How Do Renewable Energy Certificates Work?

With an increasing number of businesses looking to reduce their carbon footprint, companies are taking positive steps forward to meet the government’s net zero target. For many companies, the simplest way to start the reduction is by buying their energy from renewable sources.

For this to happen, you can choose a renewable electricity supply backed by Renewable Energy Guarantee of Origin certificates. Thisis an example of a renewable energy certificate which guarantees that your supplier will source electricity from renewable generation.

One might ask, what is renewable energy certificate? Well, this is simply a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable electricity generation. RECs are issued when one megawatt-hour of electricity is generated and delivered to the electricity grid from a renewable energy source.

A renewable energy certificate includes several data attributes such as certificate data, certificate type, tracking system ID, renewable fuel type, renewable facility location, and nameplate capacity of projects. Depending on the market in which the REC is generated, other attributes may be associated with the certificate.

Considering the physical electricity we get through the utility grid says nothing of its origin or how it was generated. RECs play an essential role in accounting, tracking, and assigning ownership to renewable electricity generation and use. On a shared grid, RECs are the instrument that electricity consumers must use to substantiate renewable electricity use claims.

Some people tend to confuse RECs and offsets, and they’re not to blame because both offsets and RECs represent the environmental benefits of certain actions that can help mitigate greenhouse gas emissions. Offsets and RECs, however, are fundamentally different instruments with different impacts representing different criteria for qualification and crediting in the context of inventory or emissions footprints.

As we conclude, how can you be sure your power is truly renewable? For starters, you need to check the terms of your power product. If you don’t want to support power from fossil fuels such as you want to ensure you’re settling on renewable source electricity. Some suppliers ask you to select renewable power via a certain product or contract, but still sell you a majority non-renewable contract if you haven’t specified what you want.

For this reason, you should take the time to review your power product before deciding on anything. Only then can you be sure of what is bound to come your way.