FAQs

FAQs 2017-05-15T10:33:26+00:00

Frequently Asked Questions

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Power Purchase Agreements

Power purchase agreements, or PPAs, are reciprocal financial relationships that exist between an electricity generator—such as a wind farm—and a dedicated purchase of the electricity produced by the generator. PPAs play a key role in financing and developing electricity projects and have been used for years by utility companies and banks. Within the past several years, PPAs have become more widely recognized as a means for consumers to gain access to renewable energy. Large-scale PPAs are an increasingly competitive and progressive way for organizations to purchase renewable energy, hedging their fossil fuel costs and meeting their sustainability goals simultaneously.
Conventional fossil fuel based electricity is notoriously unpredictable in its costs. Particularly during times of severe temperature, these electricity prices can spike, making it difficult for organizations to manage their electricity expenses.
Electricity from renewable sources like wind and solar, on the other hand, is extremely stable. Generally, once a project is completed, there is a reliable, fixed operating price for that project. As a result, by using electricity generated from a PPA, organizations can hedge their fuel costs.
Another benefit exists in the increasing grid price parity between renewable energy and conventional energy. Wind and solar prices are dropping rapidly as technology improves and becomes more efficient. As a result, these energy sources can now compete with so-called “brown power” on price. When combined with existing tax credits like the Production Tax Credit (PTC) and Investment Tax Credit (ITC), organizations are finding that they are able to save millions of dollars in electricity costs over the life of the PPA (generally 10-20 years).
There are some downside risks to a PPA that must be carefully weighed by any organization considering a deal of such magnitude. For example, there is operational risk: a project may not get built, or, it may not produce the volume of renewable energy that was forecast. In that situation, an organization may have lost valuable time and opportunity in securing a PPA with a failed project.
One of the compelling reasons to work with an advisory agency like Renewable Choice is to have guidance through the PPA process in order to openly weigh all the risks and opportunities. As a partner, Renewable Choice not only provides unparalleled access to the top projects in the country, but is also keenly aware of both upside opportunities and downside risks, and can advise you accordingly.

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Energy Attribute Certificates

Renewable energy facilities like wind and solar farms generate what are known as energy attribute certificates (EACs), when they produce electricity, in a 1:1 ratio.  EACs is an umbrella term that covers the most common types of these certificates: renewable energy certificates (RECs), Guarantees of Origin (GOs), and international RECs (I-RECs).  EACs are the globally accepted way to track and trade renewable energy. EACs represent the added value, environmental benefits, and cost of green power above conventional, carbon-dependent methods of producing electricity. They are used by utility companies to achieve their renewable portfolio standard (RPS) goals and are used by thousands of organizations to meet their green power commitments.

For most organizations, the direct acquisition of renewable energy is challenging. For example, permitting issues or expense can interfere with the implementation of onsite solutions like solar panels. As a result, most organizations turn to EACs in order to address the greenhouse gas emissions associated with their electricity consumption, known as Scope 2 emissions under the Greenhouse Gas (GHG) Protocol.

EACs are the best way an organization can ensure that it is purchasing green power, because it’s impossible to distinguish one electron from another. We like to use the analogy of a bathtub: turn on a coal tap, a nuclear tap, and a wind power tap, the tub still fills up with water. Once those electrons join the grid, there’s no way to separate where they came from or how green they are. Purchasing EACs in the same quantity as an organization’s electricity consumption guarantees that the energy used has been added to the grid from a renewable source.

EACs allow consumers to make a product choice in the electricity market when they are otherwise unable to do so. EACs ensure that the amount of electricity an organization uses is added to the power grid from a renewable energy facility. They are the so-called “proof” of green power generation. Organizations that use green power from Renewable Choice can be assured of the validity of their purchase because we only sell certified EACs.

Yes! Not only do EACs convey the environmental attributes of the clean generation they were created from–which helps organizations reduce the emissions of their purchased electricity, and potentially make a claim of zero carbon electricity–they also provide critical market indicators that can result in increased demand for new renewable generation.

Every megawatt hour (MWh) of EACs that we sell at Renewable Choice is verified by Green-e® Energy in the United States, EcoLogo™ in Canada, or by a variety of growing international agencies, including GoldPower®. The Green-e program is administered in the U.S. by the non-profit Center for Resource Solutions.

Each year, we complete audits to disclose the quantity, type, and supply source of all of our EACs to ensure their reliability. This process also guarantees that we have retired all the EACs that we’ve sold, meaning that the EACs have not been sold more than once or claimed by more than one party. Maintaining this chain of custody so that our customers can be certain of the environmental attributes of the EACs they purchase from Renewable Choice is of utmost importance to us.

EACs convey many direct and indirect benefits to organizations. These benefits include, but are not limited to:

• Accounting for an organization’s Scope 2 emissions in its overall carbon footprint
• Reducing dependence on fossil fuels and securing domestic sources of energy production
• Stimulating economic growth in emerging markets and creating renewable energy jobs
• Strengthening revenues in local communities where renewable energy projects are located
• Improving air quality and human health and safety by reducing pollution
• Creating a socially responsible brand that is attractive to customers and other stakeholders

Learn more about how EACs can benefit your organization.

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Carbon Offsets

A carbon offset, or verified emission reduction (VER) is a counterbalancing mechanism used to ensure that a metric ton of carbon dioxide equivalent (CO2e) is removed from the atmosphere or prevented from entering it. VERs are valuable in helping organizations achieve reductions in emissions that come from sources other than purchased electricity, such as business travel.

Offsets like the VERs that are sourced by Renewable Choice come from a variety of projects around the world that are working to reduce atmospheric emissions, either through the process of removing those emissions via carbon sequestration, or by preventing them from entering the atmosphere through incineration.

Sequestration is the process of sinking carbon dioxide into plant matter. For example, forestry is considered a method of carbon offsetting because trees act as a carbon sink, removing excess carbon dioxide from the atmosphere.

Incineration occurs when other greenhouse gases (GHGs), such as methane (CH4) are captured and flared in order to prevent them from entering the atmosphere. This is important because methane and other GHGs are actually more damaging than carbon dioxide. When the methane is burned, it results in carbon dioxide and water.

By purchasing carbon offsets and removing damaging GHGs from the atmosphere, organizations can help reduce the overall impact of their business activities.

The Greenhouse Gas Protocol separates emissions into three different categories, or scopes.

Scope 1 emissions are generated from combusting fuel onsite, for example, to generate heat or operate a boiler. In this case, the organization can exercise greater control over the amount and type of fuel used. Carbon offsets are the appropriate mechanism for neutralizing these activities.

Scope 2 emissions result from purchased electricity, and are considered indirect emission sources. Organizations can best reduce the impact of these emissions by purchasing green power, or renewable energy credits.

Scope 3 emissions are other indirect emission sources such as business travel, employee commute, emissions from landfill waste, and those emissions within the supply chain. Again, organizations should use carbon offsets to neutralize these emission sources.

Increasingly, organizations are setting aggressive sustainability goals to help them save money, reduce the impacts of climate change, and act as responsible global citizens. Carbon offsets can be a useful way for organizations to accomplish their carbon neutrality goals.

Many carbon offset projects also tell an important story. For example, one of the projects we work with at Renewable Choice is fuel switching, encouraging women in indigenous cultures to exchange their wood burning stoves for cleaner burning natural gas. While natural gas is still a fossil fuel, it emits less carbon dioxide and particulate pollution, keeping the families that make this switch healthier.

All of the carbon offsets sold by Renewable Choice are registered and retired with one of several highly legitimate carbon registries, including Climate Action Reserve (CAR), the Verified Carbon Standard (VCS), and the American Carbon Registry (ACR). These programs provide exceptional consumer protection to ensure that the offsets that you purchase from Renewable Choice have not been sold more than once or claimed by more than one party. Maintaining this chain of custody so that our customers can be certain of the environmental attributes of the carbon offsets they purchase from Renewable Choice is of utmost importance to us.

Learn more about how carbon offsets can help reduce your organization's emissions.

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International Clean Energy

Around the world, countries are responding to the demand for cleaner energy by creating products that allow buyers to reduce their greenhouse gas emissions.  Simply, these products can be grouped into three categories:

Power Purchase Agreements—Power purchase agreements (PPAs) allow buyers to enter into contracts directly with renewable energy generators to source their electricity, often at a competitive, or even lower, rate than conventional fossil fuel-based electricity.  In emerging international markets like Mexico and India, these agreements are become more and more common because they do not face the same restrictions that they do in the U.S.  For example, deals can be done anywhere in Mexico, and in India, deals as small as 1 megawatt can be executed.  PPAs allow buyers to lock-in the competitive electricity price, which offers protection against volatile and unpredictable energy markets.

Energy Attribute Certificates—Energy attribute certificates (EACs) are tradable certificates that represent the environmental attributions of renewable energy generation.  In North America, these certificates are called RECs, or renewable energy certificates.  In the European Union, Guarantees of Origin (GOs) are used.  In emerging markets around the world, where credible verification schemes don’t currently exist for EACs, the I-REC has been developed.  Typically, EACs are created in a 1:1 ratio when renewable power is generated.  When paired with purchased electricity, EACs allow buyers to claim that they are using renewable energy, and, in many cases, that their Scope 2 emissions are zero.

Carbon Offsets—Carbon offsets represent greenhouse gas emissions that have either been prevented from entering the atmosphere or eliminated from the atmosphere.  They are used as a mechanism to counterbalance unavoidable sources of emissions such as business travel, as the buyer can match their purchase of carbon offsets to their Scope 1, Scope 3, and, in some cases, Scope 2 emissions to potentially achieve carbon neutrality.  Credible carbon offsets that are registered with one of several agencies are also considered to possess additionality, meaning that they displace actual emissions and directly impact climate change mitigation efforts.  Carbon offsets are sourced from a variety of global projects in the areas of agricultural gas capture, landfill gas capture, forestry, and fuel switching, among others.

Most large companies today have a global footprint, either through their supply chain or directly through their own operations.  PPAs, EACs, and carbon offsets can help to address the emissions associated with that footprint.

Reporting bodies, such as CDP, also evaluate a responding organization on the action taken to reduce climate impact, particularly the Scope 2 emissions associated with purchased electricity.  New requirements from the Scope 2 GHG Protocol guidance requires that companies report both their actual consumption of electricity (location-basis) as well as their use of mechanisms—known as contractual instruments—designed to reduce the emissions of that consumption (market-basis).  Contractual instruments must be paired with the electricity consumed based on grid region, which makes the need for EACs in international markets imperative.

The use of products sourced directly from a variety of geographic regions also carries co-benefits for those regions in which companies have license to operate, such as improved air quality, which in turn improves human health outcomes.

Finally, many regions offer cost-competitive, or even cost-saving, products with greater flexibility than North American markets.

Sequestration is the process of sinking carbon dioxide into plant matter. For example, forestry is considered a method of carbon offsetting because trees act as a carbon sink, removing excess carbon dioxide from the atmosphere.

Incineration occurs when other greenhouse gases (GHGs), such as methane (CH4) are captured and flared in order to prevent them from entering the atmosphere. This is important because methane and other GHGs are actually more damaging than carbon dioxide. When the methane is burned, it results in carbon dioxide and water.

By purchasing carbon offsets and removing damaging GHGs from the atmosphere, organizations can help reduce the overall impact of their business activities.

Renewable Choice sources only the highest quality PPAs, EACs, and carbon offsets from around the world.  We work with a number of verification bodies—including Green-e®, EcoLogo®, and GoldPower®, among others—to ensure that the products we sell are certified.  This also prevents any double-counting of these products, which can reduce their effectiveness and invalidate buyer emission reduction and marketing claims.
Renewable Choice has more experience than any other firm working today on clean energy transactions.  For 15 years, we have pioneered commercial clean energy products and services, and have been consistently recognized for our efforts by agencies such as the U.S. Environmental Protection Agency.  Renewable Choice has unparalleled access to global markets, allowing us to provide custom sourcing options for all our clients, regardless of geography or product type/technology.  Our in-house team of industry experts understand the nuances of commercial clean energy purchasing and can provide our clients with value, credibility, and the characteristic customer service that sets us apart from our competitors.

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Green Buildings

LEED stands for Leadership in Energy and Environmental Design and is a green building certification process developed by the U.S. Green Building Council (USGBC). LEED certification provides independent verification that a building was designed using green strategies and standards.
Even the most energy efficient buildings consume energy from an infrastructure that is detrimental to the environment. The LEED Energy and Atmosphere Green Power Credit allows projects to choose renewable energy–in the form of energy attribute certificates (EACs)–and carbon offsets, earning up to seven LEED points toward certification while simultaneously reducing a projects environmental impact. Over time, the USGBC has weighted more and more points toward the Green Power Credit.

Get points toward your project's certification today.

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