In past blog posts, we’ve touched on the definitions for and impacts of both capacity and RECs on the price of electric. Both components which help to make up the overall price of energy, have increased to a point where they now account for a substantial portion of the total cost.
Over the past few months in the New England region specifically, we have seen an increase in the percentage that RECs and capacity contribute to the overall energy price. As you can see from the graphs below, in a six month period from January 2015 to June 2015, the forward 12 month pricing estimate for the percentage of total cost that capacity will contribute has increased from 8% to 10%. Even more shocking, the contribution that RECs will be attributed for has risen from 9% to 19%.
Expectations are that these percentages will continue to increase as we move forward in time. Exploring options such as energy conservation products, solar energy and demand side management programs are all effective tools in helping to offset these costs.