpenses. Fixed-price power, on theother hand, provides cost stability andpredictability for managing budgets.

Where would it be attractive?Currently, long-term fixed-pricegreen power is not common ineither regulated or deregulatedelectricity markets. The vastmajority of retail green powercontracts are neither long-term nordesigned specifically to provide ahedge against electricity ratevolatility. In which markets, then,would this next generation productbe attractive?

Regulated markets provide someopportunity for fixed-price products.A utility can procure wholesalegreen power on long-term fixed-price contracts, thus managing itsown fuel price risk, and then directlypass the cost stability on to itscorporate customers. Austin Energy,for example, is a utility that hassuccessfully introduced such aproduct (Box 3). Some utilities havetraditionally emphasized electricityrate stability, however, and keptrates fairly constant. In the absenceof rate volatility in these serviceterritories, there would be lessdemand for green power productsthat provide hedge value.

In comparison, deregulated electric-ity markets may be more attractivefor long-term fixed-price contractsbecause these markets can besusceptible to price volatilitydepending on how deregulation isimplemented, the resource mix, andother factors. In these markets, theretail price of power can rise and fallaccording to supply and demandwithout buffering by a regulatedutility. In fact, three regions of theU.S. that have undergone electricityderegulation—Texas, California, andthe Northeast—have traditionallybeen the most expensive powermarkets, the most dependent onnatural gas as a fuel source, and haveexperienced significant pricevolatility at times.

Markets that are in transition from amonopoly to a competitive environ-ment also could be opportune forintroducing long-term fixed-pricegreen power products. If the contract


Stabilizing Electricity Costs: Austin Energy’s GreenChoice® Program

Austin Energy, a regulated municipalutility serving Austin, Texas, launchedthe nation’s first long-term fixed-pricegreen power product for both commer-cial and residential customers in 2000.In designing the product, calledGreenChoice®, Austin Energy locked inits own long-term fixed-price contractsfor wholesale power from a variety ofrenewable energy projects.GreenChoice® is approximately 80percent wind, 18 percent landfill gas,and 2 percent small hydropower, all ofwhich is generated in Texas.

An Austin Energy electric bill typicallyincludes four different charges: fossilfuel, energy (overhead and transmis-sion), peak demand, and taxes. The fossilfuel charge is typically variable. In thepast, Austin Energy adjusted the fuelcharge about once per year to reflectfossil fuel costs, but these adjustmentsbecame more frequent starting in 2000with the volatility in natural gas prices.In the past four years, Austin Energy hashad to increase its fuel charge severaltimes in relatively short intervals. Withthe GreenChoice® product, though, thenormal fossil fuel charge is replaced by a“green power charge” proportional tothe amount of renewable energy that acustomer chooses to buy. Unlike thefluctuating fossil fuel charge, the greenpower charge is fixed for either 5 to 10years depending upon customerpreferences.

Austin Energy offered two batches ofgreen power, each available in April2001 but at different prices. The greenpower charge for Batch 1, which wassubsidized by the City of Austin, was 1.7cents/kWh. Batch 1 totaled 100,000MWh/year and was fully subscribed sixmonths prior to actual availability. Batch2 totaled 260,000 MWh/year with agreen power charge of 2.85 cents/kWh.Batch 2 was fully subscribed by January2004, at which time Austin Energy beganoffering a third batch of green power.

In contrast to the fixed green powercharges, Austin Energy’s fossil fuelcharges have ranged between 1.3 and2.8 cents/kWh (Figure 3). Thesefluctuations generally follow changes inthe price for natural gas, which is widely

Box 3

used in Texas for electricity generationand other industrial purposes. AustinEnergy, in particular, uses natural gas for30 percent of its power generation. As thefossil fuel charge rises above 1.7 cents/kWh, customers that signed up for Batch1 green power actually pay less for theirrenewable energy than for conventionalenergy. Even without the governmentsubsidy, Batch 2 green power sells at nearparity with conventional power and maybe less expensive in later years dependingon changes in natural gas prices.

The experience of IBM illustrates thehedge value of GreenChoice®. In March2001, IBM signed a five-year contract for5.25 million kWh per year from Batch 1.At the time, the company predicted thatthe green power would actually cost apremium of $30,000 per year, but optedfor the purchase anyway due to threeleading factors. First, the fixed-pricenature of the contract provided a hedge inthe face of unpredictable energy marketsand IBM believed that at some point thedeal would pay off. Second, the coststability provided by the deal made iteasier for the company to manage itsenergy budget. Third, buying green powerwas an opportunity for the company toreduce the greenhouse gas emissionsassociated with its business operations.

Austin Energy’s fuel charge for conven-tional power spiked in 2001 and IBMsaved $20,000 in its first year in the

program. During 2002 and 2003,GreenChoice® cost slightly less thanconventional power. The fossil fuelcharge rose again in 2004 and IBMexpects to save over $60,000 for the year.

Given the business benefits it provides,GreenChoice® quickly has become thenation’s largest green power programamong regulated utilities and almostdouble the size of the second largestprogram in terms of MWh sold per year.1

But the Austin Energy approach has notyet been widely replicated. Only ahandful of utilities in the U.S. havedeveloped green electricity programsthat protect customers from somevariable charges.2 To build successfulgreen pricing programs and meet theinterests of commercial and industrialenergy buyers, utilities should review theAustin Energy experience and considerapproaches to integrating green powerhedge value into their offerings.

Notes1. U.S. Department of Energy. 2003. Energy

Efficiency and Renewable Energy, GreenPower Network. Available at: http://www.eere.energy.gov/greenpower/markets/pricing.shtml?page=3.

2. Bird, L., B. Swezey, and J. Aabakken. 2004.Utility Green Pricing Programs: Design,Implementation, and Consumer Response.NREL/TP-620-35618. Golden, Colorado:U.S. Department of Energy NationalRenewable Energy Laboratory.

Figure 3. Austin Energy’s Fossil Fuel Charge vs. GreenChoice® Charge

Source: Austin Energy, 2004.

1 0 C O R P O R AT E G U I D E T O G R E E N P O W E R M A R K E T S W O R L D R E S O U R C E S I N S T I T U T E

were to span the transition period,this type of green power could allaycorporate customer concern aboutelectricity price spikes when theregulated price caps are lifted.

IV. GREEN CONTRACTFOR DIFFERENCESA third next generation green powerproduct that could provide corporateenergy users with additional busi-ness benefits beyond good publicrelations is a green contract fordifferences (CFD). A green CFD isa long-term (perhaps 5 to 10 years ormore) financial contract between a

does not involve scheduling thephysical delivery of power, whichcan be a market barrier to corporategreen power purchases. It alsoallows the customer to maintain allof its existing power contracts andarrangements relative to energypurchasing, which may be attractiveto companies with multiple loca-tions. Lastly, from the powerconsumer’s perspective, a greenCFD could potentially lessen thecredit requirements for the renew-able generator as compared to long-term fixed-price power contracts. Agreen CFD is a hedge and not acontract for physical power. As aresult, issues of power reliability andpossible supply interruption arediminished to some extent, and thusthe power consumer may be lessconcerned with the generator’sfinancial condition.

For the renewable generator, the keybenefit is that a CFD guarantees itsprice for power and thus secures therevenue stream necessary for projectfinancing. For the electricity cus-tomer, the CFD provides a hedgeagainst electricity price spikes in aderegulated power market. Since therenewable generator transfers theRECs it creates to the customer, agreen CFD can be a way for corpo-rate energy users to “green” theirpower supply as well.28 Furthermore,the fact that a CFD can be structuredfor terms of 10 years or more can bean advantage to corporate customerswhen compared against other hedg-ing options, such as forwards, thatbecome more expensive to structureas the term is extended.

retail power consumer and a renew-able power generator that protectsboth parties from price fluctuationsin competitive power markets. Aswith long-term fixed-price greenpower, a green CFD uses renewableenergy as a hedge against pricevolatility of electricity generated byfossil fuels. Despite this similarity,though, the green CFD is fundamen-tally different and may offer severaldistinct advantages.

A CFD is a common financialinstrument used in energy and othermarkets and involves an exchange ofpayments between two parties. Inthe case of a green CFD, the ex-change of payments is between aretail power consumer and a renew-able power generator, and it hingesupon an agreed price for power. Italso involves a transfer of RECs fromthe generator to the consumer. Theagreed price—known as the “strikeprice”—is compared to the fluctuat-ing price for power in an electricityspot market. In a green CFD, eachparty is obligated to pay or receivefrom the other party the differencebetween the strike price and theactual market price.

A CFD is not an agreement forpower; it exists in parallel to existingelectricity contracts. The renewablegenerator continues to sell its powerinto the local market, while thepower consumer (the CFDcounterparty) continues to buypower from its retail electricityprovider with no effect by the CFD.As a result, a green CFD has someadvantages over long-term fixed-price green power products. A CFD

WRI’s Corporate GuideSeries

This publication is the sixth install-ment of the Corporate Guide toGreen Power Markets series, whichis based on WRI’s experience withthe Green Power Market Develop-ment Group. Previous installmentsare:

1. Introducing Green Power forCorporate Markets: Business Case,Challenges, and Steps Forward

2. Opportunities with Landfill Gas

3. Corporate Greenhouse GasEmissions Inventories: Accountingfor the Climate Benefits of GreenPower

4. Introducing the Green PowerAnalysis Tool

5. Renewable Energy Certificates:An Attractive Means for Corpo-rate Customers to PurchaseRenewable Energy

Each of these Corporate Guides canbe found atwww.thegreenpowergroup.org/publications.html.


Figure 4 illustrates how a greenCFD works using wind power.29

Suppose a company were to enterinto a 10-year CFD with a windpower facility and the two partieswere to agree on a strike price of$42 per MWh. The strike price iscompared against an index, specifi-cally the hourly spot market pricefor power in a wholesale powermarket that has liquidity and pricetransparency. If the spot price forpower were to increase to $50 perMWh, the generator would receive$50 for each MWh it sells on thespot market but would then pay thecompany $8 per MWh. This protectsthe company against price increasesfor the electricity it buys on themarket. Conversely, if the spot pricewere to drop to $35 per MWh, thegenerator would receive $35 perMWh for the power it sells on thespot market but would receive fromthe company $7 per MWh. Thus the

generator’s net revenue per MWh isguaranteed and fixed.

Since RECs are transferred with thepayments, the REC prices areessentially “floating” and can evenbe negative. The frequency withwhich the payments and RECtransfers are settled is a point ofnegotiation between the two parties.For example, the settlements couldoccur monthly or quarterly.

A CFD does involve risk stemmingfrom differences in the location ofthe consumer and the generator. Thetwo parties may face different spotmarket prices. If the two markets arenot perfectly correlated in the riseand fall of electricity prices, thenthere is a variance that may reducethe effectiveness of the CFD. For anintermittent resource such as wind,there is the additional risk that thewind may not blow at the ideal timefor the corporate consumer, specifi-

cally when the spot market price ishigh and the customer is looking forprotection against volatility. Despitethese challenges, initial researchsuggests that wind-based CFDs canprovide a good, if not perfect, hedgethat can cut price variability in halffor corporate customers.30

Green CFDs are relatively new.Although they have been success-fully completed in Canada (Box 4),no green CFDs have been com-pleted in the U.S. to date.

As Box 4 illustrates, next generationgreen power products may beapplicable in markets outside theUnited States. Canada and Mexico,partners with the U.S. in the NorthAmerican Free Trade Agreement(NAFTA), are good candidatemarkets. The increased dialoguebetween these partners as theyintegrate markets provides anopportunity for the import andexport of new electricity productdesign concepts that help buildmarkets for renewable energy. Thefollowing two sections will exploreopportunities for introducing nextgeneration green power in these twocountries.

V. OPPORTUNITIES FOR“NEXT GENERATION”GREEN POWER PRODUCTSIN CANADACanada has vast potential for renew-able energy. The nation’s electricitygeneration is currently dominatedby hydropower, although fuelsources vary between provinces(Figure 5). “New” renewable

How a Green Contract for Differences WorksFigure 4


resources such as wind, solar, andbiomass are responsible for approxi-mately 1 percent of the nation’spower generation. Nonetheless, theopportunity for increasing electricitygenerated by new renewables issignificant. For example, Canadianwind resources could support at least10,000 MW of new wind generationfacilities by 2010.31 Over 1,600 MWof new, small-scale hydro projectsare economically feasible usingcurrent technologies.32 Forestresidues, energy crops, and agricul-tural wastes could supply over 5,000MW of new biomass-to-energy

facilities.33 Additionally, there aresignificant opportunities for waveand tidal power generation, espe-cially along the country’s Atlanticcoast, once these technologies beginto mature.34

Retail green power sales to corpo-rate customers can play a role inhelping Canada realize this renew-able energy potential. In particular,market conditions appear to be rightfor each of the next generationgreen power products to be anattractive option for both electricitysuppliers and corporate buyers.

Green power using nationallysourced RECsSimilar to the U.S., Canada has amarket in which households, compa-nies, and other institutions canvoluntarily purchase green powerand in turn help support the devel-opment of “new” renewable re-sources. Since the launch of its firstproduct in 1998, the voluntary greenpower market in Canada has grownto support 775 MW of renewableenergy capacity by the end of 2003.35

Ten retail electricity providers nowoffer products based on wind, solar,biomass, and other renewableresources.36 All of these Canadianproviders source their green powerfrom generators whose facilities arelocated within the provider’s serviceterritory or province.37 For example,wind and biogas facilities nearToronto supply Ontario PowerGen’s“Evergreen Green Power.”SaskPower’s “GreenPower” comesfrom a wind farm in southwestSaskatchewan.

As with “current generation”products in the U.S., Canadian greenpower can be expensive. Althoughprices can vary significantly, theaverage green power premium isapproximately U.S. 4.1 ¢/kWh (U.S.$41/MWh).38 Relative to averageCanadian conventional power rates,this represents a 60 percent pre-mium for commercial customers anda 90 percent premium for industrialcustomers.39 The premiums typicallyare higher in provinces dominatedby low-cost hydropower and lower inother provinces (Figure 5). Suchhigh prices help explain why thepenetration rate of most green

Breaking Ground with Green CFDs in Alberta,Canada

company. In addition, the retail powersupplier, ENMAX, serves as anintermediary owing to its existingcustomer relationship, although it hasno risk exposure in the contract. TheCFD covers a load of 26,000 MWh peryear and is indexed to Alberta’s spotelectricity market (there is only onespot market in the province). Thestrike price for the contract is in therange of 7 cents Canadian per kWh.Since contract inception, the spot pricefor power has fluctuated above andbelow the strike price, meaning bothparties have made and receivedpayments.

In addition, the Province of Albertapurchased a 10-year green CFD basedon wind power and a 20-year greenCFD based on biomass. The renewablegenerators are VisionQuest andENMAX for the wind and CanadianHydro for the biomass. The contractscover a total load of 210,000 MWh peryear (105,000 MWh each) and areindexed to the Alberta spot electricitymarket.

The concept of a green CFD has beenput into practice in Alberta, wherewind- and biomass-based CFDs havebeen structured in the wake of marketderegulation.

Wholesale electricity market restructur-ing began in Alberta in 1996. In 2000,power prices spiked, at one pointreaching a 500 percent increase overprices at the start of the year. Pricevolatility was hitting power marketsthroughout western North America dueto a combination of factors, includingthe California electricity crisis, naturalgas price increases, capacity andtransmission issues, and gaming bymarket participants. As Alberta movedto full deregulation for both wholesaleand retail markets in January 2001,energy buyers understood the value ofhedging against electricity pricevolatility.

In September 2001, Calgary Transit ofthe City of Calgary began a 10-yeargreen CFD based on wind power. Thewind generator is VisionQuest, adivision of the TransAlta power

Box 4


power products among corporatecustomers in Canada remains below1 percent.40

Green power designed with nation-ally sourced RECs could help reducethese premiums and, in turn, in-crease the attractiveness of greenpower to energy users and helpelectricity providers acquire newcorporate customers. Suppose acompany in Ontario seeks to pur-chase wind-based green power butfinds the premium of the local, “off-the-shelf” product too high. Thecompany’s retail electricity providercould satisfy the customer’s needs bysourcing wind RECs from a provincesuch as Alberta that has moreabundant and lower cost windresources than Ontario. The pro-vider then could rebundle theseRECs with local, generic electricityto create a new, less expensive greenpower product.

Green power designed in thisfashion is not currently beingoffered in Canada, but severalfactors could make it a viableproduct for retail electricity provid-ers to introduce. First, Canada hasregional differences in renewableresource abundance and cost thatretail electricity providers canleverage. Second, many electricityproviders already are familiar withREC markets and therefore are onestep closer to being prepared topurchase certificates on a wholesalebasis across provinces and thenrebundle them with local electric-ity. Third, a green power certifica-tion program, EcoLogo™, hasalready been established in thecountry.41 This would help instillbuyer confidence in rebundledgreen power products. Finally,given the advent of competition inthe Alberta and Ontario powermarkets, retail electricity providers

have an incentive to introduceproducts that meet customerdemands. Likewise, corporatecustomers could have some degreeof “buyer power” to encouragetheir electricity providers tointroduce this next generationproduct.

Long-term fixed-price greenpowerAnother retail electricity productthat could be attractive to Canadiancorporate electricity customers islong-term fixed-price green power.The applicability of this product willvary by province, depending uponthe potential for volatility in elec-tricity prices.

In some provinces, electricity rateshistorically have been low andstable. For example, large corporatecustomers in the regulated marketof Manitoba have had the same low

Profile of Canadian Electricity Generation by Fuel TypeFigure 5

Source: Statistics Canada 2002. Report on Energy Supply-Demand in Canada. Ottawa, Canada: Statistics Canada.


electricity rates (approximately U.S.1.5 ¢/kWh) for over 10 years.42 Theabundance of hydropower in theseprovinces is a leading factor underly-ing these rates.

Electricity rate escalation andvolatility is possible, however, inprovinces where hydropower is notas abundant and where natural gas isthe fuel of choice for new genera-tion capacity. In the regulatedmarket of Saskatchewan, for ex-ample, SaskPower’s corporatecustomers recently have beenexperiencing rate hikes. The utilityraised rates 3–8 percent in 2002 andis proposing increases of 8–14percent in 2004 and 2–4 percent in2005. This price escalation is due inpart to rising fuel costs as the utilitychanges its generation mix byincreasing its use of natural gas.43

Similar developments are occurringin the two provinces experimentingwith electricity market deregulation,Ontario and Alberta. Electricity ratechanges over the past several years inAlberta have been closely tied tofluctuations in natural gas prices(Figure 6). In the future, Ontario andAlberta are expected to add 5,000and 2,000 MW, respectively, ofnatural gas-fired generation capacityby 2007. For Ontario, the share of theprovince’s power generation fromnatural gas therefore will rise from13 percent today to 30 percent.44

Although Canada produces morenatural gas than required for domes-tic use, it is part of an integratedNorth American market and exportsnearly 60 percent of its gas to meetgrowing U.S. demand. Canada’snatural gas production is projectedto grow at a rate of only 0.5 percentannually, while its own domestic

consumption grows at 2.2 percent.45

These trends suggest an increasingdisparity between supply anddemand46 and increased prices fornatural gas.

The net result of these develop-ments is that corporate customers inseveral Canadian provinces, espe-cially Alberta, Ontario, andSaskatchewan, are increasinglyexposed to the risk of electricityprice increases. Therefore, there is agood market opportunity for retailelectricity providers to introducelong-term fixed-price green powerfor their large corporate customersas a hedge against electricity ratevolatility. A product with suchbusiness benefits could help elec-tricity suppliers expand their greenpower programs.

Green contract for differences(CFDs)Green CFDs could be an attractiveproduct for Canada’s deregulatedmarkets. A few Canadian firmsalready have experience withstructuring CFDs (Box 4). Therecent price volatility in thesemarkets could spur demand fromcorporate energy users.

Electricity market deregulation hasoccurred in Canada to varyingdegrees and with mixed results.Alberta and Ontario are the mostadvanced in implementing fullwholesale and retail competition,while other provinces are moving tosome form of wholesale competitiononly. In 1995, Alberta introducedderegulation in an effort to spur newgeneration capacity while containing

Trends in Alberta Electricity and Natural Gas PricesFigure 6

Note: Natural gas prices are simple monthly average NGX Intra-AB same day settlementprices.Source: Alberta Electric System Operator, Energy Trading System; online data available athttp://ets.powerpool.ab.ca. Canadian Natural Gas Focus. 2001, 2002, 2004. Calgary, Alberta:GLJ Energy Publications.


costs. However, as wholesale compe-tition gave way into full marketderegulation in 2001, power ratesspiked and fluctuated widely. As aresult, the government intervenedand installed price caps for residen-tial customers. Large businessconsumers did not receive pricecaps and consequently experiencedsubstantial increases in their elec-tricity costs, though these werepartially offset by governmentrebates.47

Ontario introduced legislation forderegulation in 1998 and moved toopen its electricity markets com-pletely in 2002. Like Alberta,Ontario experienced significant priceescalation and volatility in theaftermath of deregulation. Thegovernment moved to install pricecaps for residential and other smallconsumers, but has maintained an

open market for commercial andindustrial consumers since March2003.48 Although price caps effec-tively eliminated competition at theretail level, large-volume customerscan still negotiate prices directly withgenerators or power marketers orpurchase at the spot market price.49

Large customers who buy electricityat the wholesale price are eligible fora government rebate of roughly halfthe difference between the marketprice and 3.8¢ per kWh.50 This rebateis in effect until April 2006.

The price spikes in these provincesare generally attributed to a tightsupply/demand balance, highernatural gas costs, and higher elec-tricity import prices, which werepartly driven by problems in Califor-nia.51 Electricity price fluctuationsthroughout western North Americain 2001 have also been attributed

partly to gaming by market partici-pants.52 As Figure 7 illustrates,significant price fluctuations havecontinued in both Alberta andOntario into 2004.

Going forward, price volatilityseems likely to persist in Canada’sderegulated markets. Both Albertaand Ontario have plans for increaseduse of natural gas, which couldcontribute to volatility. If govern-ments decide to proceed withfurther market deregulation, pricecaps for residential customers andrebates for industrial consumers maybe disbanded. While the effects ofthese changes are hard to predict,they add uncertainty and can contrib-ute to short-term price swings. Witha track record of persistent volatility,Canada’s deregulated provincesappear to be good markets in whichlarge corporate customers andrenewable power generators couldconsider establishing green CFDs.

VI. OPPORTUNITIES FOR“NEXT GENERATION”GREEN POWER PRODUCTSIN MEXICOThe Mexican electricity market ispotentially attractive for at least twoof the “next generation” greenpower products. The opportunity isqualified, however, by severalfeatures of the Mexican market thatdiffer from those of U.S. and Cana-dian markets. First, existing powergeneration in Mexico is dominatedby fuel oil and natural gas. Over two-thirds of power generation comesfrom these two fuels (Figure 8), asignificant difference from the

Alberta and Ontario Electricity Price Fluctuations,2002-04

Figure 7

Source: Alberta Electric System Operator, Energy Trading System; online data available athttp://ets.powerpool.ab.ca. Independent Electricity Market Operator, Hourly Ontario EnergyPrice Monthly Average; online data available at http://www.theimo.com/imoweb/marketData/marketSummary.asp.


dominance of coal in the U.S. andhydro in Canada. The prevalence ofoil and natural gas suggests thatthere is an opportunity for greenpower to serve as a hedge againstfuel price volatility in Mexico.

Second, a voluntary retail greenpower market does not yet exist inMexico. Although 3 percent of thecountry’s electricity is generated bynon-hydro renewable resources, it isdelivered to the grid and sold only asgeneric power.53 No Mexican retailelectricity supplier currently isoffering green power to corporate orother customers. Nevertheless, thisdoes not preclude the emergence ofvoluntary markets in the future. Infact, given the country’s legislativerequirement that utilities mustsource power from the lowest costsupply when providing their standardoffer, voluntary markets for green

power may become critical forspurring new renewable powergeneration.

Third, electricity supply in Mexico isdominated by just two state-ownedcompanies and therefore is morehighly concentrated than in itsnorthern neighbors. The FederalCommission of Electricity(Comisión Federal de Electricidador “CFE”) and the Central Electricand Power Company (Luz y Fuerzadel Centro or “LFC”) are stateutilities that generate and deliverthe vast majority of electricity inMexico. CFE produces over 80percent of the nation’s power andcontrols 96 percent of the country’stransmission and distribution (T&D)network. LFC generates approxi-mately 2 percent of the country’spower and controls the remainder ofthe T&D system.54 LFC servesMexico City and municipalities inseveral nearby states,55 while CFEserves the rest of the country. Theremaining generation comes fromindependent power producers,Petróleos Mexicanos (mostly for itsown use), and companies with theirown on-site generation.56 The PublicElectricity Utility Law excludesprivate companies from providingpower directly to end customers; thisis the realm of CFE and LFC only.The electricity sector reforms of1993 opened the market to indepen-dent power producers, but only aslong as they either consume thepower themselves,57 export it outsideof Mexico, or sell it to CFE.58

Therefore, under the existingmarket structure, whether or not“next generation” green power

products will be offered in Mexico isdependent upon CFE and, to a lesserdegree, LFC.

Fourth, the Mexican electricitymarket is still regulated by thenational government. In the late1990s, former President Zedillooutlined an industry deregulationplan that would have increasedprivate sector participation ingeneration and distribution services.However, the proposal was resound-ingly rejected by the legislature,59

and some observers have concludedthat deregulation of the Mexicanelectricity market is unlikely in theforeseeable future.60 Therefore, atleast for the time being, productslike a green contract for differenceswill be less relevant for Mexico,since there is no spot market pricefor wholesale electricity againstwhich a renewable generator and acorporate energy user can hedge.

However, several realities of de-mand and supply suggest thatMexico has the potential for corpo-rate markets for green power. Onthe demand side, companies inMexico have expressed interest inpurchasing renewable energy.According to a June 2002 GallupMexico survey of executives fromthe country’s top 100 electricity-consuming companies, 94 percent ofrespondents said they would pur-chase renewable energy if given theoption. Some 54 percent of respon-dents said they would be willing topay more for green power, althoughthe average acceptable premium wasonly 11 percent.61 Despite the factthat U.S. market experience indi-

Mexican ElectricityGeneration — 2002

Figure 8

Note: Figures reflect net generation(excluding parasitic demand)Source: International Energy Agency(IEA). 2004. Energy Balances of OECDCountries, 2002. Paris, France: IEA.


cates there is a disparity betweensurveyed intentions and actualbehavior, this 94 percent favorableresponse rate in Mexico is higherthan that in similar surveys con-ducted in the U.S.62

In particular, multinational corpora-tions (MNCs) might have an interestin purchasing green power for theirMexican operations. WRI’s experi-ence with MNCs indicates thatsome recognize the need forpursuing sustainable businesspractices in all countries in whichthey have facilities, not just in theirhome markets. Operations outsidethe U.S. increasingly are seeking tocapture the same business benefitsgreen power can provide, such asstrengthened customer relation-ships or reduced greenhouse gasemissions. At the same time, WRI’sobservations suggest that in orderto be attractive, green power inMexico will need to be pricedcompetitively given the pricesensitivity exhibited by MNCs.

On the supply side, the country’sample domestic renewable re-sources are relatively untapped.Although Mexico currently only hasless than 10 MW of installed windcapacity, the government estimatesthat the country has the potential toinstall at least 5,000 MW capable ofgenerating wind power at an eco-nomically attractive 3.5–4.0 U.S.¢/kWh.63 Good wind regimes arelocated in Mexico’s mountain andcoastal regions, particularly Oaxaca,as well as the states of Baja Califor-nia, Yucatán, Zacatecas, and alongthe U.S. border.64 Likewise, the

country currently has less than 1,000MW of installed geothermal capac-ity, but an additional 2,400 to 8,000MW is possible in Baja Californiaand in the central and northwestregions of the country.65 Althoughthe potential for small-scale hydro-power (<5 MW capacity) nationwidehas not been fully evaluated, 400MW could potentially be developedin the states of Veracruz and Pueblaalone.66 In light of their large scaleand lower generation costs, wind andgeothermal likely will be theprimary renewable resourcescapable of supplying retail greenpower markets.67

Additional market factors suggestthat introducing two of the “nextgeneration” products, green powerusing nationally sourced RECs andlong-term fixed-price green power,could be a promising strategy forretail electricity providers to buildtheir businesses and help acceleratemarkets for renewable electricity inMexico.

Green power using nationallysourced RECsGiven that regions with the greatestrenewable resource potential arenot always co-located with majorindustrial areas, green power usingnationally sourced RECs may be anattractive product to offer corporatecustomers in Mexico. The federaldistrict of Mexico City, for instance,has significant corporate electricitydemand, but relatively few renew-able resources. Local supply is likelyinsufficient to satisfy local corporategreen power demand. In fact, someof the most abundant and lowest cost

renewable resources are located inregions of the country that aredistant from major centers ofcorporate electricity demand. Wind-rich Oaxaca (on the Pacific coast insouthern Mexico) and geothermal-rich Baja California, for example,are located hundreds of miles fromMexico City and from the manufac-turing regions along the Texasborder. Transmitting renewableelectricity from generators to endusers would add significant costs tothe power.

Green power using RECs sourcedfrom across Mexico would overcomethese challenges. For instance, theutility LFC could bundle wind RECsfrom Oaxaca with locally generatedgeneric power. This strategy wouldcircumvent the lack of local windresources and the need for costlylong-distance power transmission.This, in turn, would allow LFC tooffer an attractive product thatprovides customers with a relativelyinexpensive means of “greening”their electricity supply. Further-more, it would provide a revenuestream to help support the windfacilities.

Long-term fixed-price greenpowerLong-term fixed-price green poweris another potentially attractiveproduct for Mexican corporateelectricity customers. Since 1997,electricity tariffs have been adjustedon a monthly basis by the Ministry ofFinance to reflect the cost of powerproduction. Tariffs are indexedagainst inflation, the exchange rate,and international fossil fuel prices.68


Among the fossil fuels, changes inthe wholesale prices of domesticfuel oil and natural gas have themost significant impact on electric-ity rates (Table 1). In addition,natural gas has been the mostvolatile in recent years.

Electricity rates for both commer-cial and industrial customers re-cently have exhibited a moderatedegree of volatility. From 2000through early 2003, retail industrialelectricity rates fluctuated +/- 13percent from the period’s averageprice of U.S. 6.3 ¢/kWh (61centavos/kWh). Over the sameperiod, commercial rates fluctuated+/- 8 percent from to the period’saverage price of U.S. 14.3 ¢/kWh(138 centavos/kWh).69

In the future, volatility in Mexicancorporate electricity rates couldincrease due to the country’s grow-ing reliance on natural gas for powergeneration. More than 70 percent ofplanned Mexican power generation

capacity additions from 2003through 2012 are natural-gas-firedcombined-cycle plants.70 Thisreliance on natural gas is more acutein the industrial northern states,where more than 95 percent ofplanned capacity additions arecombined-cycle facilities.71 As inmany other countries, combined-cycle plants are the technology ofchoice, since they can be built morequickly, have lower capital andoperating costs, release feweremissions per MWh, and achievehigher efficiencies relative toconventional steam plants.72

Such rapid growth is expected toincrease national demand for naturalgas by 10.5 percent annually through2012.73 This rise in demand isprojected to outpace growth indomestic supply. The share of totalMexican natural gas consumptionthat is imported is expected to climbfrom under 10 percent today to over25 percent by 2012.74 Thus, Mexicanelectricity rates over time are likely

to become increasingly affected byvolatility in domestic and interna-tional natural gas markets.

The net result of these develop-ments is that commercial andindustrial customers in Mexicoincreasingly risk exposure to escalat-ing rates for their conventionallygenerated electricity. In this context,long-term fixed-price green powerwould be attractive for the Mexicanmarket. It would provide a valuablebusiness benefit to corporate energyusers as a hedge against rate volatil-ity. The country has sufficient windand geothermal resources, whichhave zero fuel costs and are ame-nable to long-term fixed-pricecontracts. Furthermore, as theAustin Energy experience indicates(see Box 3), retail electricity provid-ers are able to offer this type ofproduct even if they are regulated.

CFE and LFC should considerintroducing both types of greenpower. The products can be readilydeveloped, are attractive to corpo-rate customers, and are an attractivemeans for both electricity suppliersto start building voluntary greenpower markets in Mexico. Further-more, they would increase privatesector funding for the country’srenewable energy projects, therebycomplementing funding from publicsector sources such as the WorldBank and the Global EnvironmentFacility. When preparing theseproducts, nevertheless, Mexicanelectricity market participantsshould consider establishing a greenpower certification program, as wellas an electronic REC tracking

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VII. SUMMARY PERSPEC-TIVESMany corporate energy users areinterested in having their facilitiesswitch to electricity generated byrenewable resources such as solar,wind, and biomass. But for manylarge buyers, the business benefitsprovided by existing green powerproducts do not justify the pricepremiums. To overcome this marketshortcoming, retail electricityproviders need to develop a set ofnext generation green powerproducts that are more attractive tocorporate customers than thecurrent generation.

Table 2 outlines three new productsthat are good candidates. Greenpower using nationally sourcedRECs can lower price premiumswhile increasing renewable resourceoptions for customers. Long-termfixed-price green power providescustomers with environmentallyfriendly power that also stabilizescorporate energy costs or serves as ahedge. Similarly, green contracts fordifferences can serve as a hedgeagainst fluctuating electricity rates.These products could be attractive inmany markets in the U.S., Canada,and Mexico. Whether or not theyrealize their potential, however, willdepend upon retail electricityproviders proactively developingand introducing them to the market.

Going forward, as these NAFTApartners continue to integrateelectricity markets, the opportunityfor cross-border green power dealscould become more prevalent.Corporate customers in Canada, forinstance, may one day purchasegreen power using RECs sourcedfrom wind facilities in Mexico.Companies in the U.S. may one daypurchase long-term fixed-pricegreen power from neighboringelectricity suppliers in Canada. As aresult, these next generation pro-ducts could help retail electricityproviders and their corporatecustomers build a sustainable energyfuture across all of North America.


ABOUT THE AUTHORS

Andrew Aulisi is a senior associ-ate with WRI’s Sustainable Enter-prise Program. Craig Hanson is asenior associate with WRI’s Sustain-able Enterprise Program.

ACKNOWLEDGMENTS

The authors are grateful to CorinnaKester for her research for thesection on Mexico, Ryan Levinsonfor analysis used in section I, andCarl Schlemmer for his research forthe section on Canada. We thank JeffAnthony, Lori Bird, Mark Bolinger,Blaine Collison, Ted Ferguson,Mark Joyce, and Armando Llamasfor their contributions and sugges-tions. We thank Robert Bradley, LizCook, David Jhirad, Jennifer Layke,Patrick Leahy, and Jay MacAllister atthe World Resources Institute forcomments on early drafts. We thankTheresa Howland (TransAlta), MarkKapner (Austin Energy), RaviKutchibhotla (IBM), CharlesSegerman (The Tower Companies),and Baha Yousef (IBM) for allowingus to use their renewable energypurchases as case examples. Theauthors extend special thanks to allthose we interviewed for input tothis publication including MatthewBramley, Miguel Breceda, KeithCollins, Brian Kelly, Oliver Probst,

Bruce Rudy, Meredith Wingate, andLeslie Welsh. We also express ourgratitude to Hyacinth Billings, GayleCoolidge, Robert Livernash, andMaggie Powell for turning our draftpaper into a publication.

The authors give particular thanks tothe primary sponsor of this publica-tion, the U.S. Environmental Protec-tion Agency. The authors also thankall of those who have supported theGreen Power Market DevelopmentGroup over the past year includingThe Oak Foundation, The PewCharitable Trusts, and the S.C.Johnson Fund Inc.

In addition, the authors thank themany retail electricity providers,green power and REC providers, andproject developers with whom theGroup has engaged.

The authors alone are responsiblefor the views and perspectivesexpressed in this publication.


NOTES

Colorado: National Renewable EnergyLaboratory.

11.Regional pricing disparities for RECs alsomight be due to differences in the marketrate for conventional power. The minimumaverage price for a REC is typically the costdifference between generating power fromrenewable resources relative to the marketrate for conventional power. In theory,therefore, RECs from generators located inregions with high conventional power ratescould be inexpensive. However, most ofthese regions in the U.S. (such as theNortheast) include states with renewableportfolio standards (RPS); that is, govern-ment requirements that a certain percentageof the state’s power supply must come fromrenewable resources. In many of these RPSstates, there is an undersupply of renewableenergy generation relative to mandateddemand and thus high REC prices.

12.Of course, a utility in the Great Plains maynot need to source RECs nationally inorder to be able to provide a low-cost windpower product, since the best windresources are nearby.

13.Although green power using nationallysourced RECs may be attractive for thevoluntary market, it may not be eligible formandatory markets; that is, green powerused to satisfy state renewable portfoliostandards or “RPS.” Retail electricityproviders should review state RPSguidelines to determine if there aregeographic limitations on green power orREC eligibility.

14.Green-e® is the nation’s first voluntarycertification and verification program forrenewable electricity products. Since 1997,Green-e® has been a nationally recognizedcertification program to help consumersidentify green power and RECs that meetstrict environmental and consumerprotection standards. For more informa-tion, visit http://www.resource-solutions.org. Industry observers generallyagree that Green-e® certified RECscomprise at least 90 percent of all un-bundled REC sales in the voluntary U.S.market.

15.Center for Resource Solutions. 2004, 2003,2002. Green-e Verification Reports. SanFrancisco, CA: Center for ResourceSolutions.

16.For more information about the advantagesto corporate customers of purchasing

unbundled RECs, see Hanson, C. and V.Van Son. 2003. Renewable EnergyCertificates: An Attractive Means forCorporate Customers to PurchaseRenewable Energy. Washington, D.C.:World Resources Institute.

17.A factor underlying these flat Green-e®

certified green power sales figures is thatCalifornia terminated its customer creditsfor renewable energy purchases in early2003. Center for Resource Solutions. 2004,2003, 2002. Green-e Verification Reports.San Francisco, CA: Center for ResourceSolutions. (The Center for ResourceSolutions did not track REC sales for2001.)

18.A list of wholesale REC marketers andbrokers can be found at http://www.eere.energy.gov/greenpower/markets/certificates.shtml?page=2

19.For an example of this arrangement, seehttp://www.sterlingplanet.com/utilityPartners.php

20.Hamrin, Jan. Center for ResourceSolutions, personal communication,October 28, 2004.

21.In some situations, 10,000 MWh per yearof green power demand can be a sufficientvolume for encouraging electricity providersto design a new product.

22.For instance, Canada exports 7–9 percentof its electricity generation to the U.S.National Energy Board. 2003. CanadianElectricity Exports and Imports. Calgary,Alberta: National Energy Board.

23.For more details, see Hamrin, J., M.Wingate, and L. Campbell. 2003. ThePotential for Using a Renewable EnergyCertificate System to Encourage RenewableEnergy Development in Mexico. SanFrancisco, CA: Center for ResourceSolutions.

24.The cost of electricity from landfill gas orbiomass can behave in the same manner ifthe generator has long-term fixed-pricecontracts for these fuels.

25.Energy Information Administration. 2004.July 2004 Monthly Energy Review.Washington, DC: Energy InformationAdministration. Available at:http://tonto.eia.doe.gov/dnav/ng/hist/n3035us3m.htm.

26.Global Insight. 2003. Perspectives on aU.S. Natural Gas “Shortage”. Lexington,MA: Global Insight. Available at: http://

1. The term “green power” is used in themarketplace in a number of different ways.Sometimes “green power” refers toenvironmentally preferable energy andenergy technologies, both electric andthermal. In this Corporate Guide, the term“green power” refers solely to electricityfrom renewable resources.

2. Landfill gas is a mixture of methane, carbondioxide, and trace gases that is releasedwhen organic materials (e.g., yardtrimmings, food) decay in landfills. It canbe captured and burned as a fuel togenerate either heat or electricity.

3. Also commonly called a “load-servingentity” (“LSE”) or “electric generationsupplier” (“EGS”) in some states.

4. RECs have several alternative names,including certificates, green tags, greencertificates, green tickets, renewable energycredits, and tradable renewable certificates.For more discussion of RECs and RECmarkets, see Hanson, C. and V. Van Son.2003. Renewable Energy Certificates: AnAttractive Means for Corporate Customersto Purchase Renewable Energy. Washing-ton, D.C.: World Resources Institute.

5. Bird, Lori. National Renewable EnergyLaboratory, personal communication,August 5, 2004.

6. Bird, Lori. National Renewable EnergyLaboratory, personal communication,August 5, 2004.

7. Rudy, Bruce. Green Mountain Energy,personal communication, August 5, 2004.Data on green power sales in deregulatedmarkets is not publicly available.

8. Data on green power premiums are fromthe U.S. Department of Energy, 2004.Summary of Green Pricing Programs andCompetitive Electricity Markets. Availableonline at: http://www.eere.energy.gov/greenpower/markets/. Accessed July 5,2004.

9. Friedman, B. 2003. “Making the C&I Sale:Targeting Businesses and Helping ThemOver the Fence.” Paper presented at theEighth National Green Power MarketingConference, Chicago, Illinois, November 4,2003.

10.In regulated electricity markets. Participa-tion rate figures not available for deregu-lated markets. Source: Bird, L., B. Swezey,and J. Aabakken. 2004. Utility GreenPricing Programs: Design, Implementation,and Consumer Response. Golden,


www.globalinsight.com/Highlight/HighlightDetail448.htm.

27.Bolinger, M., R. Wiser, and W. Golove.2003. Accounting for Fuel Price Risk:Using Forward Natural Gas Prices Insteadof Gas Price Forecasts to CompareRenewable to Natural Gas-Fired Genera-tion. Berkeley, CA: Lawrence BerkeleyNational Laboratory.

28.A CFD can be structured without transferof RECs (a “brown CFD”). Such a contractwould still support renewable powergeneration, but it would not give therenewable generator a guaranteed revenuestream for its RECs, nor would it allow theretail corporate customer to claim any ofthe positive environmental benefits from therenewable power.

29.A CFD can be structured for all types ofrenewable generation, includingdispatchable resources that are not affectedby intermittency (like wind power).Resources such as biomass have variablefuel costs, though, which would need to betaken into account. CFDs can also bestructured around non-renewable powergeneration such as coal, which, likebiomass, has variable fuel costs. One of theattractive aspects of a green CFD is thatsome renewable resources such as windhave no fuel costs and therefore havegreater potential for long-term coststabilization. Furthermore, the transfer ofRECs in a green CFD allows the retailconsumer to support green power.

30.Bolinger, M., R. Grace, D. Smith, and R.Wiser. 2003. Using Wind Power to HedgeVolatile Electricity Prices for Commercialand Industrial Customers in New York.Albany, NY: New York State EnergyResearch and Development Authority.

31.Energy Information Administration. 2004.Canada: Environmental Issues. Washington,DC: Energy Information Administration.Available at: http://www.eia.doe.gov/emeu/cabs/canenv.html#RENEWABLE.

32.Natural Resources Canada. 2000.Hydroelectric Energy Resource Assessment.Ottawa, Ontario: Natural ResourcesCanada. Available at: http://www.canren.gc.ca/resou_asse/index.asp?CaId=54&PgId=274.

33.Pollution Probe. 2002. Promoting GreenPower in Canada. Toronto, Ontario:Pollution Probe. Available at: http://www.pollutionprobe.org/Publications/Energy.html.

34.Pollution Probe. 2002. Promoting GreenPower in Canada. Toronto, Ontario:Pollution Probe. Available at: http://www.pollutionprobe.org/Publications/Energy.html.

35.Whitmore, J. and M. Bramley. 2004. GreenPower Programs in Canada - 2003.Drayton Valley, Alberta: Pembina Institute.


37.Based on a review of each retail electricityprovider’s green power program asdescribed on provider web sites.

38.Whitmore, J. and M. Bramley. 2004. GreenPower Programs in Canada - 2003.Drayton Valley, Alberta: Pembina Institute.Equivalent to 5.3 Canadian cents/kWh (53Canadian $/MWh). Assumes an exchangerate of 1.00 USD = 1.30 CAD.

39.Hydro Quebéc. 2003. Comparison ofElectricity Prices in Major North AmericanCities. Rates in effect May 1, 2003.Montreal, Quebéc: Hydro Quebéc.Available at: http://www.hydroquebec.com/publications/en/comparison_prices/2003/index.html.


41.For more details about Canada’s Environ-mental ChoiceTM Program, see http://www.environmentalchoice.ca.

42.Collins, Keith. Manitoba Ministry ofEnergy, personal communication, July 14,2004; Manitoba Hydro. 2004. EnergyRates.Available at: http://www.hydro.mb.ca/your_service/er_monthly_rates.shtml.

43.SaskPower. 2004. SaskPower RateProposal Summary. Available at: http://www.saskpower.com/Summary%20Rates.pdf.

44. Calculations based on: IndependentElectricity Market Operator. 2004. 10 YearAssessment: An Assessment of the Adequacyof Generation and Transmission Facilities toMeet Future Electricity Needs in Ontario.IMO REP0172v2.0. Toronto, Ontario:Independent Electricity Market Operator.Available at: http://www.theimo.com/imoweb/pubs/marketReports/10YearOutlook_2004mar.pdf.

45.Energy Information Administration. 2004.International Energy Outlook 2004.Washington, DC: Energy InformationAdministration. Available at: http://www.eia.doe.gov/oiaf/ieo/nat_gas.html.

46.Natural gas supply could stabilize in NorthAmerica with liquefied natural gas importsfrom overseas and new gas pipelinesconnecting the gas fields in Alaska and theNorthwest Territories. These new sources, ifdeveloped, may take years to impact themarket, however, and may be moreexpensive than existing sources.

47.National Energy Board. 2001. CanadianElectricity Trends and Issues. Calgary,Alberta: National Energy Board.

48.Energyshop.com. Undated. Electricity inCanada – Where are Prices Going?Richmond Hill, Ontario: Energyshop.com.Available at: http://www.energyshop.com/es/business/ele/direction.cfm?c.

49.National Energy Board. 2004. A Compen-dium of Electric Reliability FrameworksAcross Canada. Calgary, Alberta: NationalEnergy Board.

50.Independent Electricity Market Operator.2004. Market Year Review 2003-2004.Toronto, Ontario: Independent ElectricityMarket Operator. Available at: http://www.iemo.com/imoweb/marketdata/marketSummary.asp.

51.National Energy Board. 2001. CanadianElectricity Trends and Issues. Calgary,Alberta: National Energy Board.

52.Walkom, T. 2001. “Private power planspells public pain for Albertans.” The Star,April 1, 2001.

53.International Energy Agency (IEA). 2004.Energy Balances of OECD Countries,2002. Paris, France: IEA.

54.Secretaría de Energía. 2004. RenewableEnergies in Mexico. Mexico City, DF:Secretaría de Energía.

55.Including municipalities in Puebla,Morelos, and Hidalgo.

56.Secretaría de Energía. 2004. IndustriaEléctrica Mexicana. Mexico City, DF:Secretaría de Energía.

57.Mexican laws allows a private company or aconsortium of companies to generate powerfor their own use (self-supply or“autobastecimiento”). On-site renewablepower systems qualify as a means by whichcompanies can supply their own electricity.This publication will not address theseopportunities, but rather will focus on greenpower supplied by retail electricityproviders.

58.Breceda, Miguel. 2000. Debate on Reformof the Electricity Sector in Mexico.Montreal, Quebec: North AmericanCommission for Environmental Coopera-tion.



60.Shields, D. 2002. The Future of MexicanEnergy Reform. Presentation to the NinthBorder Energy Forum, Saltillo, Coahuila,Mexico. October 25, 2002.

61.North American Commission for Environ-mental Cooperation. 2001. Backgrounder:Market for Renewable Electricity inMexico’s Industries. Montreal, Quebec:North American Commission for Environ-mental Cooperation. Available at: http://www.cec.org/pubs_docs/documents/index.cfm?varlan=english&ID=373.

62.Friedman, B. 2003. Making the C&I Sale.Presented at the 8th National Green PowerMarketing Conference, Chicago, Illinois,November 4, 2003.

63.Secretaría de Energía. 2003. Prospectivadel sector eléctrico 2003-2012. MexicoCity, DF: Secretaría de Energía. Availableat: http://www.energia.gob.mx/wb/click.jsp?idelemento=539&idseccion=65&idtipoUsu=-1.

64.Secretaría de Energía. 2003. Prospectivadel sector eléctrico 2003-2012. MexicoCity, DF: Secretaría de Energía.

65.U.S. Department of Energy. 2003. AnEnergy Overview of Mexico. Washington,DC: U.S. DOE. Available at:http://www.fe.doe.gov/international/mexiover.html; Secretaría de Energía. 2003.Prospectiva del sector eléctrico 2003-2012.Mexico City, DF: Secretaría de Energía.

66.Secretaría de Energía. 2004. Renewablenergies in Mexico. Mexico City, DF:Secretaría de Energía.

67.Mexico has opportunities for power fromsolar, landfill gas, and biomass resources,but usually not to the scale of the otheroptions. In some situations, these resourcescould be attractive for on-site energyproduction systems. This publication,however, does not discuss on-site systems,but rather focuses on green power productssold by retail electricity suppliers.

68.For instance, the Ministry uses the TETCOand EPGT indices from the south of Texasas the reference for natural gas. Llamas, A.,F. Viramontes, O. Probst, R. Reyna, A.Morones, and M. Gonzalez. 2004. TheMexican Power Sector and Dependence onNatural Gas. Monterrey, NL: MonterreyInstitute of Technology.

69.Based on constant 2002 centavos per kWh.Secretaría de Energía. 2003. Prospectivadel sector eléctrico 2003–2012. MexicoCity, DF: Secretaría de Energía.

70.Reflects gross planned additions andtherefore excludes capacity reductions (e.g.,retirement of steam plants using fuel oil)and capacity additions for which the fueland technology have not yet been assigned.Secretaría de Energía. 2003. Prospectivadel sector eléctrico 2003–2012.

71.Secretaría de Energía. 2003. Prospectivadel sector eléctrico 2003–2012. MexicoCity, DF: Secretaría de Energía.


73.Secretaría de Energía. 2003. Natural gasmarket outlook 2003–2012. Mexico City,DF: Secretaría de Energía.

74.Secretaría de Energía. 2003. Natural gasmarket outlook 2003–2012. Mexico City,DF: Secretaría de Energía.

75.For more details, see Hamrin, J., M.Wingate, L. Campbell. 2003. The Potentialfor Using a Renewable Energy CertificateSystem to Encourage Renewable EnergyDevelopment in Mexico. San Francisco,CA: Center for Resource Solutions.


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