Renewable Energy Technologies & Integration Flashcards

What does 'additionality' mean in the context of corporate renewable energy procurement?

Answer: The principle that the procurement directly causes new renewable capacity to be built that would not otherwise exist

Additionality means the corporate buyer's procurement decision is directly responsible for bringing new renewable generation onto the grid, rather than simply claiming credit for existing generation.

Which FERC order significantly reformed the interconnection process to reduce backlogs and accelerate renewable project development?

Answer: FERC Order 2023

FERC Order 2023 (2023) overhauled the generator interconnection process by moving from a first-come, first-served serial queue to a first-ready, first-served cluster study approach to reduce backlogs.

What is the primary role of a project's capacity factor in determining the size of a solar PPA needed to meet a corporate sustainability target?

Answer: It determines how much nameplate capacity is needed to deliver a target annual MWh volume, since actual output is a fraction of rated capacity

Because a solar project's actual annual generation equals nameplate capacity multiplied by the capacity factor, buyers must size the contracted MW to account for the project's capacity factor to hit their MWh target.

Which of the following best describes a 'nodal' vs. 'zonal' pricing structure in wholesale electricity markets?

Answer: Nodal pricing sets a unique locational marginal price (LMP) at each bus on the grid; zonal pricing averages prices across a broader geographic area

Nodal pricing (LMP) calculates a specific price at each individual node or bus, incorporating energy, congestion, and losses; zonal pricing averages these signals over a broader region.

An energy procurement professional is evaluating a wind project in a constrained transmission corridor. Which risk is most important to quantify?

Answer: Basis risk from locational price differences between the project node and the buyer's settlement point

In a constrained transmission corridor, the project's nodal price can be significantly lower than hub prices due to congestion charges, creating basis risk that reduces the effective economics of the PPA for the buyer.

What is the purpose of a 'proxy revenue swap' in renewable energy procurement?

Answer: To convert the variable merchant revenue of a renewable project into a predictable fixed-price equivalent, reducing project revenue risk

A proxy revenue swap is a financial hedge that replaces unpredictable merchant revenues with a fixed payment stream, providing revenue certainty that supports project financing without a traditional PPA.

Under the Inflation Reduction Act (IRA) of 2022, which provision allows non-taxable entities such as nonprofits and municipalities to directly monetize clean energy tax credits?

Answer: Direct pay (elective payment) election

The IRA introduced a direct pay election that allows tax-exempt entities to receive a cash payment equal to the value of eligible clean energy tax credits, making federal incentives accessible without a tax equity partner.