How to buy renewable energy, or . . .“What the heck is a REC?”
Electricity on the New England grid is a single interconnected collection of vibrating electrons. Once electricity is added to the grid, it can no longer be identified with its source. The New England grid is sourced from a mix of renewable and non-renewable sources.
A separate accounting system has been created to keep track of renewable energy on the grid, and thus, to allow it to be bought and sold. That system uses Renewable Energy Certificates, or RECs. Each time a renewable energy project generates 1 megawatt hour of electricity, 1 REC is minted. That REC can then be sold. Purchase of a REC gives the buyer, and no one else, the right to claim use of that amount of electricity from that specific renewable energy project.
To supply renewable electricity from the grid to customers, an energy supplier must purchase two things: the electricity itself from the grid, and RECs equal to the amount of renewable electricity the supplier wants to provide. RECs needed for Acton Power Choice customers are bought by the APC energy supplier. In the current contract, that supplier is Constellation Energy.
Some renewable electricity is required by state law, or . . .“What's the RPS?”
Massachusetts state law requires that all electricity sold in the state must include a minimum amount of electricity generated by renewable sources, and another minimum from alternative, highly efficient sources that are not considered renewable (such as waste-to-energy operations). These requirements are known, respectively, as the Renewable Portfolio Standard (RPS) and the Alternative Portfolio Standard (APS). The required amounts increase a little every year.
For 2019, Massachusetts required a minimum of 14% from newer New England-based renewable energy projects (“class I RECs”), and an additional 10.6155% from other types of renewable energy projects, as well as alternative energy sources. (You can download a spreadsheet with the specific required amounts from the Massachusetts Department of Energy Resources.
Buying New England RECs creates more available renewable energy, or . . .“What is additionality?”
How does buying RECs help encourage future renewable energy projects in New England? To put up a wind farm or a small hydro plant, a potential energy developer considers the potential income and expenses involved. The success of the ongoing REC auction process, which matches supply and demand for New England RECs, encourages energy developers to choose renewables. Customer choice of additional renewable energy — by opting up to Acton Power Choice GREEN, for example — creates more demand, helping keep prices for RECs healthy enough to encourage more renewable energy development. The ability of RECs to motivate additional renewable energy development is known as “additionality.”
One reason Acton Power Choice has decided to use only New England RECs is because of the power of additionality in our region. Some energy supply programs use Midwestern wind RECs, which are now priced so low that they provide very little additional incentive for energy developers. The Midwestern wind energy supply is growing quickly because of the simple economics of tapping into steady, strong Midwestern winds, rather than because of the little bit of extra income from RECs. Also, very little Midwestern energy makes its way onto our New England grid.
Why Acton Power Choice GREEN?
First, for all Acton Power Choice customers, Acton’s energy supplier (Constellation) has to buy the number of RECs required to match the RPS for everyone’s electricity use.
Plus, for all the electricity used by Acton Power Choice Standard customers, Constellation must buy additional RECs to increase the renewable energy portion of the supply by another 10%.
Plus, for all Acton Power Choice GREEN customers, Constellation must buy enough RECS to bring supply for those customers the rest of the way up to 100% renewable energy.
All of those RECs add up. During the first two years of the Acton Power Choice program (2017–2019), the additional purchase of 8,600,000 RECs was required beyond the base RPS for Acton’s approximately 8,000 Acton Power Choice customers. That means upgrading 8,600 megawatts of the power supplied to Acton with 100% renewable energy from New England. Each electricity customer that opted up from Acton Power Choice Standard to Acton Power Choice GREEN more than quadrupled the amount of renewable energy bought on their behalf. By working to increase the number of Acton Power Choice GREEN customers, and the amount of renewable energy supplied to Acton Power Choice Standard customers, Acton is taking direct action to advance the critical switch from fossil fuel use to renewable energy use. This advances Town and resident goals of slowing the pace and reducing the severity of climate change impacts on our community.