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Utility-Scale Renewable Energy Projects
As defined by the Illinois Power Agency (IPA) Act and Public Utilities Act, the Illinois Power Agency is responsible for conducting competitive procurements to secure indexed Renewable Energy Credits (Indexed RECs) that support the development of new renewable energy resources across the state, in alignment with the state’s Renewable Portfolio Standard (RPS) goals. This includes the procurement of Indexed RECs from new utility-scale wind projects (projects over 5 MW), new utility-scale solar projects (projects over 5 MW), new brownfield site photovoltaic projects, and new hydropower projects at an existing dam or modernized or retooled hydropower projects at an existing dam.
These utility-scale projects are much larger than rooftop solar systems on homes or businesses. They can cover hundreds or even thousands of acres similar in size to traditional power plants, but without the emissions.
By bringing more utility-scale renewable energy projects online, Illinois moves closer to a reliable, affordable, and sustainable clean energy future.
Quick Links
- Long-Term Renewable Resources Procurement Plan web page (see Chapters 4-5 of Long-Term Plan)
- Procurement Results
- Minimum Equity Standard
- Procurement Administrator website: Indexed Renewables | Calendar | Results
- Downstream Negotiation for Indexed REC Contracts
- Clean Energy Dashboard: Competitive Procurements
- Fact Sheet: Renewable Energy Credits (RECs)
- Power Hour: From Brownfield to Brightfield
- Power Hour: The State of Wind Energy
Procurement Administrator
IPA competitive procurement events are run by a third-party Procurement Administrator, NERA Economic Consulting.
Procurement Process
For a utility-scale project to participate in the IPA’s procurement events, it must:
1. Be over 5 MW in size.
2. Be located in Illinois, or if in an adjacent state, meet a set of public interest criteria and fulfill project maturity requirements.
To meet its procurement targets, the IPA along with its Procurement Administrator, runs competitive procurement events twice a year to procure RECs from utility-scale wind, utility-scale solar, brownfield site photovoltaic and new or retooled hydropower facilities. The Procurement Administrator ensures the competitive bidding process is fair and consistent with Illinois law.
Under these procurement events, developers submit bids to sell RECs from their proposed projects under a 20-year contract. These contracts use an Indexed REC pricing structure established under the Climate and Equitable Jobs Act (CEJA) in 2021 to calculate the price of the RECs. To participate, projects must meet the Minimum Equity Standard and related reporting requirements.
Bidders submit the quantity of RECs that they are willing to contract and a strike price as part of their bid. The strike price is a fixed price in $/MWh over the 20-year term. The actual price for RECs from each project is calculated each month as the difference (positive or negative) between that strike price and the wholesale market’s price of electricity for the month. This “index” approach helps balance project revenues with changing market conditions.
The Procurement Administrator sets confidential benchmarks for each technology and reviews all bids against respective confidential benchmarks to ensure competitiveness and fairness. Eligible bids are evaluated by the Administrator, and the results are approved by the ICC. The resulting contracts mimic a bundled energy and REC contract, providing revenue certainty that underpins the project’s development and provides a valuable hedge against energy price volatility. After a project is selected in a procurement, it typically takes several years to build and begin operation.
To learn about past, current, and future procurement events, please visit the Procurement Administrator website.