introduction to renewable energy credits & carbon offsets
DESCRIPTION
You will learn about: Our energy & climate challenges Renewable energy credits Carbon offsets Corporate action Renewable Choice services Renewable Choice Energy is a leading provider of climate change solutions including green power, carbon offsets, and renewable energy advisory services. Recognized as a trusted partner to numerous major brands, Renewable Choice was the recipient of the prestigious Green Power Supplier of the Year award in 2012 from the U.S. Environmental Protection Agency and has been featured in hundreds of media outlets. To learn more, visit www.renewablechoice.com.TRANSCRIPT
Introduction to Renewable Energy Credits
& Carbon Offsets
Renewable Choice Services
A Partner to Leading Brands
Contents:
Our energy & climate challenges
Renewable energy credits
Carbon offsets
Corporate action
Renewable Choice services
Energy & Climate Challenges
U.S. Energy Infrastructure
Renewables: 2.5% (Biomass: 1.31%; Wind: 0.83%; Solar: 0.01%; Geothermal: 0.35%)Oil: 1.6%; Other fossil fuel: 0.5%
source: EPA eGRID2010 Version 1.1
The Problem
Problems associated with the current U.S. energy generation infrastructure:
Climate change
Air pollution and smog
Mercury in water
Toxic gases and metals in the air
Respiratory problems in children
Mountaintop removal
Global Climate Change
Source: (blue) Vostok ice core, (green) EPICA ice core, (red) Law Dome ice core, (cyan) Siple Dome ice core, (black) Mauna Loa Observatory, Hawaii
Addressing Climate Change: No Silver Bullet
• 20% wind by 2030• CO2 at 1980 levels
“Geo-Greenism"—is not only what we need to save the planet from overheating; it is what we need to make America healthier, richer, more innovative, more productive, and more secure.
Thomas Freidman, Hot, Flat & Crowded
Harness commercial and consumer demand to help drive the growth of renewable energy and clean technologies
Goal:
Renewable Energy Credits
What is a Renewable Energy Credit (REC)?
• A REC is the accepted way to track and trade renewable energy in North America
• A renewable energy source is credited with RECs as it produces electricity
• A REC represents the environmental attributes associated with the generation of electricity from a renewable energy source
• The owner of the REC receives the right to claim its environmental benefits
Renewable Energy Technologies
WIND SMALL HYDRO SOLAR
BIOMASS BIOGAS OR GEOTHERMAL
RECs and the Grid System
Renewable Energy Credits
Compliance Voluntary
One Commodity – Two Markets
Voluntary Market
• Most organizations lack the ability to install onsite renewable energy:
– Zoning restrictions
– Lack of natural resources
– Capital limitations
• RECs allow businesses to purchase grid-sourced renewable energy
The Green-e® Energy Standard
Board includes members from Environmental Defense, NREL, NRDC, and the Union of Concerned Scientists
Guarantees that RECs:• Originate from 100% new renewable facilities• Are produced in the stated calendar year• Go beyond existing government mandates• Pass a process audit by an independent certified public accounting firm
The Green-e logo helps consumers easily identify environmentally superior renewable energy options. For more information on Green-e certification requirements, call 1-888-63-GREEN or log on to www.green-e.org.
Financing a Project:The Four Legs of Wind Energy
Tax IncentivesDepreciation
Energy SalesRenewable Energy Credits
Value of RECs to Wind Projects
* Value as a percent of 20 year rate requirement
Source: John Deere Renewables
"By converting Plant Mitchell to biomass, we hope to not only help grow the renewable resource base in Georgia but also to expand the market for renewable energy credits, which ultimately will foster additional renewable energy development.“
~ Mike Garrett, President and CEO, Georgia Power
Straight From The Developer
“To any developer doing a wind farm in today’s market, renewable energy credits are critical to the revenue stream in taking a project over the top. If we do another one, it certainly will be a critical factor.”
~ Dave Osburn, Oklahoma Municipal Power Authority
“In ten years, Wind will be bigger than oil in Texas.”
~ T. Boone Pickens, Pickens Plan
“Selling of RECs makes the construction of more renewable energy generation plants possible and also makes existing renewable generation more commercially viable.”
~ Tim Swanson, Director of Origination for Florida Power & Light (FPL)
“There isn’t a single renewable facility that goes online in this country where RECs aren’t considered in the core financing.”
~ Steve Maller, John Deere Wind Energy
Voluntary Purchases are Critical
• Voluntary purchases
of RECs represented
OVER 50% of all wind
sales in 2008
• Voluntary buyers are
making as big or
bigger of an impact
as state-level
requirements
Source: Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory
Slowdown in Construction in 2010
Sources: AWEA U.S. Wind Industry Annual Market Report - Year Ending 2009; AWEA 4th Quarter 2010 Market Report
• 5,115 MW installed in 2010
• 51% less capacity installed than 2009
• 2009 was a record-setting year with
10,010 MW installed
• Constraints in capital and credit markets
impacting development
• 40,180 MW of total capacity
• Enough to power over 9 million homes
Renewables: 2.5% (Biomass: 1.31%; Wind: 0.83%; Solar: 0.01%; Geothermal: 0.35%)Oil: 1.6%; Other fossil fuel: 0.5%
source: EPA eGRID2010 Version 1.1
Renewables Remain < 2% of Generation
Carbon Offsets
What is a Carbon Offset?
A carbon offset is also referred to as a
verified emission reduction, or VER
One VER represents one metric ton of
carbon dioxide emissions avoided or
removed from the atmosphere
Purchasing VERs helps fund emissions
reduction projects worldwide
Project Types
Cap and Trade: Its Origins
Cap and Trade first addressed Acid Rain in the 1990’s
The Acid Rain ExperienceUnprecedented environmental protection at
unmatched cost efficiency • Achieved 122% of targeted
reductions
• Cost savings of $2 - $23.6
billion per year
• Demonstrated success of
market based mechanisms
Source: Environmental Defense Fund
Cap and Trade continued…
• Kyoto Protocol incorporated cap
and trade based on U.S. Acid
Rain success
• Carbon offsets are the most
efficient way for the market to
ensure cost effective reductions
• A ton of carbon is a ton of
carbon
Carbon Offsets: The Strategic Rationale
• Lowers cost of compliance• Encourages investment &
innovation in sectors not required to reduce emissions
• Provides time for regulated entities to change technologies
• Allows long-term technology development and deployment
The Role of Carbon Offsets in Kyoto
The Kyoto Protocol Expires in 2012… The world is now preparing for a post-Kyoto system
Source: United Nations Framework Convention on Climate Change (UNFCCC)
One Commodity – Two Markets
Carbon Offsets
Compliance Voluntary
Importance of the Voluntary Carbon Market
• Choice and broad participation
• Innovation and experimentation
• Social, environmental & economic benefits to
project hosts
• Economically efficient way to reduce GHG
emissions
• Help pave the way for more projects
• Improve compliance programs
Voluntary Carbon Markets Doubled Last Year
Source: New Carbon Finance, Ecosystem Marketplace
Leading Standards
• Verified Carbon Standard (VCS)
• American Carbon Registry Standard
• Gold Standard
• Green-e Climate
• Climate Action Reserve
Standards ensure that reduction projects are real, additional, verifiable and permanent, and that
offsets are retired only once
Additionality Tests
• Barriers
• Common practices
• Investment or financial
• Regulatory
• Performance
• Technology
Comparison of RECs & Carbon Offsets
How What Geography Units
RECs Help fund generation of clean power Renewable energy U.S. MWh
Carbon Offsets
Fund reduction of carbon emissions
Energy efficiencyRenewable energy Methane capture
Fuel switchingAgriculture &
Forestry practices
Global MTCO2e
Corporate Voluntary Actions
State of Corporate Activity
Source: The Conference Board, 2006 & U.S. EPA Green Power Partnership, 2008
• 75% actively measure GHG emissions
• 60% of corporate boards have carbon on agenda
• 50% have programs to reduce or offset emissions
• 15% engage in voluntary emissions trading
• 40% considering voluntary purchase
• >1000 EPA Green Power Partners
• Green Power Partners purchase >16 billion kWh of RECs annually
Corporate Motivations
• Fulfill voluntary reduction targets
• Create internal incentives for reductions
• Gain carbon market experience
• Support renewable energy development
• Prepare for regulations
• Enhance the brand
• Differentiate a product
The Corporate GHG Accounting Standard
• World Resources Institute
– Greenhouse Gas (GHG) Protocol
– The most widely used standard
– Comprehensive accounting guidelines
What is a Greenhouse Gas Inventory?
A greenhouse gas inventory is a comprehensive and documented accounting of all greenhouse gas emissions attributed to an organization’s activities
Offsetting Emissions: A Closer Look
Offsetting Protocols: RECs & Carbon Offsets
SCOPEUse of Carbon Offsets Use of RECs
About Renewable Choice?
Greenhouse Gas Inventories
Understand
• Establish an emissions baseline to understand and report
your greenhouse gas emissions
Track
• Conduct a yearly inventory to track your progress toward
a reduction goal
Reduce
• Identify carbon-intensive activities and target with
process, infrastructure changes or offsets
Renewable Choice Offset Portfolio
Renewable Energy Credits
• American Wind – Green-e® Energy
• Clean Source – Green-e® Energy
Verified Emission Reductions
• Choice Carbon• American Carbon Registry• Verified Carbon Standard• Climate Action Reserve
Business Essentials
What you get:• Dedicated Client Services Manager
• CD of images and graphics
• RCE website exposure
• Business Essentials Starter Kit– Custom certificate of purchase
– Messaging guide
– Window clings and magnets
– Custom poster
– Image library
– Facts and figures
Customized Marketing Support:
1. Determine commitment level
2. Choose a program that fits your
company’s or project’s communication &
outreach goals
3. Renewable Choice customizes the
program you choose and provides on-
going consultation and support
LEED® Green Power
4,000+
100%
Member
LEED APs
LEED® projects internationally
success rate
USGBC® & CaGBC®
on staff
4775 Walnut Street, Suite 230 . Boulder, CO 80301 . 877.810.8670 . www.renewablechoice.com
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