Energy Attribute Certificate FAQs

• EAC products vary by country, region, and state, and each renewable energy market has its own qualification requirements. EACs can be created from almost all renewable generation, but the EAC’s value is determined by its eligibility for specific markets depending on technology, location, generation period, etc. 
• To avoid disputes over environmental benefit claims and to allow ownership to be transferred, RECs are typically tracked in electronic tracking systems. These databases assign a unique serial number to each REC based on generation data provided by the renewable facility. Tracking systems typically record the renewable facility location and owner, technology and fuel type, commercial online date, and the month and year the associated MWh was generated. As tracking systems are a requirement of many state RPS programs, it is beneficial for renewable generators to register their facilities. 3Degrees works with a variety of tracking systems and can accommodate facilities across the U.S.

• In order to register an EAC, the renewable energy operator has to apply to the EAC Register. Once that’s approved, they’ll receive an EAC for every MWh that is produced. The EAC Authority then goes through a verification process, prior to adding the EAC to the registry and issuing a certificate. 
• After an EAC is registered, the EACs have a maximum life cycle that varies for different certificates and markets, and there are a couple of things that can be done—one, the EAC can be transferred, or purchased, by a buyer, and two, the EAC can be canceled, expired, or withdrawn, and deleted from the registry. Both of these actions will effectively retire the EAC as it can no longer be sold from the registry.

• There is no difference. The terms are interchangeable, so renewable energy certificates are also referred to as renewable energy credits.

As RECs only cover North American markets, many buyers must look beyond RECs to meet their energy needs:
First, we will touch on what they often refer to as the European equivalent to North American RECs, guarantees of origin (GOs or GoOs). A GO represents the environmental attributes associated with one MWh of energy produced from a specific resource – this is not limited solely to consumption of renewables, but all types of energy. Over 25 countries in Europe can purchase GOs from the list of Association of Issuing Bodies (AIB) members, and are governed by the European Energy Certificate System (EECS).
GOs are issued by the competent national authority to each renewable energy producer that owns eligible power plants. Since GOs represent all types of produced energy, a renewable energy guarantees of origin (REGO) shows that electricity has been generated from renewable sources. Typically, electricity suppliers will use REGOs to show consumers the proportion of renewable electricity they have been given.
International renewable energy certificates (I-RECs) represent transferable proof that one MWh of electricity was produced from renewable energy sources—wind, solar, ocean energy, biomass, hydropower, landfill gas, aerothermal, geothermal, and landfill gas projects—and added to an electrical grid. I-RECs grant corporate buyers in over 30 countries a credible tool to support renewable energy.
Tradable instruments for global renewables (TIGRS) are generally used in Asia and Central America and are exchanged on the tracking and trading platform for global EACs, called the TIGRs Registry. Typically, I-RECs are also used where TIGRs are available.
Large-scale generation credits (LGCs) are used to comply with Australia’s renewable energy target, and represent the generation of large-scale solar, wind or hydroelectric projects.
Used in Japan, J-Credits are tradable emission reduction instruments recognized for renewable energy claims by the CDP and RE100 when issued from qualifying facilities.
Another EAC used in the Japanese renewable market are Feed-in-Tariff Japan non-fossil value certificates (FIT NFCs). FIT NFCs are issued for all grid-injected renewables receiving the Japanese feed-in tariff, including solar, wind, small and medium hydropower, geothermal, and biomass. FIT NFCs are traded at quarterly auctions on the Japan Electric Power Exchange (JEPX).
New Zealand Energy Certificate System (NZECS) is a recently established option that helps companies operating in New Zealand go the extra mile to reach their renewable energy targets.

Entities can buy directly from energy producers, traders, brokerage platforms, or national auctions.

• Renewable energy producers, project developers, licensed wholesale retailers like 3Degrees, or anyone with rights to the EACs from a renewable asset (sometimes small business owners or even individual residences) are able to sell environmental commodities like RECs and other EACs. 

• When a REC is sold together with the underlying energy, it is called a bundled REC. Unbundled RECs are sold separately from the underlying energy, so the power is not being directly consumed by the purchaser. 

• EACs make it possible for entities to make reliable claims about their energy usage. They play an important role in tracking and assigning ownership to renewable electricity generation and use. Since electricity is not tangible and tracing specific electrons through the grid is not possible, it is important to use EACs as an accounting instrument to certify the factual characteristics of how, where, and when a MWh of electricity was produced. Standards bodies like the Center for Resource Solutions define baseline criteria for renewable energy generation, which adds value to RECs that qualify for certification. Clear, credible REC and EAC specifications support a robust voluntary market. 
• There are additional labels that can inform purchasers about the quality of the EACs, beyond what is legally required in verification compliance. An assortment of labels exist across global markets, which include third party audits, verified social impacts, and verifiable environmental protection criteria. 
• Examples of third party standards that independently audit EACs are Green-e^® and EKOenergy. These labels verify the chain of custody for EACs to ensure that only one customer claims credit for the renewable energy and environmental attributes created. Eco labels often record the type of power plant, the vintage, project site, technology used, and its unique operational focus. Green-e^® is the most stringent and widely used voluntary REC certification program in the U.S. that sets buyer protection and environmental standards for REC products. EKOenergy is an internationally recognized, nonprofit eco label for renewable electricity, gas and heat. Consuming renewable power that meets national or international standards is imperative. 

• After renewable energy is generated, two products are created—the actual energy that will be added to the grid and the environmental attributes of that energy. These are often sold separately. If someone is claiming use of the renewable energy, then they must have contractual proof that they own the renewable energy attributes associated with the generation, which takes the form of a REC or an EAC. The owner of this REC or EAC can then make a statement that either implicitly or explicitly communicates use of the renewable energy, or a “claim” on that renewable energy.
• The claims that you can make will vary based on your renewable energy purchase, but the seller that you work with can help guide your marketing claims.
  Some common renewable energy claims are:
  “By installing solar panels we have reduced our carbon footprint.”
  “Our product is manufactured using 100% renewable energy.”
  “In order to achieve our renewable energy goals, we purchase energy attribute certificates from Wind Farm X.”

For a full overview of the Dos and Don’ts of Marketing Your Renewable Energy Purchase, review our whitepaper.

• Corporations and individuals will have different motivations for purchasing RECs and global EACs, and there are many factors that should be considered when making a purchase. Some of these are: 
  • Location: How close is the renewable energy project to where the electricity is originally generated?
  • Technology: What type of renewable resources are generating the environmental attributes?
  • Environmental attributes: Whether there are avoided emissions benefits along with the renewable energy itself.
  • Co-benefits: If the project provides benefits outside of the environmental attributes, such as job creation.
• Then there are other considerations that have more to do with regulatory and reporting value, like what registration system is used to track ownership and avoid double counting; regulatory interaction of the environment where the renewable energy is being purchased; reporting value and whether platforms and certifications require certain criteria of the EACs to be met; and if the EACs meet the criteria for the U.N. Sustainable Development Goals (SDGs).

• In a voluntary market, there is no requirement to purchase renewable energy, and typically organizations, businesses, and utilities purchase these in order to reduce their footprint and make environmental claims.
• In a compliance market, government regulators set targets, or Renewable Portfolio Standards (RPS). This means that the RECs have to be purchased and reported on in compliance markets in order to meet those targets.

• The AIB is the Association of Issuing Bodies, which is a European organization that uses and promotes a standardized system of energy certification, used for issuing, trading, and canceling GOs, called the “European Energy Certificate System” (EECS). At the end of 2021, the AIB had members from 27 European countries with an aim to unite all European energy attribute tracking systems.
• Trading of GOs can easily occur between AIB countries without the risk of double claims or counting. While trading can occur between non-AIB countries, it’s not advised, as you don’t have the same assurances you would when trading with an AIB country. The AIB continues to add new countries to its registry each year.

• Disclosure, as it relates to renewable energy, is public reporting of consumed electricity that is verified by an EAC. In the REC market, you can voluntarily disclose by reporting your electricity usage to various standards like CDP, RE100, and others. Or you may be required to release this information through a compliance disclosure.
• In Europe, there is typically a requirement of a compliance disclosure so that consumers can review the seller’s electricity usage. 
• The primary deadline for most countries is March X + 1 of production year X, however, some countries have different deadlines. For instance, the deadline in the UK is June X + 1 of a production period from April X – March X + 1, while Germany is October X + 1 of production year X.