What are Renewable Energy Certificates (RECs)?
The environmental benefits of renewable energy is transferred to businesses and consumers through Renewable Energy Certificates (RECs). RECs are also referred to as Green Tags or Renewable Energy Credits. A REC represents the environmental benefits of producing 1,000 kWh (or one megawatt-hour) of electricity from a renewable energy source and the avoidance of the emission of approximately 1,400 pounds of carbon dioxide.
Renewable Energy Certificates (RECs) are created when a renewable energy facility generates electricity. Each unique certificate represents all of the environmental attributes or benefits of a specific quantity of renewable generation, namely the benefits that everyone receives when conventional fuels, such as coal, nuclear, oil, or gas, are displaced. What you pay for when you buy renewable energy certificates is the benefit of displacing other non-renewable sources from the electric grid. For more information about renewable energy certificates, please visit http://www.green-e.org/. When a renewable energy facility operates, it creates electricity that is delivered into a vast network of transmission wires, often referred to as the grid. The grid is segmented into regional power pools; in many cases these pools are not interconnected. To help facilitate the sale of renewable electricity nationally, a system was established that separates renewable electricity generation into two part
Renewable energy certificates (RECs) are a renewable energy product that companies can purchase to reduce the environmental impact of their business activities. A REC represents the environmental attributes – for example, avoided CO2 emissions – that are created when electricity is generated using renewable resources instead of using fossil fuel sources such as coal, oil, and natural gas. RECs can be sold separately from their associated electricity (see Figure 1) and thus enable customers to purchase the environmental attributes of renewable power generation independently of their retail power supply. Purchasing RECs, therefore, can be an effective means for a company to “green” the electricity it consumes. What do RECs provide? RECs provide many benefits to companies. They can help corporations: • Reduce corporate greenhouse gas emissions • Meet renewable energy targets • Strengthen customer and other stakeholder relations • Differentiate products and brands Advantages of RECs RECS c
