Renewable Energy Certificates (RECs): What You Need to Know
With the rising concern for climate change and sustainability, the increase in environmental, social and governance (ESG) considerations as well as the growing cost and demand of electricity, corporations all over the world are showing a great favour transitioning from conventional fossil fuel energy to renewable energy (RE).
Businesses all over the world are taking The Climate Pledge to achieve carbon reduction through various conducts, adopting energy efficient systems, using alternate energy sources, investing into RE projects and many more. However, many still find it impossible to fully reach carbon neutrality on their own.
The introduction of Renewable Energy Certificate (REC) is expected to bridge the gap, helping businesses to be powered by renewable energy without physically consuming it. For instance, every 1MWh of conventional energy consumed, businesses can purchase the same 1MWh of RE (represented by a REC) produced in another location. Using this framework, they can be 100% carbon neutral in their electricity consumption.
What is Renewable Energy Certificate (REC)?
REC is a type of Environmental Attribute Commodity (EAC) that represents the environmental benefits of generating one megawatt-hour (MWh) of electricity from a renewable energy source, such as solar, wind, hydroelectric power, biomass, or biogas. These RECs can be used to offset scope 2 emissions.
The production of 1MWh renewable energy is equivalent to 1 REC, and it is tracked and validated to ensure it is not double counted. RECs can be traded independently of the physical electricity.
Although RECs and electricity are generated from the same source at the same time, they are different products, with different markets. For instance, a corporate consumer consumes 1,000 MWh of electricity a year from Utility A where the energy source is from fossil fuels. Simultaneously, this corporate consumer can acquire 1,000 RECs to offset the equivalent amount of electricity consumed and achieve carbon neutrality. This works because when the corporate consumer buys the RECs for their own consumption, no one else has the right of claim to those RECs anymore since double counting of RECs is prohibited. When corporate consumers acquire RECs from RE project owners, it incentivises and supports the development of even more RE projects, Hence, even though the corporate consumer is not producing clean energy or not being physically powered by RE, they can claim to be running on 100% RE because of their support and investment towards RE projects.
Why Should RE Project Owners Register Their Assets with The Registry?
1. Generate Extra Revenue from Renewable Energy Projects with RECs
To create an additional revenue stream by selling the RECs generated from your RE projects in the open market. The revenue earned can be used to scale up even more RE investments and promote more RE capacity in the market.
2. Track and Verify Renewable Energy Generation
To prove the authenticity of the RECs generated from your RE projects. The registry serves as a platform for RE projects to be registered, while the standards/frameworks can track all RECs and verify the genuine of all the RE projects through the registry.
3. Promote Renewable Energy and Enable Corporate Sustainability
To contribute positive environmental impact through the sale of RECs generated from your RE projects. The supply of RECs into the market helps to meet the rising demand for sustainability, enabling other corporations to offset their carbon footprint and achieve carbon neutrality.
How Do RECs Work?
The diagram above demonstrates the process of RECs. RECs originate from the renewable energy generation through various sources like solar, wind, hydroelectric, biomass, or geothermal power stations. After the generation phase, the energy information will undergoes validation to confirm the generation details such as origin, geographic location, and timing, resulting in the issuance of one REC for each megawatt-hour produced.
Once verified by the Registry, RECs with unique serial numbers will be issued. By buying the RECs, corporate consumers claims the ownership of the green attributes of the generated RE. Upon claim for sustainability purposes, the retirement process will take place, removing RECs from the monitoring system. This action ensures transparency, prevents duplicate counting or excessive selling, and upholds the market’s credibility.
How Can Solarvest Help?
As a one-stop clean energy solutions provider, our mission is to mitigate the negative effects of climate change by supporting all parties to transition from consuming fossil fuel sources to renewable energy sources. Becoming carbon neutral is no simple task, hence, Solarvest are partnering with Saxon Renewables to provide end-to-end solutions that can cater to your needs.
If you’re an RE project owner, Solarvest can support you by registering your RE projects on the registry, issue, and then acquire those RECs generated from your projects at a competitive rate. This can be a yearly side revenue for your business.
If you’re a corporate consumer, Solarvest offers RECs from a variety of technologies, i.e. solar, hydro, biogas, biomass at a competitive rate to support you on your journey to being carbon neutral. We offer spot delivery and flexible payment terms. Moreover, if you own RE projects in your own facility and wish to self-consume the RECs that are generated, Solarvest provides RECs redemption services too.
Solarvest RECs solution offers:
Let’s take our first step towards promoting sustainability and transitioning towards using greener energy sources! To inquire more about RECs solution for your business, speak to our consultant here or call our hotline 1700-81-4611 to learn more.