Renewable Energy Credits Play Integral Role in Corporate Green Energy Strategies

Corporations and institutions are increasingly turning to voluntary renewable energy certificates (RECs) to meet ambitious clean energy and sustainability goals.  RECs, which represent the generation and delivery of green power to the U.S. grid, can offer organizations added flexibility and an easy way of purchasing green power. 

In the past decade, the number of organization using voluntary renewable energy certificates has exploded. According to data from NREL’s Green Power Marketing report, commercial and institutional purchases of RECs increased more than 350% from 2005-2009.  Leading Fortune 500 companies, such as Whole Foods Market, Intel, and HSBC, have used a combination of RECs and on-site renewable energy to cover 100% of their organizations’ electricity demands. Below is a list of the top 5 green power purchasers from the EPA’s Green Power Partnership. 

Top 5 Corporations and Institutions Annual Green Power Use

Green power strategies are typically comprised of a portfolio of energy efficiency and demand reduction projects, on-site renewable energy generation, and green power purchases, in the form of RECs or utility green power programs.  Achieving sustainability and clean energy targets require companies to undertake energy efficiency and reduction efforts, while simultaneously working to develop cleaner, renewable sources for electricity.  The composition of a given organization’s energy portfolio will depend on the relative costs and benefits of specific investments in energy efficiency and onsite renewables.  Where additional clean energy and/or GHG reduction benefits are needed, RECs play an important role. 

Renewable energy certificates offer a number of key benefits, including:

• Flexibility: Organizations can quickly and easily scale purchases of RECs to match the organization’s goals. Also, RECs can be purchased related to renewables projects of a specific type or geographic location. 
• Cost: RECs can be purchased year to year. They don’t require a long-term power purchase commitment or a significant upfront installation cost. 
• No site restrictions: Many facilities are not suitable for renewable energy systems, due to a lack of roof space, shading, or other issues; also, many corporations lease their space, which prevents them from installing an on-site renewable system.  RECs are ideal for customers in these situations.

The graph above provides an interesting illustration of a corporate ‘green power’ strategy. Ron Kalich, the national facilities director at Kaiser Permanente Corporation, presented this graph at the Silicon Valley Energy Summit in 2010. It details how Kaiser plans to meet its energy goals. Kaiser will utilize a number of energy efficiency efforts, such as lighting retrofits and building recommissioning, to reduce energy usage by 30% from 2008 levels by 2020.  They have also installed a number of on-site solar facilities, ultimately targeting 27% of their energy from renewable sources by 2020.  

Yet for many organizations, installing on-site renewable energy systems and implementing major energy efficiency programs is too cost or time-prohibitive to fully meet near-term sustainability goals. These organizations are adding RECs into the equation, to offset some or all of the fossil-based energy use not yet addressed by efficiency or on-site green power generation. 

As more organizations set sustainability goals, the demand for voluntary RECs is likely to increase.  RECs will continue to play a key role in overall sustainability and ‘green power’ strategies, as a complement to onsite renewables and energy efficiency investments.  

On October 12, 2011, AltaTerra will host an online briefing, Corporate and Institutional Green Power Strategies: Understanding the Growing Market for Renewable Energy Credits (RECs) to discuss the basics and best practices for purchasing, using, and communicating the value of RECs.  Attendees will learn how Whole Foods Market, the EPA's Green Power Partner of the Year, has incorporated RECs into its sustainability strategy and how they are communicating their REC purchases to stakeholders.