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In its eighth year, the REC Market Meeting hosted its largest ever gathering of renewable energy market professionals in Amsterdam, 13th-14th March 2018. Natural Capital Partners’ Chief Product Officer Oliver Crouch reports on the key themes of the conference.
Bringing together more than 320 delegates including Microsoft, ING, CDP and the I-REC Standard, the increase in REC Market Meeting attendance among consumers, developers and other renewable energy market players was noticeable this year, and is a good reflection of the growing demand for renewable electricity around the world.
Three key themes stood out for me at this year’s event.
The impact of RE100
There are currently 130 members of RE100, each of them an influential business committed to procuring 100% of their electricity from renewable energy sources. This represents a 50% increase on 2016 membership and, backed by The Climate Group and CDP, the initiative is only set to grow. The collective demand for electricity by RE100 companies is now around 160 TWh, so if RE100 was a country, it would be the 24th largest in terms of electricity demand – similar to the size of Poland.
In the opening session of the conference, Pedro Faria, Technical Director at CDP, discussed how corporate leadership in the energy transition goes far beyond sustainability reporting. Energy consumers, particularly those in RE100, are becoming more informed participants in the renewable electricity market and are increasingly selective about where, when and how they power their operations.
Microsoft’s Renewable Energy Strategist, Vanessa Miler, presented the company’s energy strategy, which includes a target to source 60% from wind, solar and hydropower sources by 2020. Carbon Neutral since 2012, Microsoft has implemented an internal carbon fee to fund its low carbon initiatives. The company has already sourced 14 billion KWh renewable electricity, and is paying particular attention to addressing the growing energy demand from data centre and network services.
Demand for high quality renewable energy attribute certificates (EACs), and particularly for European Guarantees of Origin (GOs), has picked up significantly; the GO market increased over 28% between 2016 and 2017 and is now over 470 TWh. This is in part due to the influence of RE100 companies, but also the many thousands of small and medium sized business who are making a conscious choice to consume renewable electricity.
The latest Association of Issuing Bodies (AIB) statistics show that the growth in European renewables supply has not kept pace with the rapid growth in demand. This shifting supply and demand dynamic has caused GO prices to more than double in a relatively short period of time. In previous years, the GO market was over-supplied. With this trend now reversed, advice to companies is to accelerate purchasing decisions to cover this year’s electricity consumption.
The growth of the International REC (I-REC) Standard
The I-REC market posted solid growth in 2017 to reach nearly 4 TWh. The European and North American renewable electricity attribute markets are longer-established and therefore larger, however, it is predicted that I-REC volumes will continue to increase rapidly, particularly in the Middle East, South America and South-East Asia.
I-REC held its advisory group meeting at the REC Market Meeting and, similar to the main conference, the room was full of new stakeholders, including the local I-REC Issuers from Israel, Brazil and UAE. A key objective for the I-REC Standard in 2018 is to identify and establish more entities to act as local I-REC Issuers across the 21 countries in which the tracking system currently operates.
EAC markets beyond electricity: green gas
REC Market Meeting delegates identified the need for a standardised European market as consumer demand grows for affordable and sustainable green gas. Originally established to track renewable electricity, EACs are now gaining traction in the gas market as a way to track the consumption of renewable gas. Biomethane, also known as green gas, enables businesses to manage their scope 1 emissions with an EAC in exactly the same way as they manage their scope 2 emissions with a GO.
Biomethane tracking systems are currently operational in a number of European markets including the UK, where the certificate is called a Renewable Gas Guarantees of Origin (RGGO). UK RGGOs are beginning to manage scope 1 emissions across Europe via the extensively interconnected European gas grid. A central theme of the conference was the need for reliability of EAC systems, and, endorsed by CDP, the GHG Protocol and The CarbonNeutral Protocol, the RGGO market is already robust and credible, paving the way for further market growth.
Watch our webinar to find out more: Integrating Green Gas Into Your Renewable Energy Strategy.