Renewable Energy Certificates - Buying Guide for Oregonians
Posted on March 25, 2020 by Will Gehrke
Tags, Energy
Many Oregonians support renewable energy and there is considerable demand for green electricity. But if your home is connected to the utility grid, it is not possible to ensure that the electricity you use is generated only from wind, solar, and/or hydropower.
This is a frustrating problem for many electricity customers but it is the reality of electron flow. A few words on electrons, and then I’ll turn to Renewable Energy Certifications (RECs) and their role in meeting the green electricity interests of residential customers.
Electrons from renewable energy run along the same paths as electrons generated from coal or hydropower generators. Also, electricity is generated instantly so there is supply to meet demand. In Oregon, three private or investor owned electric utilities (Idaho Power, Pacific Power, and Portland General Electric (PGE)) use a mix of hydroelectric, coal, gas, wind, solar, and geothermal energy to meet load. This means that the power flowing from the electric grid to your home is a mix of green and brown power and it just isn’t possible to track only the flow of green power.
To meet customer demand for green power, however, a market for Renewable Energy Certificates (RECs) has emerged over the past two decades as more and more US states have adopted Renewable Portfolio Standards.
RECs are certificates that track one megawatt-hour (MWh) of electricity from green generating sources (wind, solar, geothermal, and hydroelectric). A single REC represents the environmental benefits associated with a MWh of green energy. The average residential customer in Oregon uses ~909KWh of energy in a month, which is 91KWh less than a MWh. Customers are able to purchase RECs equivalent to their annual usage and legitimately claim to have used green power. REC accounting is helpful because as explained above, it is physically impossible to only purchase electrons from green resources.
Renewable energy credits create two value streams for renewable generation owners. The first value stream is the value of the electricity, and the second is the value of the REC. The REC market provides additional revenue to the renewable generation owner. By purchasing RECs, the purchaser is providing a subsidy to renewable generation.
As an individual customer, though, how can I purchase RECs to offset my electricity usage?
Idaho Power, Pacific Power, and PGE offer voluntary REC programs. The main advantage of these programs is that RECs are automatically purchased based on your monthly usage. Enrollment for these programs is available on each utility’s website.
Here is a summary list of Oregon’s three investor-owned electric utilities’ REC programs as of March 2020:
- PGE: Green Source program – Cost per KHh: $0.008
- Pacific Power: Blue Sky program – Cost per KWh: $0.0105
- Idaho Power: Green Power program – Cost per KWh: $0.01
Customers looking for an alternative to using a utility managed program can purchase RECs through the Oregon based Bonneville Environmental Foundation. Unlike the utility run programs, the Bonneville Environmental Foundation requires customers to purchase RECs in a 1MW block. As of March 2020, the price of a Bonneville Environmental Foundation REC is $8 per MWh, which is equal to a per unit cost of $0.008 per KWh. This option is cheaper than Idaho Power’s and Pacific Power’s REC programs, but is less convenient.
Among all US states, Oregon has an unusually high number of residential electricity customers who care deeply about where their energy comes from, and are actively interested in supporting resources that are efficient and environmentally friendly. We hope that this primer and guide provides a few tools to help you make these decisions.
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03/25/20 | 1 Comment | Renewable Energy Certificates - Buying Guide for Oregonians