News

Power Down - RECS

February 18, 2016

What the heck is a REC? A REC or Renewable Energy Credit is associated with one-megawatt production of clean energy and can be purchased or sold on a market. But how do they help promote renewables and why does Penn buy them? We turned to Dan Garofalo, Penn’s Sustainability Director, and Andrew Zarynow, Energy Planning Engineer, to answer our questions. Below is an edited transcript of our conversation.

 

Green Campus Partnership: How are RECs used in the market and by whom?

Dan Garofalo: The idea of RECs is closely tied to legislation and voluntary markets. First, state governors and others have created an energy standard that requires producers in a state, like PECO and Exelon, to create a certain percent of “green” energy. They can produce this amount of energy themselves or purchase RECs [from green energy producers] to make up for the deficit. Meanwhile, in the voluntary market, parties purchase RECs for many reasons. Corporations have a reputational interest in RECs. For instance, Google uses so much energy that people will be critical of them unless they [mitigate] their impact by buying RECs. The government, universities and others may also want to support clean energy because of some other reason, for instance as part of their mission. It’s a robust market. The Air Force is a big buyer, so is the NHL, tech firms, a number of universities. And we are still the biggest university purchaser by volume, about 200,000 RECs every year.

Andrew Zarynow: The concept of a REC is basically to provide some level of guarantee that the same “electricity” is not sold more than once.

 

GCP: Why does the University buy RECs?

Dan: Penn wanted to buy RECS as part of our mission to support clean energy development. We started in 2004 before our Climate Action Plan was created [in 2009] because the Vice President of this division [Facilities and Real Estate Services] was approached by a windmill project in Pennsylvania. The project couldn’t get financing without a long-term guarantee of income. Penn committed to buying RECs from the project over 10 years for their clean energy production and that ensured the project could move forward with 8 windmills in Bear Creek, PA.

Since then, we continue to have a market influence by buying more RECs. By the accounting standards set by the Environmental Protection Network, for the money we spend, the University can make a legitimate claim to offset about 50% of the electrical power we purchase to run this campus. In other words, the amount of green power generation we support totals to about half of what we buy from PECO and Exelon.

Andrew: They enable us to purchase clean power when very little of it is available locally and it helps foster the overall greening of the grid because it shows interest in the purchase of renewable energy, which ultimately subsidizes that industry and benefits the grid as a whole.

 

GCP: Anything else you’d like to add regarding energy at Penn?

Andrew: Use less of it. We’re lucky that at Penn we target energy efficiency and sustainability on a lot of levels. We do it on the supplier side with RECs and investigating solar purchasing agreements, and we are always looking for other opportunities to support that effort. Then on the internal side, we support energy conservation through programs, like Century Bonds, and work with sustainability teams on outreach like the Power Down Challenge. Overall we’re really targeting the energy triangle: efficiency, generation, and overall use. This way we can try to use less, use what we need more efficiently, and meet overall campus needs. We try to balance the most economical purchase with the most sustainable purchase and to find that medium that supports the growth of campus sustainability affordably. 

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