February 2, 2009

Renewable Energy Credits

With the fast depletion of fossil fuel reserves around the world, our energy needs is feared to be depleting also and we can possibly experience regular power shortage once not augmented. Fortunately, the advent and the continuing development of the renewable energy are now in place. Different renewable power plants are started to be erected to facilitate generation of electricity using the power of renewables (in the form of sunlight, wind, water, biomass, or geothermal).

You might wonder how the power or electricity that is derived from these renewable energy sources is delivered to the customers. You need not to wonder. This article will provide you information with regards to the renewable energy credits. Of what it is and how it works, continue reading and learn more.

Renewable Energy Credit- An Overview

Before we defined renewable energy credit, let us first take a look on how we measured conventional energy through the form of electricity. The energy produced by a power plant will be distributed to the local electric grid which will take charge of distributing the standard voltage (110 volts) to households and/or commercial establishments. The energy is measured through a watt-hour meter which will determine the quantity of energy acquired by the local grid from the power plant.

Renewable energy credit (also known as REC) corresponds to one megawatt-hour (MWh) of renewable energy which is physically measured through a meter and verified from the generator of the renewable energy project. The green power (electricity generated through renewable energy sources) is delivered to the local electric grid where the project is situated. In other words, REC is the actual quantity of green power that is produced by the project and delivered to the local electric grid.

How REC Works?

Just like conventional energy, it is impossible to deliver physically the energy from a renewable energy project directly to the consumers, either a household or a business establishment. REC paves the way for easier renewable energy transactions. Of how REC works in an energy deal, consider the following instances.

When a renewable energy project, let us say, a hydropower plant generates electricity, REC are issued to find out the exact quantity of produced green power. Selling these RECs allows the hydropower plant to be competitive with fossil fuel power plants by producing more and more green power. On the other hand, buying RECs converts the ownership of the hydropower. The REC deal helps consumers and businesses as well to buy green power at a reasonable price.
Advantages of RECs

Aside from the convenience of purchasing renewable energy across the country, RECs also offsets high electricity consumption derived from the traditional fossil fuel resources. There are certain advantages of RECs in the energy consumptions. These are briefly discussed in the preceding items.

1. RECs give a cost-efficient renewable energy system. Through REC trade, the capability of renewable sources to produce more green power is achieved. Thus, it really offsets high electricity costs.
2. RECs also encourage competitive technological advancement to generate green power. The advancement can further help reduction of greenhouse gases that are emitted by fossil fuel power plants.

Presently, there are thousands of business, local government, and educational institutions as well as individuals who are already purchasing RECs. Some of them are the U.S. Department of Energy, Environmental Protection Agency, Department of Defense, Air Force, Navy, Johnson and Johnson, Harvard University, Portland, Toyota, and FedEx.

Take advantage of renewable energy credits to purchase cheap green power and at the same time help renewable projects to develop and be technologically competitive.

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