[PAPER TITLE]
Renewable Energy Certificates: a Patchwork Approach to Deploying Clean Energy Technologies
[David John Frenkil, Van Ness Feldman, 202-298-1867,
[David Yaffe, Van Ness Feldman, 202-298-1800,
Overview
As demand for energy in the United States will inevitably rise along with a projected population increase of over 100 million by mid-century, new electricity generation will be built throughout the country. With increased scrutiny and mandates for fossil fuel facilities at the state and federal levels, renewable energy generation such as wind, solar and geothermal are picking up pace in the US.
The deployment of these low-carbon technologies is incentivized, in part, by state regimes creating a new type of commodity called Renewable Energy Certificates (RECs). These certificates are used for the purpose of establishing compliance with state requirements for power producers to achieve a certain level of electricity generation from renewable resources. The term “REC” is typically referred to as a general concept, and this article explores important nuances in approximately 30 different REC markets across the US and explains how these differences are an impediment to the successful ramping-up of renewable energy technologies.
This paper describes the challenging regulatory framework for the promotion of electricity from renewable energy sources in the USA. While not without some success stories in specific states, the track record for renewable energy promotion in the US falls far short of the growth in renewable energy generation witnessed in several European countries such as Germany, Spain or Portugal, and the regulatory framework described in the paper is beyond doubt the single most important reason for this shortfall.
Methods
In preparation for this paper, the authors employed the following methods: interviews with industry experts; reviews of Renewable Energy Certificate transfer agreements; and research related to the historical background and study of Renewable Energy Certificates.