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Energy Cast Podcast: Green Mountain Energy explains RECs

REC
The key to their business plan is purchasing Renewable Energy Credits (or Certificates) on behalf of their customers for every kilowatt consumed, guaranteeing a market for renewable energy.

Energy Cast is a podcast featuring some of the top experts across all links in the energy industry chain, including renewables, generation and more! Jay Dauenhauer created the show and has been hosting Energy Cast for several years.

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I have probably had a relationship with Green Mountain Energy longer than any other guest.  Back when I lived in Austin and was just starting out in this sector, they had a reputation for being a leader in clean energy.

Started in 1997, Green Mountain is the longest-serving retail electric provider of clean energy.  Their founders described themselves as “flannel-wearing, sandal-footed, long-haired, tree-huggers.”

In deregulated electric markets, you can choose your Retail Electric Providers (REPs).  Customers who sign up with Green Mountain choose options to only use green energy—mostly wind, solar, and hydroelectric.

Unless your home is off-grid and uses only rooftop solar, or if your home is wired to a wind farm, the electricity you use is not literally renewable-only.  Green Mountain guarantees their customers are consuming renewable energy through the purchase of Renewable Energy Credits, or Certificates (RECs).  For every kilowatt of energy a Green Mountain customer uses, Green Mountain purchases an REC from a certified renewable project.

“Buying and retiring these RECs on our customers’ behalf ensures that renewable energy is generated that matches 100% of our customers’ annual usage,” says Daniel Richmond, Manager of Solar and Strategic Partnerships for Green Mountain Energy.  To keep the lights from flickering, Green Mountain purchases electricity to cover their customers’ minute-by-minute needs.  The result is reliable energy that boosts the demand for renewables.

I asked Daniel what sets Green Mountain apart from other REPs.  After all, there are many larger REPs in the country, who could also offer a similar scheme.  Daniel says their competitive edge consists of:

  1. Offering a variety of renewable sources
  2. Ensure customers are “really” getting renewable energy through 3rd-party audit verifications (Green-E)
  3. All plans at the company are 100% renewable

He adds that claiming RECs can be challenging and without proper audits can often be double-counted.  Since there are a finite number of RECs available, their costs are dictated by market forces.  Therefore, more demand for RECs should hopefully spur more renewable projects.

Green Mountain is firmly dedicated to “Clean Energy” that is renewable and predominantly wind and solar.  But I was curious how Daniel felt about some other sources:

  1. Non-wind/solar renewables—Hydroelectric is purchased in New York.  They are open to sources like geothermal and tidal energy in the future.
  2. Storage—“My view on it is, if the [storage facility] is charged up using renewable energy, I’d say that renewable energy continues to flow through it.  You stored it up with renewables, so you create the REC when you release the energy.”  However, that could fall outside REC rules.
  3. Nuclear—Does not create RECs, but does produce “Zero Emissions Credits” in New York and Illinois.
  4. Carbon Capture—Again, do not create RECs.  However, Daniel did work on the Petra Nova project while at NRG.

In the 20+ years since Green Mountain first started providing energy to California, much of the public has caught up with these “tree huggers.”  Daniel believes this shift happened when wind and solar became affordable to produce.

He adds, “People have gotten more conscious of environmental issues and the impact that their electricity usage has on these environments.” (This podcast originally aired in November 2019.)


Energy Cast Podcast is hosted biweekly by Jay Dauenhauer.

Learn more about the podcast here.

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