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REC Tracking
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 1000 kilowatt-hours (or 1 megawatt-hour) 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. These tracking systems issue certificates based on metered generation. In this case, each certificate has a unique serial number. As the RECs are bought and sold, the owner of the REC is tracked. When the RECs are used (sold to final buyer or used to comply with a state renewable portfolio standard [RPS]), they are retired within the system in the name of the final buyer. Retirement of RECs ensures that no other person or organization can make claims on the same renewable attributes, sometimes referred to as double counting.
Tracking makes it easier to verify and authenticate each REC in type and quantity bought. Tracking systems have been developed for New England, Texas, the mid-Atlantic PJM region, the western states and the upper Midwest, as shown in Figure 1. In the mid-Atlantic electricity region known as “PJM,” parts, but not necessarily all, of the states are covered.
Partnership Perspective
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. Because not all states and regions have certificate tracking systems in place or under development, it is important that purchases be independently verified. Organizations may pursue essentially two approaches to ensure verification:
- REC contracts and an audit of the chain of custody
- REC tracking systems