Markets are either well-developed or developing for each of the 'products' produced by wind generators. These include electricity products and generation attributes.
Electricity can be used in two ways: on-site (interconnected behind a retail customer's meter) of for sales of electricity over the electric grid.
- On-site generation can displace a portion of a customer's purchases of electricity from the grid. In addition, net metering rules are in place at the state level that in some cases allow generation in excess of on-site load to be sold back to the local utility (see state pages for net metering specifics).
- For sales over the electricity grid, the Independent System Operator of New England (ISO New England) creates and manages a wholesale market for electric energy, capacity, and ancillary services within the New England Power Pool (NEPOOL). Wind generators may sell their electric energy and capacity in spot markets organized by the ISO, or they may contract with wholesale buyers to sell these products for any term to buyers operating in the ISO New England marketplace. Wind generators do not generally produce other marketable ancillary services. The ISO has rules specific to the operation of wind generators reflecting operations, scheduling, calculation of installed capacity credit, and so forth.
Generation attributes are descriptive or performance characteristics of each unit of energy produced by a particular generator. They can include inherent and directly descriptive attributes such as the generation technology, fuel source, location of plant, time of generation, and actual emissions rates (if any). Zero emission wind generators have additional attributes reflecting indirect or derived benefits caused by introducing the generator to the power system. These could include displaced emissions or tradable property rights such as emission allowances or emission reduction credits that may be created for various emissions under state or regional emission "cap-and-trade" or similar programs.
- Renewable Energy Certificates (RECs), also known as green certificates, green tags, or tradable renewable certificates, are terms used to describe the embodiment of rights to generation attributes that can be bought and sold separately from electricity service or together with electricity as "green power". NEPOOL has created a system for accounting for and tracking rights to such attributes: the NEPOOL Generation Information System (GIS), and for renewable generators in New England, GIS Certificates are wind power RECs. Sellers of wind electricity or those using wind to comply with various regional mandates must also possess the associated NEPOOL GIS Certificates in their GIS account.
- NEPOOL Generation Information System (GIS) provides information on the accounting system, various public reports, state laws and regulations that rely on GIS Certificates for compliance (attribute laws), and brokers of GIS Certificates.
- Some brokers maintain spot and future market prices for GIS Certificates eligible for various compliance and voluntary markets, including Natsource and Evolution Markets LLC.
- Emissions Markets are a tool used on a state, regional, national, or global basis to limit emissions of various pollutants and greenhouse gases. Several programs are in place or being developed that apply to electric generation sources in New England. In some of these programs, a wind generator can apply for and receive a form of tradable emission rights in recognition of emissions a wind generator displaces on the system; in others they cannot directly participate in programs limited to emitters (such as the Federal SO2 program). For more information, see:
- Alternative or Supplementary Revenue Sources. In the event a wind generator is allowed to receive tradable emission rights under an emission program, in most cases the generator would have to decide between selling RECs or emission rights as alternative revenue streams. This is because compliance with state mandates may require that benefits not be sold off elsewhere, emission cap-and-trade programs usually operate on the premise of additionality (reductions above and beyond what would have happened in the absence of the program), and voluntary buyers of RECs in most cases expect to claim the emission benefits. However, cases may exist in which RECS and tradable emission rights may become supplementary revenue streams (for instance, when compliance with a mandate requires retirement of RECs without reference to the disposition of emission rights). As emissions programs and markets evolve, the interaction between these two markets will by necessity become clearer.