Interest across the US in the importance of sustainability and renewable energy has created a great deal of support for the renewable sector. Government initiatives encourage the growth of this market, and have passed legislation to increase the percentage of electricity in the power grid that comes from renewable sources. The development of this market has led to the creation of a new market exclusively for the environmental benefits of green energy. Renewable energy can be sold “bundled” or “unbundled.” Bundled renewable energy includes the rights to the environmental attributes and benefits of the energy, as well as the electricity itself. Unbundling the energy separates the electricity and the environmental attributes, allowing both to be sold separately to different customers. This allows entities within states with green energy programs to meet their requirement for green energy by procuring Renewable Energy Certificates (RECs) qualified facilities generating excess RECs.

A Renewable Energy Certificate represents the environmental attributes of one megawatt hour of electricity from a renewable energy source. It is a separate commodity from the electricity itself unless it is sold together or “bundled.” The progress in the REC market is largely due to states’ legislation requiring that a certain percentage of the total power pool be comprised of renewable electricity. By unbundling the power, the electricity may be sold as brown power, but the states have the option of purchasing a number of RECs equivalent to the number of megawatt hours that are required to be green power (1 REC typically is equivalent to the attributes of 1 MWh). In this manner, the state meets its necessary quota of electricity to be derived from green sources. This allows for a state to meet their quota while stimulating the economy

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mike.ferguson@spectrongroup.com      1 360 892 3300