Renewable Energy Certificates
Renewable Energy Certificate (REC) trading is a market-based system that enables businesses and organizations to meet renewable energy goals by purchasing certificates that represent the environmental benefits of generating renewable energy. Each REC corresponds to one megawatt-hour (MWh) of renewable electricity produced and can be bought, sold, or traded in regulated markets, helping to support the growth of renewable energy sources. The trading of RECs allows entities to fulfill renewable energy mandates or demonstrate their commitment to sustainability while promoting the development of clean energy infrastructure.
Compliance RECs
When a state passes a renewable portfolio standard (RPS), it creates a mandate for renewable electricity generation. Typically, a certain minimum amount of renewable generation (MWh) is required from sources such as wind, solar, geothermal, hydroelectric, and biomass. Electricity providers must either meet the minimum RPS or retire RECs essentially paying someone else to meet their obligation. Some states have no RPS, while others have aggressive targets. Rules vary state by state as to where compliance RECs must come from. In some cases, any RECs from the same independent system operator (ISO) are acceptable. In other cases, RECs must come from an adjacent state.
Voluntary RECs
Because renewable electricity generation has outpaced RPS requirements, surplus RECs exist. Many entities choose to offset their scope 2 emissions (indirect emissions from the purchase of energy) by purchasing RECs and retiring them. In some cases RECs and greenhouse gas (GHG) offsets have an elastic relationship as they are fungible in offsetting scope 2 emissions.
REC Transactions
Emissions Experts assists clients in trading RECs by working with generators, traders, voluntary buyers, and compliance buyers. Clients looking to offset scope 2 emissions engage us to understand their options (RECs and carbon offsets), compare costs, and perception of specific offsetting products. Emissions Experts engages with multiple potential sellers to reduce the cost of compliance.
US REC Tracking Systems
ERCOT (Electric Reliability Council of Texas) – Texas WREGIS (Western Renewable Energy Generation Information System) – Washington, Oregon, California, Nevada, Idaho, Arizona, Utah, New Mexico, Colorado, Wyoming, Montana, South Dakota, British Columbia, and Alberta
NVTREC (Nevada Tracks Renewable Energy Credits) – Nevada
NAR (North American Renewables Registry) – Kansas & Missouri
M-RETS (Midwest Renewable Energy Tracking System) – North Dakota, South Dakota, Minnesota, Wisconsin, Iowa, Illinois, Indiana, Ohio, & Manitoba
MIRECS (Michigan Renewable Energy Certification System) – Michigan
PJM-GATS (PJM EIS Generation Attribute Tracking System) – Pennsylvania, Maryland, Delaware, West Virginia, Virginia, Illinois, Indiana, Ohio, & Kentucky
NC-RETS (North Carolina Renewable Energy Tracking System) – North Carolina
NYGATS (New York Generation Attribute Tracking System) – New York
NEPOOL-GIS (New England Power Pool Generation Information System) – Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, & Maine