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Fuelled by corporate ambition and demand for high quality renewable energy around the world, the RECs Market Meeting in March highlighted the importance of strategies built on portfolios of projects which use quality renewable energy instruments as the foundation.
H&M, Intel, AstraZeneca and P&G were among the attending companies committed to sourcing 100% renewable electricity. Head of RE100, Sam Kimmins, emphasised at the meeting that unbundled instruments are the main tool used by RE100 companies. 60% of companies globally and 85% in the US, purchase renewable electricity instruments in the form of Renewable Energy Certificates (RECs), Guarantees of Origin (GOs) and International-RECs (I-RECs) to achieve their goals.
“This year, it was inspiring to experience the growth in confidence among the businesses at the RECs Market Meeting,” commented Natural Capital Partners’ European Managing Director, Simon Brown. “These companies have made commitments to a complete transition to renewable electricity. There was plenty of innovative solutions in the room as the supply side steps up to the challenge. Corporates are looking for simple, high quality, reportable solutions that meet the call to action from organisations such as RE100, WWF, WRI and We Mean Business.”
The key themes of the conference for business consumers are described below.
Businesses need to build a portfolio of solutions
There was recognition at the meeting of the continued growth of renewable energy strategies which include high quality renewable energy tracking instruments, which underpin all grid-connected solutions including Power Purchase Agreements (PPAs) and green tariffs. Marty Sedler, Director of Global Utilities and Infrastructure at Intel, emphasised that there is no silver bullet in renewable energy, but whichever choices a business makes, the products in their portfolio need to be credible, validated and supported by opinion leaders.
Even if the ultimate goal is an onsite solar array, instruments enable companies of all sizes to cost-effectively meet their targets in the geographies most important to them, where there may not currently be the infrastructure for alternative renewable energy options. In addition, instruments enable the development of tracking systems in emerging markets which are critical to increasing renewable energy options for all businesses.
The growth in supply and use of the I-REC Standard is gaining momentum
The I-REC tracking system was frequently discussed at the meeting as the leading instrument for corporates looking to achieve renewable energy goals in markets beyond Europe and North America. In 2016, the Standard issued in excess of 1.7 million MWh and year-to-date 2017 volumes are significantly ahead of the same period in 2016. Natural Capital Partners has been at the forefront of creating renewable energy solutions for businesses with global requirements and is working with projects on the ground to supply I-RECs from a growing number of countries. Watch this video to learn more about the work we are doing to expand renewable energy options around the world.
I-REC issuers are now authorised in 17 countries. The Philippines, Brazil and Guatemala are the most recent markets to join the I-REC system while a local issuer has been engaged in the United Arab Emirates. Appointing more issuers will be a key focus for the I-REC Standard in 2017, as will understanding emerging national renewable energy certificate schemes, such as the recently announced Chinese Green Certificate Scheme. Natural Capital Partners is part of the I-REC Chinese National Team that will be helping to understand and evaluate these developments during the coming months.
Pursuit of quality and differentiation in renewable energy
Multinational organisations are increasing the scale, quality and impact of their renewable energy purchases and are using portfolios of instruments, including GOs, RECs and I-RECs, as part of their solution. Whether bundled in a tariff or PPA, or unbundled, the quality of the instrument is critical to ensure the credibility of corporate claims.
Companies can set their strategies for renewable energy with clear selection criteria, using instruments from around the world that reflect their preference for location, technology, vintage, and the age of the power plant. Sourcing instruments from within the same market as electricity is consumed is best practice as defined by the Greenhouse Gas Protocol Scope 2 Guidance. Several speakers from corporates expressed the desire to select local sources from within the same country or, in the case of larger countries, from the same electricity grid. This desire for local solutions is a trend we expect to accelerate throughout 2017.
Renewable energy instrument ecolabels, EKOenergy and Green-e Energy, were highlighted as the top standards for quality in renewable energy purchases. EKOenergy also guarantees that a part of the finance from each purchase funds new projects. The discussions about how a renewable energy buyer might be able to claim that their purchase directly generated new capacity – additionality – continue, and a clear definition of additionality for the renewable energy sector will become more important as companies look to have a greater impact with the purchases they make.
As confidence in the renewable electricity market grows, so does ambition: Nigel Topping of We Mean Business stated that we are now in a “phase of upward ambition.” The demand for high quality renewable energy solutions from multinational businesses such as H&M is driving this energy transition - read more about H&M’s renewable energy achievements here. Renewable energy instruments deliver an immediate, effective solution to meet the specific requirements of a business, which is boosting the number of companies achieving 100% renewable energy sourcing.
For more information on the options available to companies wishing to source renewable energy, visit our renewable energy solutions page here or contact Simon Brown – firstname.lastname@example.org for Europe and Asia Pacific or Mark LaCroix – email@example.com for North and South America.