CEP Renewable Energy Technologies & Integration 3

Question 1

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

Accepted Answer

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

Answer

The additional cost premium paid for renewable energy above market rates

Answer

The additional RECs purchased beyond a company's annual electricity consumption

Answer

The incremental grid upgrade costs triggered by a new renewable project

Question 2

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

Accepted Answer

FERC Order 2023

Answer

FERC Order 888

Answer

FERC Order 745

Answer

FERC Order 1000

Question 3

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?

Accepted 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

Answer

It determines the financial credit rating of the project developer

Answer

It sets the maximum PPA contract term allowable under FERC rules

Answer

It determines whether the project qualifies for the ITC or PTC

Question 4

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

Accepted 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

Answer

Nodal pricing applies only to renewable generators; zonal pricing applies to all generators

Answer

Nodal pricing is used only in regulated markets; zonal pricing is used only in deregulated markets

Answer

Nodal pricing reflects fuel costs only; zonal pricing incorporates transmission and congestion costs

Question 5

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

Accepted Answer

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

Answer

Interest rate risk on project debt

Answer

Currency risk from international equipment sourcing

Answer

Counterparty credit risk of the off-taker

Question 6

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

Accepted Answer

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

Answer

To swap fixed-price REC revenue for floating market REC prices

Answer

To transfer ownership of a renewable project between two corporate buyers

Answer

To exchange a project's production tax credits for investment tax credits

Question 7

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?

Accepted Answer

Direct pay (elective payment) election

Answer

Bonus depreciation acceleration

Answer

Master limited partnership (MLP) structure

Answer

Production tax credit transferability to a third party