Plus, How You Can Better Reduce Your Carbon Footprint.
You’re searching for a new energy supplier. You come across one of the leading firms, which brags about its efforts to offer green energy to their customers. You obtain a few electric rates, one for regular energy and one for “100% green energy.” For just a penny or two more per kWh, the company assures you that “100% of your energy will be supplied from renewable energy sources.”
But what do they really mean? Is this even possible? Where is that extra penny going?
Unfortunately, if your goal is to buy renewable energy, the answers to these questions may not reassure you.
Once energy is pumped onto the grid, whether it comes from a renewable energy plant or a fossil-fuel plant, it becomes one single flow of electrons. It is impossible to differentiate where each electron came from. Even if you sign up for the “100% green power” option and your neighbor signs up for the “regular power” option, the electricity flowing into your homes is identical and is composed of the same share of renewable and non-renewable energy. So then what’s the difference between the “100% green power” option and the regular option?
When you buy your “100% green” electricity, what you’re really buying is the same exact electricity as before, bundled with a Renewable Energy Certificate (REC). For each unit of electricity (1 MWh) that a renewable energy power plant produces, it also produces 1 REC. The renewable energy power plant is reimbursed directly for the energy going to the grid, and then again when you purchase the “REC” from them. The idea is that the additional income stream of RECs will make renewable energy power plants more financially competitive with fossil-fuel power plants, providing an incentive for new renewable energy development. You can then legally claim that you are “purchasing renewable energy.” So then, what’s the problem?
The impact that RECs sold with “100% green power” options have on renewable energy development is widely considered uncertain. In most markets, the RECs that you obtain when you buy your “100% green power” from the electric company are simply too little and too unreliable to provide the millions of dollars needed to be the “difference-maker” for the development of a renewable energy power plant. Renewable energy developers will generally “not recognize REC revenue in their financial decision unless a contract is in place with a creditworthy counter-party” (NREL). These contracts are usually long-term and for huge quantities of RECs, most often with government bodies.
In some situations, RECs can have a significant impact on renewable energy development financials. However, the RECs in these markets are typically far more expensive than the ones being purchased on your behalf with “100% green energy” products. For example, a 100MW wind project in Wyoming reported that REC sales contributed just 1% of the plant’s revenues (NREL). This plant represents a typical renewable project that RECs are purchased from, even if you’re a customer in New York or Texas. Generally, you get what you pay for in energy.
So then, how do you green up your energy supply? The first and most obvious choice would be to install solar panels on your roof or a wind turbine in your backyard to directly switch your energy supply to a clean, renewable resource. However, this isn’t possible for everyone. The next choice would be to purchase carbon offsets to cover your energy consumption from reputable vendors for projects actively working to sequester carbon dioxide, capture methane, or install pollution controlling devices. You can use this calculator to convert your kWh usage to metric tons of carbon dioxide.
Some good sources of carbon offsets:
Most people, given a choice at a comparable price, would like to support renewable energy and the environment in their daily purchases. However, there are plenty of companies willing to utilize misleading marketing schemes that oversimplify and misrepresent renewable energy products, even if the descriptions are legally accurate.
At Global Energy, that’s not our goal. Our goal is to support carbon dioxide emissions reduction, renewable energy development, and environmental stewardship directly and substantially. That’s why we’ve made the decision to make our green energy products carbon-offset based. No tricks, no misleading marketing tactics, no dishonesty. These principles are fundamental to our corporate culture and we don’t plan to abandon them at any point.