In the United States, a Renewable Energy Certificate (REC) represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a qualifying renewable energy resource. One REC is equal to one MWh of electricity generated and delivered to the grid from a renewable resource.
Renewable energy certificates are created as a way to encourage investment in renewable energy resources, and to allow utilities and other electricity providers to meet renewable energy goals. RECs can be bought and sold separate from the underlying electricity commodity, and they are tradable in both voluntary and compliance markets.
The environmental attributes associated with a REC depend on the renewable energy resource used to generate the electricity. For example, RECs from wind energy generation represent the renewable energy, environmental, and public health benefits of wind power, including the displacement of conventional pollutants such as sulfur dioxide, nitrogen oxides, and carbon dioxide. How many types of renewable certificates are there? In the United States, there are three types of renewable energy certificates (RECs):
1) Renewable Electricity Certificate (REC): Also known as a green tag, renewable energy certificate, or tradable renewable certificate, a REC represents the environmental attributes of 1 megawatt-hour (MWh) of electricity generated from a renewable energy resource.
2) Solar Renewable Energy Certificate (SREC): A Solar Renewable Energy Certificate (SREC) represents the environmental attributes of 1 megawatt-hour (MWh) of electricity generated from a solar energy resource.
3) Wind Renewable Energy Certificate (WREC): A Wind Renewable Energy Certificate (WREC) represents the environmental attributes of 1 megawatt-hour (MWh) of electricity generated from a wind energy resource.
How are RECs measured?
REC (renewable energy certificate) tracking systems measure the attributes of renewable electricity generation and deliver those attributes to the owners of the renewable generation. The attributes measured include the quantity (in MWh) and vintage of renewable electricity generation, as well as any other associated environmental benefits (e.g., avoided emissions of carbon dioxide).
The REC tracking system assigns each unit of renewable electricity generation (e.g., 1 MWh) a unique identifier, which is then used to track and transfer the associated attributes. The tracking system also provides a public registry of all RECs that have been issued, which can be used to verify ownership and ensure that the RECs have not been used or sold more than once.
There are a number of different REC tracking systems in operation around the world, each with its own rules and procedures. The two largest REC tracking systems in the United States are the Interstate Renewable Energy Council (IREC) Standard and the Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS). What are RECs called in Europe? In Europe, RECs are called Guarantees of Origin (GOs). GOs are issued by the authorities in the country of origin and guarantee that the electricity was produced from renewable energy sources. Do RECs expire? No, RECs do not expire.
How are renewable energy certificates traded?
Renewable energy certificates (RECs), also known as renewable energy credits, are tradable environmental commodities in the United States that represent proof that one megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource. RECs are often used by utilities and other entities to meet regulatory requirements, such as state Renewable Portfolio Standards (RPS).
RECs can be traded on both voluntary and compliance markets. The voluntary market is made up of individuals and businesses that choose to purchase RECs to offset their own electricity use with renewable energy. The compliance market is made up of utilities and other entities that are required to purchase RECs to meet regulatory requirements.
Purchasers of RECs typically pay a premium above the market price of electricity to support the development of new renewable energy projects. The price of RECs varies depending on the renewable energy resource, the region where the project is located, the vintage of the REC (i.e., when it was generated), and other factors.
RECs are typically traded through online platforms or through brokers. The most common type of REC is the renewable energy attribute credit or RECA, which represents the environmental attributes of one MWh of electricity generated from a specific renewable resource. Other types of RECs include renewable energy source credits (RESCs), which represent the physical attributes of one MWh of electricity generated from a specific renewable resource, and renewable energy production credits (REPCs), which represent the actual production of one MWh of electricity from a specific renewable resource.