Fact or Theory? Renewable Energy Credits Support Clean Energy and Bring Down Dirty Energy Use

Posted on October 16, 2009. Filed under: Questions | Tags: , |

Thanks to Allison for this great discussion question she posted on our Facebook page:

“The more green tags [Renewable Energy Credits or RECs] that homes and businesses purchase, the more clean energy sources that come on line, and the less polluting sources our society uses.

Does this really work, or is this just theory?

Answer: The short answer from Gary Skulnik, President of Clean Currents,

“The voluntary market (ie the purchase of green tags) has been a major driver in the growth of wind power in this country”

Here are some graphs from presentations by the Center for Resource Solutions and the National Renewable Energy Lab (NREL) at last month’s Renewable Energy Conference in Atlanta that support this conclusion:

Source: NERL data in CRS Presentation

Source: NREL data in CRS Presentation

This graphic shows the growth in the voluntary market (or the market for the purchase of green tags). This growth has been substantial and was at a level of nearly 25,000GWh of power by 2008.  Another key element of this graphic is that it shows that purchases in the voluntary market have outpaced those in the compliance market–in other words, more green tags are purchased on a voluntary basis than to satisfy legal requirements. Now take a look at this graph:

Source: NREL Presentation

Source: NREL Presentation

This one shows that wind energy capacity (both annual and cumulative) has grown in line with the purchase of green tags shown in the first graph. So REC purchases appear to be a major driver in the growth of the wind energy industry in the United States.

It’s a little more difficult to say that this growth in the wind power industry is contributing to the decline of our dependence on dirty energy sources, as the share of renewables in US energy consumption shows more fluctuation than the graphs above. But the next graph, from the Energy Information Administration shows that there has definitely been an increase in the share of renewable energy in total US energy consumption in recent months.

US Monthly Energy Consumption by Fuel Source

So, in conclusion, green tags support wind energy development and potentially (hopefully) lead to a reduction our consumption of dirty fuel sources.

For more information on RECs and how they work see here.

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