What is a REC?
A REC (pronounced: rěk) represents the property rights to the environmental, social, and other non-power qualities of renewable electricity generation. A REC, and its associated attributes and benefits, can be sold separately from the underlying physical electricity associated with a renewable-based generation source.
RECs provide buyers flexibility:
- In procuring green power across a diverse geographical area.
- In applying the renewable attributes to the electricity use at a facility of choice.
How do RECs work?
All grid-tied renewable-based electricity generators produce two distinct products:
- Physical electricity
As renewable generators produce electricity, they create one REC for every 1000 kilowatt-hours (or 1 megawatt-hour) of electricity placed on the grid. If the physical electricity and the associated RECs are sold to separate buyers, the electricity is no longer considered “renewable” or “green.” The REC product is what conveys the attributes and benefits of the renewable electricity, not the electricity itself.
RECs serve the role of laying claim to and accounting for the associated attributes of renewable-based generation. The REC and the associated underlying physical electricity take separate pathways to the point of end use (see diagram). As renewable generators produce electricity, they have a positive impact, reducing the need for fossil fuel-based generation sources to meet consumer demand. RECs embody these positive environmental impacts and convey these benefits to the REC owner. The following is a list of the inherent primary and derived attributes that a REC can convey to an owner:
|Primary REC Attributes||Derived REC Attributes|
- REC contracts and an audit of the chain of custody
- REC tracking systems
The following documents provides greater detail on issues related to this Web page.
Emerging Markets for Renewable Energy Certificates: Opportunities and Challenges – National Renewable Energy Laboratory NREL/TP-620-37388, January 2005 (PDF) (69 pp, 1.5MB, About PDF). This report describes how RECs are marketed; examines RECs markets, including scope and prices; and identifies and describes the key challenges facing the growth and success of RECs markets.
Renewable Energy Certificates (PDF) (6 pp, 996K, About PDF). This white paper provides a brief overview of renewable energy certificates (RECs): what they are, how they work, and why they are an important option for individual and organizational buyers in renewable electricity and green power markets.