Generated renewable energy is placed into the grid with energy from other sources, so a consumer likely isn’t actually using renewable energy even if that particular site generates enough renewable energy for its own use. Claims to be using renewable energy thus legally require a renewable energy certificate, and a generating entity can use the REC for its own claim or sell the REC for additional revenue.
The Eastern Municipal Water District sells its RECs, and that was the subject of a Dec. 4 session during the Dec. 3-6 Association of California Water Agencies fall conference in San Diego. Samuel Robinson, energy manager of EMWD, was a speaker during the Best Practices for Renewable Energy Certificates session as were TerraVerde Energy business development vice presidents David Burdick and Kevin Ross.
Photovoltaic energy systems are in all 50 states, and in California alone more than 25 gigawatts are generated on an annual basis. The Eastern Municipal Water District currently generates more than 5 1/2 megawatts of energy at its headquarters and at its Moreno Valley, Perris Valley, San Jacinto, Sun City and Temecula Valley recycled water reclamation facilities, and Eastern plans to expand its on-site energy generation to approximately 16 megawatts during 2020. Eastern utilized its existing generation to test the REC market this year.
“So far it’s just worked out well,” Robinson said. “Our expectations for a certain dollar value were exceeded.”
For EMWD, the solar energy generation reduces the district’s costs, and the sale of the RECs provides additional income. The REC is a market-based instrument which represents production of renewable energy.
“Basically it’s the rights to claim or brag about a green renewable power that’s being generated from that,” Burdick said.
Some customers are municipal utility entities, including community choice aggregation systems, which can use the RECs to achieve a percentage of energy which is from renewable sources, while other REC customers are commercial enterprises with internal sustainability goals.
The contract for a renewable energy system may stipulate that the system is owned by someone other than the property owner, in which case the contract will also determine whether the property owner or the system owner has the rights to the RECs. For RECs to be generated the energy-producing system must be registered with the proper independent tracking system, which for EMWD and TerraVerde is the Western Regional Energy Generation Information System. The production must also be reported to WREGIS, and each megawatt hour generates one REC. Under state law hydroelectric systems with an annual generation of more than 30 megawatts are not eligible for the REC program. The EMWD solar energy contract also includes the provision of monitoring services as well as the district’s right to the RECs.
The sale of RECs does not affect the ability to generate energy at a low cost.
“You’re consuming the electron. You’re just selling the bragging rights,” Burdick said.
Although a generating entity which sells RECs cannot claim to be using renewable energy legally acceptable statements include generating energy and selling it to another party or producing renewable energy to reduce energy costs and to generate additional revenue through the sale of RECs.
“You can’t claim to use, consume your solar-generated electricity once you sell the RECs,” Burdick said.
The sale of a REC requires not only the documentation but also the search for potential buyers, which is followed by the receipt of offers and subsequent sale agreements.
Joe Naiman can be reached by email at firstname.lastname@example.org.