Zero-emissions credit (ZEC)

There are generation technologies other than renewable generation that can provide energy without emissions. To recognize these, some states have created zero-emissions credits or ZECs, which are similar to renewable energy credits (RECs). A ZEC is a tradeable financial instrument that allows the owner of a zero-emissions electric generating plant to receive revenue associated with the zero-emissions attribute of its electric production.

To date, ZECs have created a revenue stream for nuclear power plants to provide revenue in addition to earnings in energy and capacity markets. They are used in states where policy makers are concerned that nuclear units without sufficient revenues will be closed, thus resulting in more fossil fuel-based generation and an increase in greenhouse gas and other emissions. 

For example, upon initiating its program in 2017, New York paid qualified owners of nuclear generation $17.48 per MWh. The cost to the state was then reallocated to load-serving entities (LSEs) pro rata based on the amount of energy sold by the LSE. Other states that have implemented ZECs as of 2021 include Connecticut, Illinois, New Jersey, and Ohio.