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Renewable Energy Credits (RECs)

Category: Energy Supply, Renewable Energy Credits

Renewable Energy Credits

Summary

Renewable energy credits are non-tangible commodities that represent the property rights to the environmental and social benefits of renewable energy. One REC is equal to 1 megawatt hour  (MWh) of renewable energy produced. RECs are created at the time of electricity generation by renewable energy sources such solar, wind, geothermal, etc. RECs are verified, managed and traded by third-party organizations.

Benefits

  • One of the easiest and most flexible ways to mitigate purchased electricity related emissions.
  • Supports development of renewable energy resources by providing an additional revenue stream.
  • Minimal upfront cost with no long-term contract required.
  • Universities could not only purchase clean energy, but sell their own REC’s if existing wind or solar operations overproduce

Challenges

  • By definition, purchasing RECs will increase electricity costs.
  • RECs vary greatly in quality, traceability and price.
  • Not all stakeholders may view this as a genuine carbon-mitigation strategy.
  • Can vary greatly state-to-state

Impacts

Greenhouse Gas Impact
Enormous
Economic Impact
Small Net Cost
Feasibility
Doable
Timeline
< 1 year
Maintenance
Low / None
Publicity
Hmm... Okay.

Greenhouse Gas Impact

Can be significant if large amounts are purchased

Economic Impact

By definition purchasing RECs is cost-additive.

Feasibility

Many institutions are already purchasing RECs.

Timeline

RECs are available for purchase. Internal approval may take time.

Maintenance

Other than annual monitoring and purchasing, there is no maintenance required.

Publicity

One of the most accessible solutions but stakeholders may remain skeptical.