- What are Renewable Energy Certificates?
- How do Renewable Energy Certificates work?
- How can I qualify for a Renewable Energy Certificate?
- What are the steps to obtaining a Renewable Energy Certificate?
- How can lawyers assist clients with Renewable Energy Certificates?
- Renewable Energy Certificates: Powering change, one certificate at a time
Looking to plug into a greener future? You might want to check out Renewable Energy Certificates, which make it simple for Canadians to support clean electricity.
In this article, we’ll discuss what these certificates are and how they work. You can also consult energy lawyers for electricity to learn more how these certificates help Canada turn over a new leaf on its energy sources.
What are Renewable Energy Certificates?
Renewable Energy Certificates, or RECs, are proof that an entity purchased green or clean electricity. When a renewable energy producer (e.g., wind farm, solar plant, hydropower facility) generates one megawatt-hour (MWh) of electricity, it also creates one REC. In other words, one REC is equal to one MWh of produced energy.
Purchasing this certificate shows that:
- the buyer’s electricity use is matched by renewable energy added to the power grid
- the buyer supports renewable energy producers and offsets electricity use from traditional sources
Also called “green tags,” RECs can be independently sold, traded, or consumed from the renewable energy that was actually produced. Since RECs are separate from the actual electricity that flows into homes or businesses, anyone can buy RECs to show their support for renewable energy, even if the electricity they use comes from the regular grid.
All told, buying an REC helps fund clean energy projects and lets individuals or companies claim that their power use is matched with green energy.
Here’s a video explaining how RECs work:
To learn more about RECs and how they apply in Canada, you can consult any of the best energy lawyers for electricity in Canada as ranked by Lexpert.
How do Renewable Energy Certificates work?
Below is a step-by-step lifespan of a Renewable Energy Certificate, including how they are made, sold, and retired:
- Production of energy: a renewable energy facility or generation company produces renewable energy (also interchangeably called green or clean energy), with one REC equal to one MWh of electricity
- Certification of REC: the REC is certified or registered by a certified registry to track its journey from creation to retirement; a unique serial number will also be issued to prevent its duplication
- Selling the REC: the facility or company can either sell the renewable electricity through an REC or offer it together with the generated renewable electricity as one package
- Tracking the REC: once sold, the REC will be tracked by the certified registry and record its transfer from the generating facility to the purchasing company, i.e., from seller to buyer
- Retiring the REC: the buyer retires the REC in the certified registry, which means that it cannot be used or sold again; the buyer will then be credited for one MWh of clean electricity per one REC
RECs in Canada
Renewable Energy Certificates are becoming popular because of the Canadian government’s recent shift to renewable energy and its commitment to net-zero emissions by 2050. In Canada, RECs are used by businesses, individuals, and even the federal government to support clean energy and reach the country’s climate goals.
The federal government, for example, buys RECs to match the electricity used in its buildings to help the country move closer to net-zero emissions. Public Services and Procurement Canada (PSPC) is also working on purchasing 128,000 MWh worth of RECs, where the government awarded a $4-million contract to a joint venture for the supply of 6,400 RECs in 2023.
Certifying agencies of RECs in Canada
Each Renewable Energy Certificate is tracked by special registries to make sure it is only used once. These registries give each certificate a unique number and record its creation and retirement. This process helps prevent double counting and maintains the system’s integrity.
For Canadians, there are no single entity that certifies RECs; several companies and organizations perform this role. The important thing is that the certifying organization follows the North American standards. It does not need to be based in Canada; US-based companies can also certify Canadian RECs.
Here are some of the bodies that certify RECs for Canada:
- Green-e
- M-RETS
- NEPOOL GIS
- UL ECOLOGO
- WREGIS
Significance of RECs
Renewable Energy Certificates serve many purposes, including:
- To comply with zero-emission goals: As more energy shifts from traditional sources to renewables, the market for RECs is expected to grow. RECs show the commitment of governments and the private sector to more sustainable energy
- To show support for green energy: Once energy is added to the grid, it is indistinguishable whether it was generated from renewable or traditional sources. Businesses can purchase RECs to show their use of green energy and offset non-renewable energy consumption.
These are important considerations if your company wants to buy RECs. It would also be advisable to consult with energy lawyers who are experts on Canadian electricity laws before purchasing RECs.
RECs vs. Carbon Credits
While these two support the global goal of achieving net-zero emissions and a push for clean energy, RECs and carbon credits work differently.
Renewable Energy Certificates show that one MWh of electricity was made from a renewable source and added to the grid. When someone buys an REC, they are claiming the environmental benefits of using renewable electricity, even if the power they use comes from traditional sources.
Carbon credits, on the other hand, are used to offset a set amount of greenhouse gas (GHG) emissions. When a company buys a carbon credit, it is paying for a project somewhere else (e.g., in another country) that reduces or removes these GHG emissions.
These projects can be planting trees, capturing methane, and other GHG sequestration activities. This helps balance the company’s own emissions, but it does not mean the electricity they use is from renewable sources.
In short, RECs are about supporting and claiming renewable electricity, while carbon credits are about balancing out the emissions that the buyer produces. Both can help with sustainability goals, but they track and measure different things.
How can I qualify for a Renewable Energy Certificate?
To qualify for a Renewable Energy Certificate, the electricity produced must be made from a renewable source, such as wind, solar, or hydro facility. The facility that produces electricity also needs to be registered with a certified registry.
Read next: Hydro permits: Key rules for electrical and water projects
If your business wants to buy an REC, you do not need to produce electricity yourself. It is important to purchase the REC from a certified supplier or registry and retire it to claim the renewable energy benefits.
This video explains what it means to own or buy a Renewable Energy Certificate in Canada:
Interested in buying a REC in Canada? Ask your options first from a Lexpert-ranked best energy law firms for electricity in Canada.
What are the steps to obtaining a Renewable Energy Certificate?
Buying Renewable Energy Certificates may not be as straightforward as it looks. Here’s a simplified summary of how to obtain one:
- Choose a supplier: with the help of an energy lawyer, you can look for a certified REC provider or registry that serves your province or territory
- Select the type and amount: decide how many RECs you want and which renewable source you prefer (e.g., wind, solar, hydro)
- Purchase the RECs: buy the certificates directly from the facility or through a trusted marketplace
- Get confirmation and tracking: receive proof of your purchase, including the serial numbers and registry details of your purchased RECs
- Retire the RECs: ask the supplier or registry to retire your certificates so you can officially claim the renewable energy
How can lawyers assist clients with Renewable Energy Certificates?
While a lawyer is not required when buying and retiring Renewable Energy Certificates, there are several advantages to getting the help of one, especially an energy lawyer for electricity:
- know how RECs work: energy lawyers can help clients understand the rules and options for RECs in Canada; they can explain how RECs work, what local laws may apply, and which registries are trusted for tracking certificates to avoid costly mistakes
- guide clients in buying or selling RECs: energy lawyers can guide clients through the REC process, such as the buying, selling, and retirement; they can also help review contracts, make sure the certificates are valid, and confirm that their client’s purchase is properly recorded
- advise clients on REC-related matters: if clients have questions about local rules or government programs related to RECs, energy lawyers can review the details and provide tailored advice
Renewable Energy Certificates: Powering change, one certificate at a time
Renewable Energy Certificates give Canadians a simple way to support clean power and contribute to a greener grid. By choosing these certificates, businesses can help Canada grow its renewable energy supply.
If you want to make a bigger impact or need advice, electricity lawyers can help you understand your options. They can guide you through the process and make sure your support for clean energy counts.
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