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Dear Mark,

The Energy Miser #17 February 25, 2008

If you can get through the "Proud Father" moment, you'll learn more about Renewable Energy Certificates and Carbon Trading than you wanted to know.

Oh, and by the way, the warm weather is coming as are a few new solar systems and a wind turbine or two.

Read all past issues of The Energy Miser here.

Most readers know that I have triplet 9th graders (15 years old). Here in Hudson, the 9th graders must do a community service project (of their choosing) over the course of the school year called a CAP or Community Action Project. This year the broad categories for CAPs include the environment and Darfur. For some strange reason, each of my kids picked an environmental project ;-).

My daughter is writing letters to mayors and town managers asking them to sign on to the Cities for Climate Protection program and she is studying pollution in town and plans to write about it for the Hudson Sun. One of my sons will be doing public education on phosphates in the Assabet River.

My other son is working to change the town zoning bylaw to allow for small wind turbines (Currently, turbines are not allowed in Hudson.)To start the bylaw change process, my son and I found an already enacted bylaw from another Massachusetts town, we edited the bylaw for Hudson, then my son gathered the necessary 10 signatures (plus a few extra) to get the bylaw on the May town meeting agenda, then submitted it to the Hudson Town Clerk.

Even though the town meeting is months away, the proposed bylaw has already started people talking. We have received many emails about the bylaw and on February 17, the Boston Globe West section covered the story; Students Project Tilting for Windmills . On February 27, my son and I will explain the bylaw to the town's Finance Committee with the hope of getting a "recommended" from the FinCom for the town meeting.

As part of his project, my son will continue to promote the bylaw and try to increase favorable turnout for the May 5th town meeting. If you are a registered voter in Hudson and want to support the bylaw change, come to town meeting. You can download the draft bylaw here (60kb, pdf).
Selling your RECs; a Personal Decision
How would you like to make an additional three cents per kilowatt-hour with your solar or wind electricity generation system? All you have to do is agree to sell your Renewable Energy Credits (RECs) and report your electricity production once a month. Sounds simple; is it?

The contract and reporting part is easy. The REC concept is not quite so obvious...

When a renewable energy system is working, it generates two things, electricity and renewable energy credits. Your home or business uses the electricity or feeds it to the grid for others to use. The renewable energy credit (or certificate), however, belongs to the producer unless that producer sells it to a REC buyer. Since the grid cannot tell the difference between renewable- generated power and fossil-fuel-generated power, the RECs are a way to track that power once generated.

Who buys RECs? For example, Many Massachusetts electricity customers can choose a "Green Up" option on their electric bill. If you choose the green-up option, you agree to pay a bit more for your electricity to ensure that some or all of the power you use comes from a green source such as a solar electric system or a wind turbine.

Does that mean the utility has to build a green electricity project? No. While building a green power facility is an option, it is more likely that the utility will go to the REC market and buy certificates to cover the "green up" kilowatt-hours purchased by their customers.
The Dilemma
Here in New England, we have a ready market for RECs. We can sell ours to The Energy Consumer Alliance of New England (ECANE) for 3 cents per kilowatt-hour. ECANE is a not-for-profit organization that aggregates the RECs of small producers and sells them on the REC market.



If you sell your RECs what happens?
  • On a typical 2,400 watt solar system, you will earn $86 per year
  • You will shorten the payback on your renewable energy system
However, because you sold your RECs,
  • You will not be able to claim that you personally are "greening up" your electricity.
  • You cannot claim a reduction in your carbon footprint because along with the RECs, ECAN buys ALL of the environmental value of your RECs including carbon offsets. Here is the key section in their contract (140kb, pdf):

All environmental value and credits of any kind and nature resulting from or associated with the energy attributes purchased by ECANE shall accrue to and be assigned exclusively to ECANE. The Seller shall not make any formal claims about the "greenness" of the electricity produced by the Facility, and should not refer to the Facility as a "renewable energy" generator without also disclosing the fact that energy attributes are being sold to ECANE.

Whoever owns the REC gets to claim the benefit.

So do you sell your RECs? It is very much, a personal decision. If you want to legitimately claim your "greenness" then keep them. If the extra few dollars per year are important, then sell them.

For further reading on RECs try these links:
http://www.eere.energy.gov/greenpower/markets/certificates.shtml?page=1 http://eetd.lbl.gov/ea/ems/cases/TRC_Case_Study.pdf
http://www.massenergy.com/Solar.REC.Sale.html
And What about the Carbon Credits
As I indicated above, when you sell your RECs to ECANE, you also sell your carbon credits. If selling your RECs is a difficult decision, let me make it just a bit more difficult...

Most of the Northeast and Mid-Atlantic states have signed on to the Regional Greenhouse Gas Initiative known as RGGI (pronounced Reggie). RGGI is a "cap and trade" program designed to reduce greenhouse gas emissions.

The member states will impose emissions limits (a cap) on businesses and allocate a finite number of carbon credits to each business in proportion to their green house gas production.

If a company produces less green house gas then their limits allow (based on the number of credits they receive) then they can sell their remaining credits to those who need them.

Imagine that Jet Engines R Us in Lynn, Massachusetts receives carbon credits that allow them to produce 100 units of CO2 per year. However, because of factory improvements, they reduce their emissions to 50 units of CO2. That means they have 50 credits available to sell.

Meanwhile, imagine that Razors, Inc, in South Boston, also has 100 credits but they produce 150 units of CO2 per year. Since Razors, Inc. produces more CO2 than allowed, they must acquire (trade for) 50 additional credits to cover their overproduction of CO2 or they must figure out how to lower their CO2 production.

Razors, Inc. may decide that it will take longer than one year to reduce emissions from their plant or that purchasing credits is a better investment than modifying their production process so they purchase enough credits to cover their excess CO2 production. Since Jet Engines R Us has 50 credits to sell and Razors, Inc. needs 50, they could agree on a price and trade credits for money (or razor blades :-) or both companies can buy or sell credits in the credit market.

Over time, the RGGI states will lower the number of credits available and will institute monitoring and fines for exceeding credit limits, this will have effect of reducing the amount of CO2 released by businesses.

Sounds great right? Unfortunately, Carbon Dioxide cap and trade programs are still new and have not proven themselves. In addition, while some argue that Cap and Trade will be more effective and less drastic than a "carbon tax," others complain that the cap and trade programs are not aggressive enough and allow polluters to continue polluting.

Both sides have their points, but the debate only makes it harder for you to decide on how to handle your carbon credits.
Snow-free Roof Tops, Thawed Ground, Long Sunny Days
The updated solar grants for Massachusetts have generated tons of calls and we are ramping up for a busy installation season. Our work is largely based on the weather. In particular, dry roofs. But that does not mean we are twiddling our thumbs. Here are some upcoming talks:

  • March 10, Lexington Global Warming Action Coalition on residential wind and solar hot water systems.
  • March 11, 1:00 PM, Hudson Women's Club at Grace Baptist Church, River Road in Hudson, Presentation #27 on Global Climate Change
  • March 13, NESEA Building Energy, Boston World Trade Center, I will be part of a panel discussing and answering questions about small wind systems.

Turn off the lights, switch to compact fluorescent bulbs, put computer gear on a power strip and turn it off at night, wear a sweater, keep a blanket on the couch, unplug unnecessary appliances, add insulation, take shorter showers, walk instead of drive, ride a bike, group your errands, inflate your tires, grow your own food, eat locally-produced food, recycle, use your most efficient vehicle, get a hybrid vehicle, wash your clothes in cold water, use a clothesline instead of the dryer, print with narrower margins, use both sides of the page, buy less, compost, install a renewable energy system...

Thanks for Reading the Energy Miser,
Mark Durrenberger
New England Breeze, LLC

phone: 978-567-WIND (9463)
web: http://www.newenglandbreeze.com