 |
|
|
What Is It? | Why Buy It? | How to Buy It | Who Has It? | My Impact | Policies | Links | Index | AWEA Home |
|
|
|
|
|
What Are Tradable Renewable Certificates? When we buy green power, we know that it is not actually delivered to our meter because electricity follows the path of least resistance to the nearest load, or consumer of electricity. Instead of getting green power at our meter, we simply expect the amount of energy we have purchased to be delivered to the local or regional electric grid. We still get the electricity we use, and we also get the benefits of more wind or other clean energy source on the wires. Another way to say this is, we buy the electricity "bundled" together with the green attributes that add value to the electricity. Now imagine that each kilowatt-hour (kWh) produced by a wind plant or other renewable power source has a label or tag attached to it. The label represents the attributes of that energy, such as the avoided pollution from not burning fossil fuels (carbon dioxide, nitrogen oxide, sulfur dioxide, mercury and so forth). It is these attributes that we look for when we purchase green power. These attributes can be "unbundled" from the electricity and sold and purchased separately from the electricity generation that created them. When unbundled from electricity, these attributes are called "Tradable Renewable Certificates." You may also hear them referred to as renewable energy credits, green tags, or green tickets. The price they trade for represents the premium value that markets place on green power. We can buy generic electricity at the lowest possible cost, and buy an appropriate amount of TRCs to "green" that electricity for whatever value the market places on them. The fact that TRCs can be traded separately from electricity makes it possible for you to, in effect, buy green power anywhere, regardless of whether or not your utility or supplier offers green power. TRCs can actually make it easier for you to buy green power from a supplier. Your supplier can buy generic power on the wholesale market, or generate electricity from a fossil fuel plant, and buy TRCs to "re-bundle" with the generic power. This would enable your supplier to claim environmental benefits for the power sold to you. Some may feel that it is misleading to sell a re-bundled product made from combining coal or nuclear power with TRCs from wind or hydro, and calling it wind or hydro. But this is really the same as green power - what you get at your meter is not necessarily the wind or hydro that you are paying for. And your retail supplier will have paid the premium for the environmental benefits to the renewable energy generator. It is important to understand that TRCs are limited in quantity. A TRC is created only when a given quantity of electricity is generated from a renewable energy source. Generators and other companies that deal in TRCs must maintain accounting systems to make sure that there is no "double counting" and that the same TRC is not sold to more than one customer. By purchasing TRCs, you can be assured that the renewable energy is generated - somewhere. It may matter to you where the renewable energy is generated. After all, some of the environmental benefits are local, such as sulfur dioxide and nitrogen oxide emission reductions. These pollutants are responsible for smog and acid rain. Carbon dioxide emissions, on the other hand, are a greenhouse gas, and therefore contribute to global warming. This is a world-wide, not a local, environmental problem. What should you look for in purchasing TRCs? You'll want to look for the same things that you consider when buying green power: · Type of renewable resource · Percent of renewables · New renewables · Price · Emissions · Location The last one, location, is not something you normally have to think about when buying green power, because green power is delivered to your grid. If local benefits are important to you, you may want to make sure that the renewable energy generation is located in or will be delivered to your region. For the location of wind projects in the United States, click here. On the other hand, if you want global benefits and just want to support wind, for example, it may not matter where the plant is located. In that case, TRCs are ideal because they can come from anywhere. Wind power, for example, isn't as available in some parts of the country as it is in others. Wind turbines connected to utility systems must be sited in regions and specific locations where wind speeds average at least 5 meters per second (11 miles per hour). In addition, even if an area is windy, it may not be suitable for a wind project because of proximity to homes, bird flyways, or parks and wilderness areas. Thus, if you want to support wind but it's not available in your state or region, tradable renewable certificates from wind are a good option to consider. Any vendor selling TRCs should be able to describe the characteristics of the power plant that generates the TRCs, including what plant created the TRCs and where it is located. For a list of companies selling TRCs, click here. Who verifies that TRCs are real? How do you know the TRCs aren't being sold multiple times? Again, TRCs are like green power. Both are intangible and therefore should be tracked and verified. At this point, we don't have a national registry or database for TRCs. This would enable us to match the number of TRCs with the number of kilowatt-hours (kWh) generated. The New England region is creating a database for all generation in the region, that may be used for several purposes, including TRC verification. In addition, the Center for Resource Solutions (owner of the Green-e Certification Program) is developing a TRC certification standard. Finally, the National Wind Coordinating Committee has developed a position on opportunities and guidelines for tradable certificates (download PDF document). As we gain more experience, and registries become more common, we should be able to monitor trades more easily. |
 |
|
|
American Wind Energy
Association |
|
|
|
|
