Mark Twain’s famous line was slightly adjusted during the recent Renewable Energy Markets (REM) conference in New York. “The reports of the death of the REC are greatly exaggerated,” stated Mark LaCroix, Executive Vice President Americas at Natural Capital Partners. And the most recent report from the US National Renewable Energy Laboratory (NREL) supports his view.

Energy Attribute Certificates are Alive, and are Very Much Needed

The report finds that unbundled Renewable Energy Certificate sales (RECs sold separately to the physical electricity) grew by 22% in 2016, primarily due to an increase in corporate renewable energy procurement. In fact, out of 95.45 million MWh of renewable energy sold in the U.S. in 2016, 51.8 million MWh was through unbundled RECs[1]. Energy Attribute Certificates (EACs), which include U.S. Renewable Energy Certificates (RECs), European Guarantees of Origin (GOs) and International RECs (I-RECs), continue to be favoured by RE100 member companies, with 85% of U.S. based companies and 60% of companies with operations across the rest of the world using them to achieve their renewable energy goals[2].

Presenters at both the Renewable Energy Buyers Alliance (REBA) meeting in California and REM emphasised that EACs are not only essential to credible claims of renewable energy sourcing, but are creating thriving markets for renewable energy across the globe.

A panel at REM 2017 entitled Obstacles and Opportunities in Global Renewable Energy Procurement, debated the role EACs can play in helping corporates meet their goals. “Without energy attribute certificates, we do not have renewable energy markets,” Mark emphasised. “EACs ensure that electricity sourcing claims are robust, trackable and credible.”

But with renewable energy sourcing options growing, how do companies make the right choice? Marty Sedler, Director of Global Utilities and Infrastructure at multinational technology company Intel, stressed the need for a portfolio approach. Intel cannot cover its load in the U.S. with solar PPAs, as that would require the company to build tens of thousands of acres of solar arrays. Marty stated that it is important for a business to set a renewable energy goal in order to know what success looks like. He emphasised that there is more than one way to reach that goal, and for Intel, unbundled RECs are part of the approach.

Intel has 77 onsite renewable energy generators which power a proportion of the company’s operations in countries around the world. However, onsite generation and PPAs are not currently feasible in all the countries where Intel operates for various political, financial or physical reasons. By bringing its demand to emerging economies by purchasing EACs, Intel is helping to establish and develop the tracking systems required for healthy, credible and transparent renewable energy markets. In this way, large companies such as Intel are paving the way for other companies to source renewable energy in new locations.

Orrin Cook, Green-e Marketplace Manager for Center of Resource Solutions (CRS), presented on the same panel and explained how the global renewable energy market has developed to feed a growing demand. There are now around 15 ways to procure energy produced by renewable sources such as solar and wind, including onsite generation, green tariffs, long-term Power Purchase Agreements (PPAs), and unbundled EACs. EACs are required to ensure that renewable electricity has not been claimed more than once, and are part of quality assurance measures underpinning many of these sourcing options.

The primary EAC in markets outside of Europe and the U.S. is the I-REC, which is expected to reach 5 TW of issuance this year. Natural Capital Partners has facilitated the development of more than 15 I-REC projects in countries such as Brazil, China and the Philippines, to respond to clients’ needs to power international operations with renewable energy.

But what does an ideal renewable energy market look like, and what role can companies play in creating it? Mark LaCroix stated that it has a lot to do with policy. “Policy makers need to address the needs of voluntary buyers when creating incentives and markets,” he said. “And it pays for companies to get into these markets early by purchasing EACs, so that they’re there when other sourcing methods become available, and so that they have a voice.”

So perhaps the ideal renewable energy market is one that provides multiple sourcing options, enabling businesses to optimise their purchases across locations and technologies. EACs offer a flexible, cost-effective way for companies to achieve their renewable energy targets, and with corporate purchasing increasing, it’s clear that RECs, GOs, I-RECs and other EACs are alive, well, and are increasingly available.

 

 

[1] Status and Trends in the U.S. Voluntary Green Power Market (2016 Data), NREL, 2017. Available at: https://www.nrel.gov/docs/fy18osti/70174.pdf

[2] Accelerating Change: How Corporate Users are Transforming the Renewable Energy market, RE100, 2017. Available at: http://media.virbcdn.com/files/a9/55845b630b54f906-RE100AnnualReport2017.pdf