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The Role of Renewable Energy Credits Today

By Lauren Newsom

Wind farms generate pollution-free power that reduces dependence on fossil fuels and contributes to energy independence, while fighting global climate change. Building more wind power and educating people about the benefits is crucial to the future of the energy options available in the United States.

The U.N. Intergovernmental Panel on Climate Change cites wind power as a key mitigation technology available today to reduce carbon emissions in the energy supply. If wind power provided 20% of the nation’s electricity (an achievable goal supported by many including President Bush), according to the American Wind Energy Association (AWEA), it could displace enough coal-fired plants to reduce the United States carbon dioxide emissions by one third.

The AWEA states that “the U.S. wind energy industry continued new installations at a breakneck pace in the first quarter of 2008, putting 1,400 megawatts (MW) or approximately $3 billion worth of new generating capacity in place—enough to serve the equivalent of 400,000 homes.” While this is an impressive pace, to achieve the 20% goal, installations of new wind power capacity would increase to more than 16,000 megawatts per year by 2018, and continue at that rate through 2030.

In 2008, over 70% of the U.S. electricity is produced by burning harmful fossil fuels like coal and gas. Conventional energy production is the leading cause of industrial air pollution. Fossil fuel plants emit pollution that causes smog and promotes asthma and other respiratory infections. According to the American Lung Association, more than 64 million Americans breathe air that has enough particulate pollutants to put their health at risk. Turning to wind power to produce electricity is a sensible alternative as electricity produced by wind power does not contribute to air pollution.

While not a benefit to the quest for energy independence, wind power supports farmers and rural development by providing a new source of revenue for farmers and their communities. Wind farms can be installed without significant impacts on existing farming operations. AWEA asserts that for a 250-acre farm, the annual income from a wind lease could be $14,000, with no more than 2-3 acres removed from production. Wind power also supports a significant number of manufacturing jobs to create turbine parts. Achieving a 20% wind energy supply would support roughly 500,000 jobs in the US, with more than 150,000 directly employed by the wind industry.

Buying Wind Power

There are two ways for entities to buy wind power. The first way to buy wind energy is to build a wind turbine on or nearby a building that will be using the energy. The wind power is piped directly into the building and used at the generating source. This type of implementation is called On-Site generation. The second way to utilize wind power is to fund wind power generation on the national power grid by purchasing renewable energy credits (RECs).

One must first understand the national energy grid in order to understand RECs. The power grid is like a big bathtub filled with electrons. Power generators of all types continually fill this bathtub with electrons and consumers drain the bathtub of energy at a similar rate. Because all of the energy is mixed together, it is impossible to request specific electrons from this pool or to distinguish between the electrons produced by ‘clean’ or ‘dirty’ methods. Renewable energy producers generate RECs every time they generate electricity in a 1:1 ratio of MWh produced to RECs available. By purchasing RECs in accordance with how much electricity a company or building uses, it is ensured that the same amount of clean, renewable energy will be replaced to the power grid, or into the ‘bathtub’ on their behalf.

Benefits of Renewable Energy Credits

There are many benefits to choosing to offset electricity through RECs:

    1. Organizations are able to claim the environmental benefit and CO2 reductions by choosing green power. As more large companies, government institutions, non-profit organizations, and LEED projects choose RECs, more renewable energy is brought on line on a large scale. Unlike on-site renewable energy generation, a building does not have to be situated in a windy area to make a choice for renewables. In fact, anyone, anywhere in the United States, from a Fortune 500 company to a student in a dorm room, is eligible to offset their electricity use with renewable energy credits.

    2. Through RECs, renewable energy development is encouraged in the most practical locations and supports efficient, large-scale projects where renewable resources are plentiful.

    3. Utilizing renewable energy in accordance with efficiency strategies allows individuals and businesses to take full responsibility for the environmental impacts of electricity use.

    4. Organizations can realize educational and marketing opportunities for their stakeholders, employees, and clients.

    5. Most LEED projects can earn 1-5 LEED points by implementing grid source green power through RECs.

As the energy infrastructure continues to change in the US, it’s important to look at the potential for alternative sources. According to Randall Swisher, the Executive Director of AWEA, “wind power can provide 20% of the nation’s electricity by 2030, and be a critical part of the solution to global warming.” Offsetting through RECs is a vote in this direction.


Lauren Newsom, LEED AP is a Regional Sales Manager for Renewable Choice Energy. Renewable Choice has provided green power to over 450 LEED projects, Ms. Newsom speaks frequently to educate the public and raise awareness on the potential of renewable energy.

Keywords: Leadership, Economic issues, Construction outlook, Construction forecast, Political issues, Development policy, Rural development policy, Sustainable architecture, Renewable energy, Wind energy, Renewable energy credits, LEED, Wind farms, Power grid, REC, Article


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