Renewable Energy Certificates (RECs), Carbon Offsets & Green Building Certification
Countries all over have taken steps to drastically reduce their Greenhouse Gas output in an effort to tackle climate change. Canada, in particular, has committed to increasing its share of clean electricity to 90% by 2030 without sacrificing economic growth. Whether you want to meet your national or provincial obligations to reduce your emissions or voluntarily commit to a more sustainable business model, EnergyRates.ca can help you find the most suitable option for your business and information so you know you’re making the right choice. You can fill out the form above to get started, or continue reading if you’d like to learn a bit more.
Why you should choose Green Energy Today
Let’s see… where do we start? It’s good for the planet—which is currently warming and threatening our ability to maintain a hospitable environment. If you’d like a more practical reason as well, an over-reliance on finite resources also makes it difficult to pivot when prices spike, making your business (and the economy at large) vulnerable to price fluctuation.
Green energy isn’t just a purchase for today, but an investment in tomorrow. When you make a purchase, you’re providing funds for the infrastructure required to continue to operate and be competitive within the market. Customers are also willing to support companies that they know are putting in the effort to become sustainable. If you choose to aim for your BOMA or LEED® certifications, or if you just hope to reduce a percentage of your carbon footprint, publicizing your plans to purchase is a great step to ‘green’ your branding and give you a leading edge.
Option 1: Carbon Offsets
Plenty of a business’ operations are carbon negative—midstream, transportation or industrial processes, for example. For those that are concerned about the size of our business’ carbon footprint but find it impractical to fully curb emissions, you might consider purchasing offsets. They allow greater flexibility to manage and mitigate your climate impact by funding carbon offset projects or by reducing your reliance on polluting activities.
What are Carbon Offsets?
Carbon Offsets (or Greenhouse Gas Offsets) is a commodity that you can purchase as a counterweight your emissions. One Offset is equivalent to one metric ton of carbon dioxide (CO2e) absorbed or prevented from release. The offsets you purchase can be generated from a variety of sources. Some aim to be carbon-negative and absorb more carbon than they emit; others aim to accomplish the same task without heavy reliance on fossil-fuels, like treating water with chlorine in lieu of boiling it.
Carbon Absorption projects— such as reforestation or carbon capture programs— absorb carbon from the atmosphere and store it. Co-generation plants use wasted heat to generate additional electricity in lieu of fossil fuels, which reduces your reliance on these resources.
Some businesses with large emissions, like those in the airline industry, directly purchase Carbon Offsets that they then sell to individual customers. However, carbon offsets are typically traded among large consumers and industries that rely heavily on fossil fuels due to the sheer amount of emissions involved. Offsets offer a way for those institutions to reduce their emissions while mitigating the financial impact of shutting down large sectors of the economy.
For the parts of your energy consumption that rely on fossil fuels— such as shipping deliverables— buying offsets can allow your home or business to become carbon neutral.
What if I can’t cut my emissions fast enough?
Depending on your business’ unique predicament, performing the necessary efficiency upgrades may pose an operational or financial challenge and make it difficult to meet your targets in a timely manner. In this case, most companies choose to purchase Carbon Offsets or Emission Performance Credits (EPCs). EPCs provide a way for one company to compensate another for reducing their emissions voluntarily. A company that is under no obligation to cut emissions can still do so and sell that difference to others attempting to meet their targets in the form of an EPC.
If this type of trade sounds like one you think you’ll benefit from, you can ask our specialist for guidance on moving forward.
Where do Offsets come from?
Offsets can be separated into two categories, depending on where they are generated and who they benefit: local and non-local. Local offsets are generated at a source near you and directly benefits the local economy (in this case the provincial economy). Non-local offsets, be they national or international, benefit communities elsewhere but allow you to fund initiatives that may be restricted to certain areas. If you specifically want to dedicate your resources to projects like reforestation and rainforest preservation, you will most likely be purchasing non-local offsets.
Types of Carbon Offsets
According to a report by Ecosystems Marketplace/BNEF, this was the global market share per carbon offset type for the past decade:
- Wind: 30%.
- Reforestation: 10%.
- Avoided deforestation: 9%.
- Landfill methane: 7%.
- Biomass: 7%.
- Clean cookstoves: 7%.
- Forest management: 4%.
- Large hydro: 4%
- Other: 22%.
The Pros and Cons of Carbon Offsetting
Offsetting gets its fair share of criticisms. For one, some businesses that have greater financial means prefer to outsource their emissions in lieu of performing efficiency upgrades. Thus, some experts fear that it removes the incentive for companies to reduce their emissions. For this reason, many countries (including Canada) have mandated that companies cut their emissions.
On the other hand, some of our activities necessarily leave a carbon footprint. Things like heating our buildings, transportation, generating electricity, and even some agricultural practices — can be counteracted to achieve net-zero carbon pollution.
They also allow buyers to directly contribute to environmental causes and restoration projects of their choice. So, whether you’re a large business mandated to reduce emissions below a threshold or a start-up just trying to shrink your carbon footprint, carbon offsetting might be a good choice for you.
How can I purchase carbon offsets?
Carbon Offsets in Canada aren’t necessarily standardized across provinces. For example, British Columbia has a more publicly run carbon registry to help the provincial government meet its reduction targets, whereas Alberta’s carbon registry is managed by the CSA group. However, comparing carbon offsets can be difficult, let alone navigating the registries and deciphering the different project types, statuses. Moreover, to write out all the various permutations of green plans available and illustrate all the carbon offset calculations for each unique client would inundate you with unnecessary information.
Instead, one of our dedicated green energy experts can help you navigate your options to find out the best carbon offsets and credits to suit your unique needs. After filling out the form, one of our experts will contact you with options to proceed.
Option 2: Renewable Energy Certificates and Credits (RECs)
There are plenty of incentives to switch to renewable sources for energy over non-renewable ones— cutting pollutants, sustainability, minimizing our ecological impact— but it can be difficult to transition to a carbon-neutral lifestyle, especially if your grid isn’t supplied by renewable energy. That’s why Renewable Energy Certificates (RECs) have been created to provide consumers with a way of supporting renewable generators.
What are RECs?
Renewable Energy Certificates, or RECs, fall under a subset of Carbon Offset, but are specifically focused on generating electricity sustainably. This is because the power is generated from clean abundantly available fuels which are neither to be excavated nor burnt as in the case of fossil fuels. Sometimes referred to as green tags or green credits, RECs are a commodity that serves to represent the value and advantages of using renewable energy, such as wind power, solar power or electricity derived from biomass.
One REC is a commodity that represents one megawatt-hour electricity (1 MWh) produced by a renewable energy facility. When a company buys RECs of equivalent value to the company’s energy consumption, the company offsets the power they’ve sourced from traditional energy sources by funding the green generators that supply the energy grid. There are a number of renewable energy credit markets, including “green pricing” programs operated by local utility companies. REC prices are not fixed; their price varies depending on the supply and demand, similar to traditional energy.
Does buying RECs make a difference?
Purchasing a REC does not necessarily mean that the energy powering your home or business came directly from clean energy sources, as not every grid has a green generator supplying it. However, once energy is injected into the grid, it is indistinguishable from the energy that was generated through other means. Instead, the consumer purchases the equivalent number of RECs to the amount of MWh of energy that they would like to redeem, as a counterweight to the non-renewable energy that is consumed.
It may seem like a roundabout way to incentivize green energy, given that non-renewable sources are still contributing to the grid. For those that are serious about reducing emissions, it can be hard to tell if buying RECs makes a difference. However, your purchase of RECs will provide the renewable power plants with the demand and funding required to stay in the market. It also means that people who purchase from grids that are solely powered by non-renewable resources can support green suppliers, as REC trading is not restricted to your local grid. If you want to use green energy to power your business but cannot afford to invest in your own renewable generation, buying RECs could be for you.
Are all RECs the same?
Each REC receives its own unique serial number to prevent duplicate sales. The price is contingent on essentially three factors: source, vintage and provenance.
Source is the resource they use to generate electricity, such as (hydroelectricity, wind, solar, geothermal, biomass, etc.) Vintage is the year the REC was generated and came to market. Provenance is the location of the facility and its remoteness.
For large consumers with green generators nearby, it may be more feasible to purchase bundled RECs, meaning the number of RECs you purchase is directly tied to your consumption. These are often done in contracts to guarantee the funding necessary for the generator to develop. Unbundled RECs, however, stem from an excess of supply and are therefore more affordable. These can be purchased to offset previous or future consumption, and may be more ideal for smaller consumers.
Companies and organizations seeking to achieve their BOMA Best® or LEED® certifications can earn points towards these by purchasing Renewable Energy Certificates. REC owners are able to trade and sell their certificates, but once a REC is applied towards any certification it is retired and can no longer be sold. If you need help figuring out which option is right for your business or purchasing a REC, one of our representatives can help guide you through the various green energy solutions available.
VPPAs or RECs: What’s the difference?
This question is posed frequently and reveals some confusion in the marketplace as to what VPPAs are. While both RECs and VPPAs are meant for green branding, offsetting carbon emissions indirectly, and improving investor portfolios, there are some differences between them.
Virtual Power Purchase Agreements (VPPAs) are a financial contract between a corporation and an energy provider in which the corporation pays for power at a mutually agreed price, usually for 10-20 years. Any difference between the agreed VPPA price and market spot prices is usually settled monthly between the business and the generator. VPPAs are generally contracted in deregulated markets such as Alberta and can be signed with an active renewable power producer or a renewable project pre-construction. With the VPPA, the business also receives bundled RECs (RECs directly associated with generated power). Based on the laws and regulations arrangement, these RECS can be retired or sold again in the market.
RECs (or unbundled RECs) can be procured from trading desks either for the short or long term. These independent RECs can only be retired for business’ use and cannot be traded once purchased. Independent RECs can also be purchased in regulated markets as they are an indirect way to go green and cut carbon emissions.
Verifying your Green purchases
Green energy purchases are often considered an investment, meaning they cost a bit more up front but you reap your money back over time in the form of savings. The higher price products can be attributed to by the costs associated with implementing the new infrastructure. That’s why if you choose to make a green purchase, you’ll want to make sure you’re making a real purchase.
The Ecologo® certification demonstrates that a product or service has undergone rigorous, third-party testing for reduced ecological footprint. UL is the body that performs the scientific testing to certify the products. Renewable Energy plants, like solar or windfarms, that are Ecologo®-certified can be trusted that their facilities, practices and output are eco-friendly.
This certification applies to renewables and carbon offsets. It allows consumers to have a degree of confidence in their REC or Offset purchases. Typically, purchases made to contribute towards a certification program, such as LEED® or BOMA Best®, must be Green-e® or equivalently certified.
Our specialists verify that any green purchase conducted on your behalf is certified and suitable to help you accomplish your sustainability goals.
Getting your property certifiably Green
Building owners and managers hoping to achieve their BOMA Best ® or LEED® certification can earn credit towards the energy requirements by purchasing Renewable Energy Credits. RECs must be Ecologo® or Green-e® certified to ensure they have undergone rigorous testing and adhere to independent standards of sustainability in order to count towards this goal.
Canada has looked to other countries for inspiration on how to better serve the welfare of its citizens and the environment. In 1993, the U.S. Green Building Council (USGBC) was founded in Washington, D.C. with the goal of promoting sustainable practices in the design, construction and operations of buildings. To accomplish this, it developed the Leadership in Energy and Environmental Design (LEED®) Green Building Rating system, which officially launched in 2000. LEED® works to establish a metric for measuring the energy efficiency and sustainability of buildings, from the beginning of construction to completion, operation and maintenance.
In 1999, British Columbia became a founding member of the Cascadia Chapter of the USGBC. This ultimately led to the 2003 formation of the Canada Green Building Council (CGBC), a Canadian counterpart to the U.S. organization. That same year, they began developing a Canadian version of the LEED® system, which is currently overseen by the Green Building Certification Institute (GBCI) who ensures they meet their standards. Designers and architects can become LEED® accredited to prove that they have a level of expertise in designing green buildings. So, if you’ve got a construction or maintenance project coming up you can higher a designer with the appropriate credentials to acquire/maintain your building’s LEED® certification.
LEED® Canada measures buildings against the following metrics:
- Indoor environmental quality
- Energy and atmosphere
- Sustainable sites
- Water efficiency
- Locations and Linkages
- Materials and Resources
- Awareness and Education
- Design innovation (part of 10 bonus points).
How To Become LEED Certified
Purchasing RECs can contribute to your Energy and Atmosphere points total for your certification. Along with energy efficiency, the category focuses on clean energy and conservation, and encourages the use of on or off-site renewable energy. To get help finding the most suitable green energy plan for your desired LEED® certification, one of our representatives can assist you through your purchase.
BOMA Best® Certification
The Buildings Owners and Managers Association (BOMA International) is a federation of 93 BOMA U.S., 11 BOMA Canada and 13 International BOMA associations. It was founded in 1907 as an organization for those in the commercial real estate industry, including but not limited to commercial building owners, managers, developers and those that provide products and services required for daily operation.
Starting in 2005 BOMA launched BOMA Best®, a certification program to assess the environmental impact and performance of existing buildings. Previously, it only evaluated 6 key areas and used internal methodology to calculate the energy and water efficiency, but as of 2016 it measures the following 10 and uses the ENERGY STAR portfolio where applicable:
- Energy (ENERGY STAR Portfolio Manager)
- Water (ENERGY STAR Portfolio Manager)
- Health and Wellness
- Stakeholder Engagement
Buildings must be at least one year old and have 70% occupancy for 12 consecutive months (some exceptions apply) and then choosing the criteria representative of its asset class, after which it will be eligible for certification. Multiple buildings in different locations or represented by different local BOMA associations can be evaluated under a single portfolio as long as they are under one management company with one management policy.
To get help finding the most suitable green energy plan for your desired BOMA Best® certification, one of our representatives can assist you through your purchase.
From waste generation to energy usage, your company’s impact on climate goes beyond direct emissions. Go to the form above and learn how we can help your company go carbon neutral.