With Vermont on a path to 100% renewables by 2035, it’s time to refine how we measure renewable energy purchases in order to speed up the process of decarbonizing the electric grid.
Because there is no way to differentiate an electron in the grid that’s generated by a solar array versus an electron from a natural gas plant, utilities are required to turn in, or “retire,” Renewable Energy Credits (RECs) to get credit for the electrons that come from renewables. RECs are essentially an accounting tool that allows utilities to demonstrate that they are meeting their renewable energy purchasing requirements.
However, since a utility can purchase a REC from a renewable generator without using the power it produces and can save a REC for three years before taking credit for it, RECs can mask the purchase of electricity generated by burning fossil fuels in real time. In practice, this means that utilities can purchase electricity from oil and gas plants, then turn in a REC from wind, hydro, or solar power generated weeks, months, or even years beforehand and still be considered 100% renewable at year’s end.
As a result, the current REC system can overstate how quickly we are decarbonizing. This is particularly true during heat waves (see figure below left) or cold snaps (below right) when the majority of our extra electricity purchases are generated by burning natural gas or oil, A 2019 paper published by professors from Stanford University’s School of Sustainability and Department of Energy Science and Engineering found that if solar reaches 25% of annual energy mix, current REC accounting practices can overstate emissions reductions by up to 50%.
While RECs have been incredibly important in accelerating the deployment of renewables, it is time to move toward stricter REC retirement rules that further reduce our consumption of electricity from fossil fuels. REV is working on a proposal to study the emissions reductions from moving from the current REC accounting practices to a system that would require RECs to be retired in the same season or even the same hour that they are produced (sometimes called 24/7 RECs accounting). This would lead to more real-time purchases of renewables or energy generated by renewables and stored in battery systems.
Moving away from an annual accounting of RECs will allow Vermont to gauge the climate impact of its electricity purchases more accurately and further spur the deployment of new wind, solar, and energy storage systems.