Why Are Renewable Energy Certificates Important?
Electricity that is produced by renewable energy projects is fed into the grid. Once it enters the grid, it becomes indistinguishable from the energy generated by other sources such as traditional coal power plants. The electricity is the same no matter how it is produced.
RECs, or Renewable Energy Certificates, were created in order to track the production of energy from renewable sources. RECs are environmental attribute commodities that certify the electricity generated comes from a renewable source, such as solar, wind, or hydroelectric power.
For every MWh of renewable energy produced, 1 REC is created. RECs can be sold in the open market to corporate consumers, and the owner of RECs can then claim to be powering their facility with the corresponding amount of renewable energy that the RECs represent, regardless of whether they are actually using renewable sources.
Here are 5 benefits of RECs that support a cleaner future:
1. Reduce Environmental Impact
One benefit of acquiring RECs is that they count towards offsetting a corporation’s carbon emissions, specifically their Scope 2 emissions, which are emissions from the generation of purchased electricity, steam, heating, or cooling consumed by the corporation. Moreover, RECs will likely to influence public opinion in supporting efforts to combat climate change and reduce carbon footprints.
2. Sustainability Commitment
RECs allow corporations to become more environmentally responsible, especially in the face of growing concerns towards climate change. They also offer flexibility in achieving sustainability goals, including Environmental, Social and Governance (ESG) criteria, enabling companies to support the transition from using fossil fuel to renewable energy sources.
3. Promote Renewable Energy Development
Acquiring RECs support the development of renewable energy projects. When corporate consumers purchase RECs, they provide revenue that aidsthe development and expansion of renewable energy projects. This helps increase the demand for renewable energy, encouraging more production from the project owners.
4. Increase Renewable Energy Adoption
RECs also make renewable energy more accessible. One barrier many corporations face is the large upfront cost of installing physical infrastructure. With RECs, corporate consumers can access renewable energy without having to overcome that obstacle. This encourages more corporations to adopt green energy as their primary energy source.
5. Flexibility In Renewable Energy Market
Renewable Energy Certificates (RECs) provide the flexibility in supporting the renewable energy sector, even if you can’t to generate it yourself or if your local utility doesn’t offer green power products. They help businesses and consumers support green energy without directly producing it. This flexibility enables companies to meet renewable energy mandates and sustainability goals by purchasing RECs, allowing them adapt quickly to regulatory changes and market conditions. Small businesses and consumers benefit from renewable energy without significant upfront installation costs.
In conclusion, the creation of RECs has greatly supported the development of renewable energy projects and the accessibility of renewable energy sources. The sale of RECs incentivises renewable project owners to scale up their capacity, while the purchasing of RECs enables corporate consumers to stay on track to achieve carbon neutrality and meet their sustainability goals. Both renewable energy project owners and corporate consumers benefit from this concept.