Renewable Energy Certificates (RECs)
To document and report that the energy you consume in North America comes from renewable energy sources, you must buy Renewable Energy Certificates (RECs). In the US RECs are used both for compliance reporting as well as voluntary consumption, and comply with the Greenhouse Gas Protocol. ECOHZ also offers Green-e Energy certified RECs across North America. Green-e is North America’s leading certification program for renewable energy.
How it works
Renewable Energy Certificates (RECs) are designed as a market-based instrument to provide an economic incentive for electricity generation from renewable energy sources. Each REC represents proof that 1 MWh of renewable energy has been produced and embodies the environmental benefits that amount of renewable energy generated. REC registries electronically issue RECs based on renewable energy generators’ output. A REC, and its associated attributes and benefits, can be sold together or separately from the underlying physical electricity associated with the renewable-energy generation. RECs are an effective and recognised way of reaching emission targets and improving sustainability.
RECs are traded. When a company buys RECs as documentation for the electricity delivered or consumed, those RECs are cancelled in the registry. This single standardised instrument makes it easy to track ownership, verify claims, and ensure that RECs are only sold once and there is no double counting.
RECs are a market-based instrument and an effective way to increase the market demand for renewable energy. Buying RECs demonstrates environmental leadership, sends a signal to the market that you prefer to consume renewable energy, and shows your commitment to changing energy behaviour. RECs also give power producers an extra income source, making it more appealing to build more renewable energy production.
RECs can be used for voluntary Scope 2 reporting. Corporate stakeholders have increasing expectations about reporting the origin of the power consumed. They expect that companies report according to international standards including the CDP reporting and the Greenhouse Gas Protocol. The updated Greenhouse Gas Protocol Scope 2 Guidance features Guarantees of Origin, RECs and I-RECs as mainstream instruments for documenting and tracking electricity consumed from renewable sources. Over the years the REC market has developed its references and criteria.