Green Power Partnership
Green Power Market
How does an organization know it is getting what it bought?
RECs provide flexibility to support green power when a green power product may not be available from your own electricity service provider. Since RECs can be sold separately from the underlying electricity, the possibility for fraud can exist unless the RECs are tracked from their point of creation to their final point of use. Tracking ensures every REC represents 1 megawatt-hour (or 1,000 kilowatt-hours) of renewable electricity placed on the grid. This is also a challenge for bundled green power products, since in no case do attributes flow directly through power lines to your facility.
One way to protect against double sales is to buy green power products that are independently certified and verified through an audit. This becomes even more important when you buy RECs from outside your state or region.
Your organization can also buy RECs that have been issued by a regional certificate tracking system. A tracking system is an electronic database that is used to track the ownership of RECs, much like an online bank account. A tracking system issues a uniquely numbered certificate for each MWh of electricity generated by a generation facility registered in the system, tracks the ownership of certificates as they are traded, and retires the certificates once they are used or claims are made based on their attributes or characteristics. Because each MWh has a unique identification number and can only be in one owner’s account at any time, this reduces ownership disputes and the potential for double counting.
A tracking system can be used to verify compliance with a Renewable Portfolio Standard (RPS), to help creation of environmental disclosure labels, and to substantiate voluntary green power or environmental claims. Tracking systems are not substitutes for product certification and verification, as tracking systems only monitor wholesale transactions — individual retail green power customers do not generally hold accounts in tracking systems unless they make very large purchases.
Figure 1 shows the regional tracking systems that have been developed in the United States.
Figure 1. Certificate Tracking Systems
In order for RECs to count towards your Green Power Partnership commitment, they should come from renewable sources located in the United States and be applied to U.S.-based operations only. It is important that green power purchases be independently verified to ensure that the green power was produced and placed on the grid, and that no other purchaser is making a claim on the same environmental benefits. Organizations may pursue essentially two approaches to ensure verification:
- REC contracts and an audit of the chain of custody
- REC issuance and retirement within tracking systems
For more information about tracking system developments in North America, please visit the Environmental Tracking Network of North America.