Think about how you want to go green. You go to your utility company and say you want energy, especially energy from solar or wind generation, energy that doesn't come with high carbon emissions or harmful air pollution. Your home uses about 10 megawatt-hours of electricity per year, so you get plenty of sunlight and wind.
Fortunately, you have just eliminated all greenhouse gas emissions from your electricity use. Is that right?
Not true. Thousands of businesses, households and cities across the country and around the world are purchasing renewable energy credits to meet climate goals and support their sustainability requirements. There is only one possibility. receiving these credits does not mean that you are actually working with renewable energy . In fact, it means nothing at all.
"I would argue that I use all renewable electricity," says Michael McRae, executive director of the World Resources Institute, if I get the credit. “Now physically, right? Not necessarily."
Experts say that once renewable electricity credits are acquired, they can help boost wind and solar power generation. But now that the price of renewable energy has fallen and solar farms have mushroomed from California to Texas, it's seen as a way for companies to clean up their act without much effort or cost.
The reason has to do with grid science and a very strange product known as a "renewable energy credit".
Why is it weird to buy electricity?
Buying electricity has some problems compared to buying, say, a toaster.
"Electricity is a strange thing," says Michael Gillenwater, executive director and co-founder of the Greenhouse Gas Management Institute.
First, electricity must be used as soon as it is produced. therefore network operators are constantly trying to balance all the different power sources. And when electricity is produced, whether it's turning wind turbines or powering coal-fired power plants, it's impossible to trace its source. When you flip a light switch or start an electric car, it is impossible to tell whether the energy is generated by solar panels or natural gas generation.
Take the Iowa wind farm for example.
© Provided by The Washington PostMark Dyson, executive director of carbon-free electricity at the RMI Energy Research Centre, says the power grid is a bit like a giant swimming pool. When different types of power plants generate electricity, it is like pouring water from different colored cups into a swimming pool. it looks different from the outside, but once you get into the pool, the water is no different. A person sitting at the end of a pool or an experienced user cannot see where the water is coming from by swallowing the water through a straw.
This is why renewable energy credits, or RECs, were created. These credits play a sort of electrical tracking game. Suppose a wind farm in Texas produces thousands of megawatt-hours of electricity in a given year. These wind farms can make money in two ways: first by selling this electricity to local utilities, or second by selling this "green" or "renewable" energy on credit to companies and individuals.
When a company says it buys renewable energy, in most cases it means buying renewable energy credits, not electricity.
© Provided by The Washington PostSome revolving loans are sold under state or federal regulations; they are more expensive and according to experts more legal. But other credits are sold to businesses or individuals who want to go greener.
These loans can create strange contradictions. The West Virginia-based company can use 25 megawatt-hours of electricity a year, mostly from coal. But companies can buy renewable energy credits from Texas wind farms and claim that their electricity is completely pollution-free.
The company "can tell the public it has zero emissions," Macrae said. "But is Earth seeing fewer emissions?"
There are no clear climate benefits
The idea behind the revolving credit is that if companies and individuals buy it, they will provide more cash that can help wind and solar producers get back on their feet. But critics say there is no evidence that the money from the loans actually helps wind and solar power.
"There's no research to show that," says Gillenwater.
For example, a 2013 study found that the ability to sell renewable energy credits is unlikely to change the decision-making process of wind farm developers, even if the credits become prohibitively expensive. Most renewable credits are less than $1 per megawatt hour; sometimes as high as $5 per megawatt hour. Experts say the credit would cost between $20 and $40 to really boost renewable energy.
Gillenwater says there are several issues that limit the credit's true impact. First, the loan does not work for a long time. A company can receive a recurring credit one year and then decide not to receive it the next year, making it difficult for recurring developers to rely on it as a source of income. But the bigger problem is that there are too many outstanding loans.
"Even if you have enough people to buy a teaspoon of land, it does not mean there will be a shortage of teaspoons," he says. "The price will always be quite low."
There is growing evidence that such credit helps companies improve their green credentials. Another study published last year analyzed the climate goals of 115 companies that did and did not use revolving credit. By looking at the energy mix these companies operate in, the researchers estimate that they have reduced their electricity-related emissions by 10%, which puts them just below the Paris Agreement's climate goals. But by factoring in renewable credits, these companies say they reduce carbon pollution by about 31 percent on average.
"Most of the reported reductions are unrealistic," said Anders Bjorn, the study's lead author and a postdoctoral researcher at the Technical University of Denmark.
Possible fix:
Is there a way for companies and individuals to buy renewable energy that really matters?
Some say yes. The greenhouse gas protocol, which provides a standard for companies to report their emissions, is revising proposals to make electricity cuts more "realistic".
One possible proposal is known as "24/7 clean energy". The biggest problem with renewable credits is that they can be produced hundreds (or even thousands) of kilometers from where people or businesses use the electricity. Energy can also be produced at a completely different time than it is used. For example, a company that operates an overnight plant in Maryland can get a loan from a solar farm in California that only operates during the day.
That's a problem, Dyson says, because California already has a lot of solar panels. Each solar panel added to the grid does little to wean the country off fossil fuels.
Under 24/7 clean energy systems backed by companies like Google and Microsoft, businesses will still receive renewable credits, but those credits will be more closely tied to the electricity the business actually uses. Under this system, businesses will receive credit for every hour they work on and off their network. West Virginia businesses no longer need to buy renewable energy from Texas. It's approved by the federal government, and there's evidence from energy modelers that it can help clean up the grid.
Other solutions include trying to track actual emissions, which would prevent the purchase of green energy, or simply requiring companies to report emissions from the electricity they use on their premises.
It is not yet clear which strategy will win. But experts say there is an urgent need to match renewable credits with grid needs to ensure that buying renewable electricity isn't just swapping teaspoons of land.
"There is no evidence that they have moved the needle," Gillenwater said. "There's some magical thinking going on here."
