Energy Attribute Certificates (EAC): A Key to Tracking and Promoting Renewable Energy

As the world continues to transition toward cleaner energy sources, the need for systems that can track, certify, and validate the renewable origin of electricity has never been more important. One such system gaining traction globally is the Energy Attribute Certificate (EAC). These certificates play a crucial role in promoting transparency, ensuring compliance with renewable energy targets, and helping businesses and individuals source their energy sustainably.

EACs can be a complex topic, but in this article, we aim to simplify the concept and its significance in the renewable energy landscape.

Introduction

Energy Attribute Certificates (EACs) are a market-based instrument designed to track the environmental attributes of electricity. Each certificate represents proof that a certain amount of electricity was generated from a renewable source, such as wind, solar, or hydropower. EACs provide a means for energy consumers to verify the renewable origin of the energy they purchase, even when that energy is drawn from a common grid that also carries electricity from non-renewable sources.

These certificates serve as a valuable tool in the global push for renewable energy adoption, helping to create accountability and transparency in energy markets.

Why Energy Attribute Certificate (EAC)?

EACs are essential for several reasons:

1. Transparency in Renewable Energy Generation: As electricity flows through power grids, it often becomes indistinguishable from other forms of power. EACs allow consumers to confirm that the energy they are purchasing is truly renewable, even if it is sourced from a shared grid.
2. Incentivizing Renewable Energy Producers: By creating a market for EACs, renewable energy generators are incentivized to produce more green energy. The sale of certificates provides an additional revenue stream that can make renewable energy projects more financially viable.
3. Regulatory Compliance and Reporting: Governments and organizations are increasingly setting renewable energy targets. EACs help businesses and countries track their progress toward these goals, ensuring that they meet sustainability benchmarks and climate action commitments.

Types of Energy Attribute Certificate (EAC)

There are several different types of Energy Attribute Certificates that exist depending on the region and the specific tracking system in place:

1. Renewable Energy Certificates (RECs): In the United States, RECs are one of the most common types of EACs. Each REC represents one megawatt-hour (MWh) of renewable energy that has been generated and fed into the grid.
2. Guarantees of Origin (GOs): Used primarily in Europe, GOs are issued for electricity generated from renewable sources. These certificates are primarily used for tracking renewable energy production and consumption within the European Union.
3. International Renewable Energy Certificates (I-RECs): These certificates are used in regions outside of the European Union and North America. I-RECs help standardize renewable energy tracking in markets where no other system exists.
4. Other EACs: Several countries have their own systems for tracking renewable energy. Examples include:
   • Large Scale Generation Certificates (LGCs) in Australia
   • Renewable Energy Certificates (RECs) in India
   • Non-Fossil Value Certificates (NFCs) in Japan
   • Green Electricity Certificates (GECs) in China

These certificates are often developed as compliance instruments to meet national renewable energy targets such as Renewable Energy Target (RET) in Australia, Renewable Purchase Obligations (RPO) in India, Renewable Portfolio Standard (RPS) in China.

Different Uses of Energy Attribute Certificate (EAC)

EACs have various applications that support the clean energy transition:

1. Compliance Purpose: Many countries have renewable energy targets or mandates in place, which require utilities and corporations to source a certain percentage of their electricity from renewable sources. EACs are used as proof of compliance. For example, the Renewable Portfolio Standard (RPS) in the United States requires utilities to buy a specific percentage of their energy from renewable sources, often backed by RECs.
2. Tracking Purpose: Utilities and energy consumers use EACs to track the specific environmental attributes of the electricity they use. This provides a transparent way to understand how much renewable energy is being consumed, which is crucial for reporting purposes. For instance, the Guarantees of Origin (GO) system in the European Union helps consumers and businesses track renewable energy usage.
3. Voluntary Renewable Energy Sourcing: Global climate and energy initiatives like Science-Based Targets initiative (SBTi) and RE100 put targets on companies and supply chains to reduce their carbon footprint. These companies often purchase renewable energy, backed by EACs, to meet their voluntary renewable energy sourcing targets.

Evolution of EAC: Supporting Hourly Renewable Energy Matching

One of the latest developments in the world of Energy Attribute Certificates is the move towards hourly renewable energy matching. Traditionally, EACs were issued on a monthly or annual basis, meaning that the renewable energy generation represented by the certificate could have occurred at any time within that period.

However, this approach did not accurately reflect the dynamic nature of electricity consumption and generation. Renewable energy, particularly from sources like wind and solar, is often intermittent and variable. To address this issue, a granular EACs is being developed that supports hourly matching between renewable energy generation and consumption.

EnergyTag has introduced a Granular Certificate scheme standard for hourly renewable energy certificates, enabling more accurate matching between energy use and renewable energy generation. With hourly matching, energy consumers can buy granular EACs that correspond to the exact time periods when renewable energy was generated. This ensures that the consumer’s energy use is directly matched with the renewable energy produced at that moment, helping to increase grid reliability and reducing reliance on fossil fuels during peak periods.

This evolution represents a step forward in achieving a decarbonized energy system, enabling real-time, location-based tracking of renewable energy generation. It also encourages more efficient integration of renewable resources into the grid, supporting a more sustainable and resilient energy future.

Energy Attribute Certificates are an essential tool in the global transition to clean energy. By providing a clear mechanism for tracking and verifying renewable energy consumption, they not only help businesses comply with renewable energy mandates but also give consumers the confidence to source their energy sustainably. As the system evolves, the integration of hourly renewable energy matching will further enhance the effectiveness of EACs in supporting a green and sustainable energy future.

As we look ahead, the role of EACs will only become more critical in ensuring the widespread adoption of renewable energy, contributing to the fight against climate change and the creation of a cleaner, more sustainable world.