Renewable energy is energy that comes from non-fuel-consumption sources such as wind, sun, rain, tides, geothermal, etc. Since fuel is not burned to produce this energy, it is much more environmentally friendly. The “grid” is the vast network of cables that take electricity from the generators to the consumer. There are many different types of generators that supply power to the grid, from traditional methods such as burning coal or natural gas, to the various renewable sources.
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Some energy companies make both traditional and renewable sources available to their customers, with renewable sources tending to cost a little more that the traditional. But how does a customer who pays for the renewable know where the electricity is actually coming from that shows up at the wall plug, since traditional and renewable generators dump their power into the same grid?
Enter the “Renewable Energy Certificate.”
An REC is the right to claim the use of 1 megawatt of electricity that was produced by a renewable energy source. For instance: say you have a grid with three different source generators, coal, natural gas, and wind. Together they dump 1000 megawatts of power into the grid, but only 245 of those megawatts are supplied by the wind source. This means there are 245 REC’s available for purchase. A company that buys 100 of them will have the right to claim that they have obtained this 100 megawatts from a renewable source. That company can either use the REC’s by burning the power that they represent, or sell the REC’s to someone else. REC’s are carefully monitored and verified so that the same REC cannot be sold to and claimed by more than one entity. Upon purchase of an REC, a buyer receives a number attached to that REC which follows consecutive owners and is retired when the megawatt is claimed (used). According to the United States Environmental Protection Agency, “[T]he information conveyed by an REC allows buyers to make specific environmental claims about how their electricity is produced.”
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