REC Registry Integration
The process will follow a few key steps to ensure seamless interaction and avoid double counting:
Renewable operators submit data to the PEC registry: The renewable operator would send hourly generation data and the associated REC information to the PEC registry, similar to submitting traditional RECs to receive hourly RECs.
REC retirement: To ensure that the environmental attributes of renewable energy generation are not double counted, the traditional RECs would be retired within the PEC registry. This step helps maintain the distinct value of the PECs and ensures that both instruments (RECs and PECs) do not claim the same environmental benefits.
PEC issuance: With the retirement of traditional RECs, the PEC registry would then issue new PECs based on the locational marginal emissions data and the actual carbon impact of renewable energy generation.
PEC transfer to offtaker: The newly issued PECs would be transferred to the offtaker (corporate buyer), who can then use these certificates to offset their Scope 2 impact-based emissions
This process aligns with the proposals designed by organizations like EnergyTag and others, which aim to create hourly RECs. By integrating PECs with existing REC registries and retirement processes, the environmental attributes of renewable energy can be tracked and verified more effectively, ensuring transparency and credibility in corporate sustainability reporting.
Double-Counting
A reliable and comprehensive Renewable Energy Certificate (REC) program ensures that multiple environmental claims are not made on the same unit of clean energy. In the absence of a clear mechanism to make such claims, a single unit of clean energy can be easily counted (and sold) multiple times by claiming the national grid average, power contracts, or geographical proximity to the plant.
Numerous governments, both national and local, as well as various voluntary programs, have put in place energy Renewable Energy Certificate (REC) schemes. These schemes are designed to assist energy producers, suppliers, and/or consumers in demonstrating their compliance with commitments or obligations regarding renewable energy. However, the quality and reliability of these schemes vary greatly. While compliance programs are trustworthy, voluntary ones are often of low quality or non-existent.
Examples include:
Renewable Energy Certificates (RECs)
In the United States, there are several names for Renewable Energy Credits (RECs), also called Green tags or Tradable Renewable Certificates (TRCs). These are certificates that are issued as proof that one megawatt-hour (MWh) of electricity was generated from a renewable energy source and then fed into the power grid. RECs can be used by utilities to demonstrate compliance with the Renewable Portfolio Standard (RPS) in 29 states, or by individuals or organizations seeking to fulfill their voluntary commitment to using renewable energy sources.
GUARANTEES OF ORIGIN (GOs)
In the European Union, each GO represents 1 MWh of renewable electricity and has the same quality as RECs. However, GOs are issued by EU governments and are recognized in all EU Member States, while RECs are issued by energy companies and are not accepted by all countries. Just like RECs and ROCs, GOs are tradable and can be used by companies to fulfill their energy greening commitments.
Renewable Obligation Certificates (ROCs)
In the UK, electricity suppliers are required to generate an increasing proportion of electricity from renewable sources under the Renewables Obligation (RO). To fulfill this requirement, suppliers must provide the regulator with sufficient ROCs, which they can obtain from eligible renewable power generators in the UK. Each ROC represents 1MWh of electricity generated, though some technologies may receive more ROCs (for instance, offshore wind receives two ROCs per MWh). The RO was closed for new projects in 2017.
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