GreenTech Energy Services is now working with EMC2 Development Company to provide our customers with the opportunity for an additional financial benefit for the energy improvements that they make. In addition to utility company rebates, grants, tax breaks and other incentives, our customers can now receive payments for the energy that will not be used as a result of energy efficiency improvements to their buildings.
This additional incentive is provided through a program established by PJM Interconnection, the market monitor that coordinates the movement of wholesale electricity through 13 states and the District of Columbia. EMC2 is permitted to participate in the program because it is a PJM Partner. Here’s how it works:
- GreenTech Energy Services works with EMC2 to see if a customer’s energy efficiency project meets the requirements for receiving this incentive.
- If a project qualifies, we calculate how much the saved energy, measured in kilowatts, is worth on the Energy Capacity Market. (See explanation of market below.)
- We send our customer a “Capacity Rewards Agreement” which states that EMC2 has their permission to bid the energy savings from the project into the Energy Capacity Market.
- After the customer signs and returns the agreement, EMC2 will bid the energy savings into the capacity market at auction and the customer is sent a portion of the proceeds.
This program is separate from utility rebates or state incentives for energy efficiency, and taking advantage of one does not preclude participation in the other. Together, these programs can improve the bottom line of energy efficiency projects, while promoting energy conservation.
How the capacity auction works: Each year, PJM holds a competitive auction to obtain sufficient electricity capacity where it is needed to reliably meet expected electricity demand three years into the future. Before each auction, PJM estimates peak electric usage for the entire region and provides bidders with this estimate. The auction works to ensure that there is enough capacity to meet that peak usage, plus a reserve margin. Bidders can bid in their existing power plants, new power plants, demand response, and energy efficiency. Their bid prices are based on the costs to have that resource available for that delivery year. In the auction, PJM stacks up the bids from lowest to highest in various grid zones. The price bid by the final resource that meets PJM’s target establishes the price paid to all resources in that zone. The capacity market serves to ensure that there are adequate resources to provide power to customers every day of the year.– Excerpt from PSE&G fact sheet