Green energy is one of the most consistently salient political, economic, and environmental issues of our time. Scientific understanding of negative environmental impacts caused by economic development has increased over the last two decades. This has led to a corresponding increase in public concern for the protection of natural resources. New forms of regulation have been developed in response to these worries. Regulation inherently increases development costs, so balancing environmental concerns with the need for continued economic growth is a challenge.
In order to improve the feasibility of green electricity sources, new financial instruments have been developed to combat the rising costs of energy production. Perhaps the most well known of these commodities is the carbon offset. An offset is simply the reduction or avoidance of one metric ton of carbon emissions. Less well-known is another innovation: Renewable Energy Certificates RECs are instruments that represent 1 Megawatt-hour of renewable energy generation.
Renewable Energy Certificates
Similar to offsets, RECs can be traded on the market. What these two instruments represent is the primary difference between them. Offsets represent a reduction of emissions. RECs represent the production of one megawatt-hour of electricity from a green energy source such as hydro, wind, solar, or nuclear.
Once energy produced enters the shared electricity grid, it cannot be distinguished form electricity generated from carbon-based sources. RECs effectively tag energy allowing it to be tracked. Energy companies and other firms can purchase RECs to meet regulatory requirements for green energy use. For example if New York requires 24% of its energy to be sourced from renewable plants but their power plants primarily use natural gas, New York energy firms can purchase RECs to meet their regulatory requirement.
Washington State is a Green Energy leader
According to the Department of Energy, Washington produces 92.25% of its energy from renewable sources. Washington is one of only eleven states that produces over 80% of its energy from renewable sources, ranking tenth in the nation with 92.25%. Most of this is produced from hydroelectricity, with the rest coming from wind turbines and biomass.
You Can Do Your Part
Individuals and businesses can purchase RECs from various marketplaces in order to support green energy. Often nonprofits facilitate this practice listing firms that sell RECs for residential or commercial use. These RECs are certified independently. Once the REC has been used, it is retired from circulation so it cannot be claimed again.