Carbon Offsets or Renewable Energy Credits - Part 2

When you support projects at BuyforEarth.com you can choose the type of project you are supporting. Projects or products are of either the Carbon Offset variety or the Renewable Energy Credit variety. In an earlier article, we provide some insight into Carbon Offsets. In this article we will discuss Renewable Energy Credits.


Renewable Energy Credits
Renewable Energy Credits or Certificates or Green Tags or Tradable Renewable Certificates or...(let's just call them RECs) are proof that a renewable energy source has been used to generate 1 Megawatt-hour (1,000 Kilowatt-hours). To put that in perspective the average Utility Customer in the U.S. uses about 800 KWh of electricity in a month. You can check your utility bill to see where your average use falls.

As with Carbon Offsets, RECs are issued to the company that produces the electricity and makes it available for consumption to a utilities customers. Once the REC is issued it can be sold to offset the higher cost of producing renewable energy.

How Does Renewable Energy Credits Reduce Carbon Emissions?
In about half the states, utilities are required to provide a certain percentage of the power they provide to their customers in the form of Renewable Energy. Because of this, they must have sufficient RECs to represent the amount of green energy that they must provide. If they do not produce enough with renewable source they own, they must purchase RECs to make up the difference.

As RECs are purchased by non-utility parties, they are no longer available to 'offset' the required generation of the regulated utilities. The utilities must either produce more green energy or offer more money for the RECs, creating more incentives for independent producers to produce more renewable energy and sell the credits to the utilities.

The more renewable energy that is available to us, the less fossil fuel generation will be required to meet our electricity needs. The less fossil fuel burned, the lower the Greenhouse Gas Emissions.

The REC market should, in the long run, even the economic playing field and allow Renewable Energy Sources to be cost-competitive with fossil generation.

How many Pounds GHG emissions are Reduced when an REC is Purchased?
Tough question. The GHG emissions represented by generating 1,000 KWh of electricity is the easy answer. To determine the actual reductions we have to make some assumptions about what kind of fossil fuel is being replaced by the renewable energy generation. Typically, this would be coal or natural gas. However, these are only replaced in the long run and a diversity of renewable sources are needed to replace the reliability of fossil generation. On average the GHG output to produce 1 MWh (1,000 KWh) of electricity for generation in 2004 was:

• For Coal -- 2,189 pounds.
• For Natural Gas -- 1,140 pounds.
• All Fossil Fuels -- 1,922 pounds
  

Based on this information, the assumption of a similar mix of fossil generation being displaced by the REC would mean that GHG emissions slightly less than a ton are being reduced. Depending on where you live this number is going to be higher or lower. A good carbon footprint calculator will provide an accurate estimate of the emissions that 1,000 KWh of renewable electricity would offset. (Simply see what the carbon footprint is for you when you enter 1,000 KWh for your energy use at home.)

Which is better -- Carbon Offsets or RECs?
Carbon offsets represent a reduction in Greenhouse Gas emissions. RECs represent energy produced, that theoretically replace generation that produces GHGs. So they both have similar goals. It is all going to depend on your personal preferences. If you are also concerned with energy dependency on foreign oil, you may prefer to support Renewable energy projects offering RECs. If you want to support all reductions, Carbon Offsets may be the best choice since they include Renewable Energy and other types of Carbon Reductions. If you are price shopping you will want to compare apples to apples and convert RECs to equivalent emissions to see which is the lowest cost option for you.

Regardless of whether you choose Carbon Offsets or RECs to reduce your Carbon Footprint, remember that BuyforEarth.com will let you use your online shopping to support your favorite projects.