Renewable energy certificates (RECs)
Renewable Energy Certificates (RECs) are a market-based instrument that represents the environmental attributes of electricity generated from renewable energy sources. RECs play a crucial role in promoting and supporting the growth of renewable energy generation and reducing the environmental impact of electricity consumption.
Features
Purpose
To provide a means to track and verify the renewable characteristics of electricity, such as wind, solar, hydro, and biomass.
Ownership and Trading
RECs can be bought, sold, or traded separately from the physical electricity. This allows individuals, businesses, and utilities to claim the environmental benefits of renewable energy.
How they work
RECs represent the environmental attributes and are typically generated from a renewable energy facility in one-megawatt-hour (MWh) increments.
Compliance and Regulations
RECs are regulated by a set of Code of Practice to ensure that issuance, transfer and retirement of RECs are standardized.
Certification
An independent third party, often a reputable organization, certifies the authenticity of the RECs. This certification ensures that the renewable energy facility adheres to specific standards and RECs are not counted more than once.
Market Value
The value of RECs can fluctuate based on market dynamics, renewable energy supply, and demand.
To summarize...
Renewable Energy Certificates are a market-driven tool that incentivizes and accounts for the production and consumption of renewable energy. They help support the growth of the renewable energy sector, reduce carbon emissions, and offer consumers and organizations a way to make eco-friendly choices in their energy consumption.