A Renewable Energy Certificate (REC) is a tradable form of energy, representing the environmental attributes associated with renewable energy generation. RECs can be bought and sold separately from energy and electricity, and can be used to help buyers meet their renewable energy goals.
The primary purpose of RECs is to provide financial incentives for renewable energy generation and help promote the development of the renewable energy industry. By purchasing RECs, buyers can support renewable energy projects and help reduce the environmental impacts of electricity production.
How Does a Renewable Energy Certificate Work?
When electricity is produced from a renewable energy source like wind, solar, geothermal, or hydropower, a REC is created. The REC represents all of the environmental attributes associated with the generation of one megawatt-hour (MWh) of electricity from a renewable energy source. Each REC is tracked and monitored by a trusted third-party and is uniquely identified.
Once a REC is created, it can be sold separately from the electricity generated from the renewable energy source. Buyers, such as businesses, organizations, and individuals, can then purchase RECs to meet their renewable energy goals. By purchasing RECs, buyers help support renewable energy projects and reduce the environmental impacts of electricity production.
Types of Renewable Energy Certificates
There are two main types of RECs: un-bundled and bundled. Un-bundled RECs are created when a renewable energy generator sells the environmental attributes associated with the renewable energy to a third-party. This third-party then sells the REC to a buyer. Bundled RECs are created when a renewable energy generator sells both the energy and the environmental attributes associated with the energy to a buyer.
In addition, there are also voluntary RECs and compliance RECs. Voluntary RECs are purchased by buyers who want to support renewable energy projects but are not required to do so by law. Compliance RECs, on the other hand, are purchased by buyers who are required to purchase a certain amount of renewable energy by law. Both types of RECs are tracked and monitored by a trusted third-party.
Benefits of Purchasing Renewable Energy Certificates
By purchasing RECs, buyers can support renewable energy projects and help reduce the environmental impacts of electricity production. Purchasing RECs can also help buyers meet their renewable energy goals. Additionally, RECs can provide a financial incentive for renewable energy generation and help promote the development of the renewable energy industry.
REC purchases can also help buyers reduce their carbon footprint. By purchasing RECs, buyers can offset the amount of carbon emissions associated with their electricity use. This helps reduce their overall carbon footprint and helps them meet their sustainability goals.
Conclusion
A Renewable Energy Certificate (REC) is a tradable form of energy, representing the environmental attributes associated with renewable energy generation. RECs can be bought and sold separately from energy and electricity, and can be used to help buyers meet their renewable energy goals. There are two main types of RECs: un-bundled and bundled. By purchasing RECs, buyers can support renewable energy projects and help reduce the environmental impacts of electricity production. Additionally, RECs can provide a financial incentive for renewable energy generation and help promote the development of the renewable energy industry.