Renewable Energy Certificates (rec) In Use By Large Utility Companies

Renewable energy certificates help to distinguish the mix of electricity produced

by traditional fossil fuel-based means and that which is produced by renewable energy means within an energy grid. A renewable energy certificate is to accompany electricity that is produced by a renewable-based electricity generator that is fed to a national grid.

This helps distinguish 'green' energy from that produced from other sources once it will already be in the system. Renewable energy certificate will be able to convey the benefits of electricity and not the product. The bearer of the certificate will have the full benefits of the electricity which was produce using renewable sources. These certificates are designed to convey actual benefits to its owners.

Such certificates can be traded or bartered and owners can even have a claim on purchases. A unique identification number corresponds to every renewable energy certificate to ensure that it will not have a double count.

States within the United Stated are operating within a Renewable Portfolio Standard. Electricity companies within these states must therefore produce a specified amount of energy from renewable energy sources. In purchasing renewable energy certificates, utility companies demonstrate their compliance.

The existence of this certificate in any company will help make the development and construction of alternative energy sources financially viable. In future terms, any developer will be able to point to the consolidated value of the Renewable Energy Certificates. As proof of being involved int he movement, consumers and corporations choose to buy certificates.

There are a number of networks that verify the certificates to help control the market. An example of verification networks is the Eco-Power Program, who usually refers to the certificates as 'green tags' in the market. Examples of qualifying technologies for green tags are hydrogen fuel cells, geothermal, biomass, wind and solar energy technologies.

Renewable energy certificate concept has been criticized since it might not significantly contribute to the system. For example, there's no paper trail that confirms that additional renewable power results from the REC in voluntary markets.

Volume determines the true power of renewable energy sources. Power from these sources consistently enters the market which could lead to price drop. Furthermore, the market shall dictate that energy production from traditional sources be reduced.

If a larger amount of RECs will be purchased, renewable energy will become more cost effective as compared to non-renewable sources of energy. Every green tag corresponds to 1MWh of electricity produced from a certified green energy source.

by: Daniel Stouffer

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