This is the fourth in a series of blog posts about renewable energy options for retailers.
As retailers look to reduce their environmental footprint and grow renewable energy investments, RILA continues to hear from our members that understanding the ever-changing renewables procurement landscape can be challenging. That's why we are developing a new renewable energy guide, which highlights fundamentals of different procurement options and key considerations, specifically for retailers.
In a series of blog posts, we'll be outlining various topics featured in the guide; the fourth in our series, Renewable Energy Credits, is outlined below. We are excited to share the chapters one by one, and to work with partners like Schneider Electric in their development.
What are Renewable Energy Credits (RECs)?
Renewable energy credits and similarly Energy Attribute Certificates are how renewable energy is tracked and traded. Companies that voluntarily purchase green power use RECs to make claims to the clean energy generation they represent in the market. Despite generating less revenue compared to other models like power purchase agreements (PPAs) or direct ownership, RECs provide valuable market signals for renewable energy development and carbon reduction goals.
Who uses them/What are the key benefits?
Renewable energy credits are affordable, flexible, and highly credible. They are ideal for companies that would like a simple solution to reducing their carbon footprint and meeting renewable energy goals.
If retailers are constrained by leasing restrictions, need to meet their carbon reduction goals, and want geographical flexibility, RECs are a better option when compared to offsite or onsite PPAs, although RECs are often used in combination with these other systems.
Kohl's Department Store is a leader in REC purchasing. The company has been a consistent leader on the U.S. Environmental Protection Agency's Green Power Partnership list, and purchases enough RECs annually to address nearly 100% of the company's total electricity load. In addition, retailers such as Walmart, H&M, and REI all use RECs to attain and sustain their renewable energy goals.
Are Renewable Energy Credits right for you?
Ready to move forward with Renewable Energy Credits?
Like any renewable energy initiative, engaging company stakeholders is crucial to get buy-in and ensure there is a thorough understanding of the deal structure, benefits, risks, and implementation. Stakeholder groups that should be involved include sustainability and purchasing. Prior to moving forward, the key is to identify short-term or long-term goals around sustainability, carbon reduction, and renewable energy acquisition for your company's needs.
Learning from other companies is a valuable tool in helping shape the company's overall strategy and decision. These approaches can be found by reviewing the Green Power Partnership of the U.S. Environmental Protection Agency (EPA).
Renewable energy credits can be purchased from many sources including open commodity markets, energy brokers, and third-party providers such as Schneider Electric or 3DegreesTM. To learn more, download Schneider Electric's Definitive Guide to Global Energy Attribute Certificates or the World Resources Institute's (WRI) Bottom Line on Renewable Energy Certificates.
To learn more about Renewable Energy Credits, if they're a viable option for your company, and next steps for moving forward, access the full chapter in the renewable energy guide here and all the chapters published so far here. For more information about RILA's renewable energy initiatives, contact Erin Hiatt.