solar renewable energy certificates - smart and …€¦ · · 2017-04-06states can spur...
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Solar Renewable Energy
CertificatesSmart and Sustainable Campuses Conference 2017
What RECs are and why they are important
How RECs are used and how they affect costs
Best practices and additional resources
Making environmental claims – Hampton
Understanding SRECs – Christian
Case Study: National Aquarium REC arbitrage
Q&A
Session Outline
2
What is a Renewable Energy Certificate?
3
A REC is the legal instrument that conveys to its owner the exclusive right to claim the associated environmental attributes of a generating resource
A REC represents and conveys the “renewable-ness” of electricity generation to consumers
A REC is created for every Megawatt-hour of renewable electricity generated and delivered to the utility grid
A REC includes, among other information, the following:
Type of renewable resource
Location of renewable resource
Date stamp or vintage of generation
Emissions profile of the generating resource
Unique identification number
Why RECs are Important RECs are used to allocate renewable energy to individual consumers on a shared grid
The grid’s physical electricity says nothing about its source, its environmental impact or the method of its generation
Influence electricity market dynamics by allowing the expression and aggregation of consumer preferences for specific forms of electricity generated from renewables
REC procurement reduces available REC supply sending a demand signal to the market to develop more supply
They are used to legally substantiate consumer claims of renewable energy generation and use, as well as substantiate consumer environmental marketing claims
Tool used for meeting voluntary corporate goals for greenhouse gas reporting as well as for state policy mandates under Renewable Energy Portfolio (RPS) standards
They are used by organizations as a tool to reduce indirect scope 2 emissions
Incent new renewable energy project development
Voluntary users can qualify their preference for specific renewable technologies
States can spur development through mandated programs (SREC programs)
How are RECs Used? Compliance markets exist because of state policy decisions and mandates; such as state renewable
portfolio standards (RPS). Such standards require some electric service providers to have a minimum amount of renewable energy in their electricity supply. RECs are used for tracking these claims of compliance towards state mandates.
Voluntary markets are driven by consumer preference for renewable electricity. Voluntary markets allow a consumer to go above and beyond what mandatory policy decisions require and to reduce the environmental impact of their electricity use. RECs are used by voluntary consumers to substantiate renewable electricity use and environmental marketing claims.
Impact on Cost of Delivered Electricity: Self-Financed Systems
REC
MarketRECs
$/REC
RECs
Make solar power use claims
Pay relatively higher price for renewable
electricity
Cannot make solar power use claims
Pay relatively lower price for grid-
average electricity
Impact on Cost of Delivered Electricity: Third-Party Financed Systems
3rd-Party
System Owner
REC
MarketRECsRECs
$/REC$/kWh
3rd-Party
System Owner
RECs
$/kWh + RECs
REC Arbitrage
REC arbitrage
Monetize RECs from project into REC market to improve project economics
Use some of the value of the monetized RECs to purchase lower cost
replacement RECs
REC price varies based on many factors (supply, demand, location, resource type,
size of purchase, timing, market application)
State mandates are primary factor driving price disparity between RECs used
for compliance purposes verses RECs used for voluntary purchases
Arbitrage still changes your claims – slightly!
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REC Arbitrage
9
REC Arbitrage: National Aquarium
10
Entered into a 25-year PPA with Constellation Energy for offtake from a 4.3 MW solar project
Comprised of 14,500 PV panels and is designed to meet 40 percent of the Aquarium’s annual electricity needs.
REC arbitrage into Maryland’s SREC market to improve project’s economics
Replacement RECs are Green-e certified
10
REC Arbitrage
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REC conveyed to developer (No arbitrage)
REC Arbitrage REC retained by consumer (No arbitrage)
Improve economics of electricity procurement
Yes Some No
Enables consumer to substantiate renewable energy “use” claims
No Yes, with qualifications
Yes
To become solar powered
Reduce carbon footprint
Meet stated environmental or climate commitments
Save money and/or reduce variability in price of power
Demonstrate leadership
Attract students
Hands-on educational and research tool
Why are Schools Looking at Solar?
To become solar powered (REQUIRES REC OWNERSHIP)
Reduce carbon footprint (REQUIRES REC OWNERSHIP)
Meet stated environmental or climate commitments (REQUIRES
REC OWNERSHIP)
Save money and/or reduce variability in price of power
Demonstrate leadership
Attract students
Hands-on educational and research tool
Why are Schools Looking at Solar?
Green Power Partnership, Making Environmental Claims: www.epa.gov/greenpower/making-environmental-claims
RE100, Making Credible Renewable Energy Usage Claims:media.virbcdn.com/files/62/53dc80177b9cc962-RE100CREDIBLECLAIMS.pdf
The Federal Trade Commission, Green Guides: www.ftc.gov/sites/default/files/attachments/press-releases/ftc-issues-revised-green-guides/greenguides.pdf
Vermont Attorney General's Office, Guidance for Third-Party Solar Projects:ago.vermont.gov/assets/files/PressReleases/Consumer/Guidance%20on%20Solar%20Marketing.pdf
Electricity Marketing Claims Resources
14
Green Power Partnership: www.epa.gov/greenpower
Renewable Energy Project Development Toolbox: www.epa.gov/repowertoolbox
More Questions?
James Critchfield, EPA, [email protected]
Hampton…..
Christian….
Any Questions?
REC Claims: Best Practices
16
Ensure your contractual right to make claims
Ensure your purchase does not count towards a mandate
Make claims that match the scope of your purchase
Avoid making claims where green power purchases originate from projects in markets outside of where the green power will be applied
Retain ownership of RECs for on-site green power
Retire the RECs associated with your green power purchase
Support your claims by buying certified or verified green power products
Avoid claiming emissions reductions not included in your purchase
Use the terms "REC" and "offset" correctly in your claims
Ask for communications assistance from industry experts and key stakeholders (e.g., EPA GPP)
Appropriate claims under various scenariosScenario Appropriate Claims Using Zero-Emissions
Electricity
College has onsite solar
system and owns associated
RECs
We are using solar power
Our solar reduces our carbon footprint
We are powered by solar energy
Our electricity comes from solar panels
Apply the zero emissions rate
conveyed by the REC to your
purchased electricity
consumption under Scope 2
College has onsite solar
system but does not own
associated RECs
We generate solar energy but sell it to another
party
Our solar panels are helping reduce our energy
costs and generate revenue through the sale
of the RECs
We are not using solar power but our solar
system is helping to green the grid
By selling the RECs from our solar system to
our utility we are helping it fulfill its state-
mandated renewable energy targets
In the absence of an
emissions rate from RECs or
electricity supplier, apply
either a residual mix or grid
average emissions rate to
calculate your unspecified
purchased electricity use.
College has onsite solar
project and does not own
associated Solar RECs, but
purchases wind RECs equal
to 100% of power needs
We generate solar energy but sell the RECs to
another party. However, we purchase 100%
wind power and have zero scope 2 emissions.
The replacement wind RECs
allow you to apply a zero
emissions rate to your
purchased electricity, but not
claim it to be of solar origin.