March 25, 2016
North Carolina

Winds of change?: Deconstructing renewable energy certificates

Posted on March 25, 2016 by Able Allen | Mountain Xpress | mountainx.com

If you live in Asheville, you may have received a mailer recently offering a $25 gift card at Green Sage Café if you signed up with Arcadia Power. Like a number of other local businesses, the eatery proudly proclaims its use of green energy. But apart from the solar panels glinting on some rooftops, there’s not a lot of green energy production in sight around here. So where’s that power coming from? And how green is it really?

Arcadia sells renewable energy certificates. RECs are tradeable energy commodities, each one representing one megawatt-hour of electricity produced by wind turbines or some other green energy source. But the actual power is being paid for by someone living closer to where it’s produced; the certificate is merely an add-on. Legally, though, whoever holds the REC is considered the end user and can claim to be using that much green power.

Those enviro bragging rights, along with a sincere desire to support clean energy alternatives, have inspired such respected, well-intentioned local entities as Edna’s of Asheville, Green Sage Café, High Five Coffee, Limonés, Patton Avenue Pet Co., Saffron Fine Foods (the parent of Homegrown), The Soapy Dog and the Unitarian Universalist Congregation of the Swannanoa Valley to partner with Arcadia, using wind-generated power to offset what they actually buy from Duke Energy. Some have also helped promote the company by publicizing their partnerships and incentivizing others to follow suit – even though it ends up costing a little more. Arcadia charges customers 1.5 cents per kilowatt-hour to cover the cost of buying the RECs.

“We’re paying for the energy that’s put into the grid by green sources, by wind turbines and by solar,” says Edna’s owner Mike Zukoski. “It’s more expensive right now than coal energy, but we’d rather pay a little extra and have the energy come from green sources.”

If you’re literal-minded, however, you may find it hard to wrap your brain around the idea, since that green power is more likely being used by someone hundreds or thousands of miles away. And meanwhile, here in Asheville, most electricity is generated at Duke’s coal-fired plant in Skyland.

Conflicting priorities

Many Asheville residents are passionate about both sustainability and buying local, but when it comes to electricity, it can be hard to match up the two, at least in a literal sense. In Western North Carolina, most folks are Duke Energy customers; most of the electricity the giant utility supplies comes from coal- and nuclear-powered facilities. Photovoltaics provide roughly 1 percent, says spokesperson Randy Wheeless. And since Duke’s closest solar farms are in Alexander, Cleveland and Cherokee counties, even their output probably doesn’t reach Asheville. A solar field planned, adds Wheeless, to accompany and supplement the natural gas-fired facility that’s slated to replace the Skyland plant.

Customers wanting to show more support for renewable energy may opt to sign up with companies like Arcadia Power. But if they do, they’ll be paying a premium: Duke will get the same amount as before for the power actually used, and Arcadia will also get its cut.

“We’re linking up to your Duke account to monitor your usage,” says Cliff Bernstein, Arcadia’s director of marketing. “The extra charge comes from us, and that’s to go procure the green power credits for you.” The company uses part of that money to buy RECs from wind farms, mostly hundreds of miles away in the Midwest, and “retire” those certificates on behalf of their customers. The ones Arcadia buys are certified by Green-e, an independent auditing company.

That’s important, says Bernstein, because “If you’re not Green-e certified, the accountability is a lot less. Things have happened in the industry such as double selling of certificates.” The certification also indicates that the RECs Arcadia procures for its customers are from wind farms built in the last 15 years. This ensures that “People aren’t buying them from ancient renewable-energy projects, which doesn’t really do any good for anybody.”

In the grand scheme of things, RECs give the creators of renewable energy additional revenue beyond what they get from selling the actual power they produce. And those producers count on that additional income, notes Bernstein, “when they either expand their current operations or set up a new wind farm somewhere. This is part of the deal for them.”

According to the EPA, this system is a legitimate way to offset the negative environmental impact of one’s power usage. In a video explaining the idea, the federal agency says, “When enough people buy RECs, these purchases promote growth in the green power marketplace and help avoid greenhouse gas emissions across the country.”

Nonetheless, supporting wind farms in the Midwest is unlikely to improve air quality in Asheville. Meanwhile, NC GreenPower does something similar to what Arcadia offers, except the RECs it buys represent in-state solar, wind, small-scale hydro and biomass energy production. For every $4 donated, the Raleigh-based nonprofit will offset a 50 kwh block of energy and devote $2 to support the installation of new solar projects.

Wired

In North Carolina, only licensed utilities can sell energy. So unless you’re in a position to put solar panels on your roof, or install a small-scale wind or water turbine or invest in a geothermal system for your home, your options are limited.

The electricity Duke generates is delivered through a network known as a power grid. There are many such grids, loosely connected, all over the country. In our area, Duke is responsible for ensuring that power production is kept in line with demand.

And according to Wheeless, Duke isn’t looking to let other companies sell power to its customers. “Third-party sales, if that’s the only issue you care about, then we’re not interested,” he says. But the utility, he adds, would be willing to talk about a broader spectrum of solutions. “If you could have a collection of issues, get a number of stakeholders at the table and deal with a number of solar-related issues, you may make more progress than just trying to fight it out over one issue.”

Green Sage owner Randy Talley, however, says, “Arcadia is providing a real opportunity for people in Western North Carolina to support renewable energy,” which he doesn’t see Duke doing. “I understand that a lot of people have what you might call a cynical view of Arcadia Power,” he concedes. But “Buying Arcadia puts a wrapper around Duke; it doesn’t change the dilemma with Duke. A renewable energy certificate is really something that’s trying to say to policymakers, ‘Change the system. People want green power; change the system and allow a green power company to grow side by side with Duke Energy. Or incentivize or direct Duke Energy to provide sustainable and responsible energy.’”

The E-word

In the end, whether buying RECs is a smart move may depend on what your goals are. Joan Walker, interim southern regional director of MountainTrue, an Asheville-based environmental group, isn’t necessarily against these certificates. But if you want to address the specific energy situation in WNC, there are other options to consider first. “As long as folks understand that it’s not building capacity here in the region and they still want to do it, that’s totally understandable,” she explains.

Zukoski, meanwhile, is a LEED-certified professional, and his commitment to sustainability doesn’t end with Arcadia. At Edna’s, he notes, “We’re now up to 100 percent LED lighting. I wish our city would require all new buildings to meet LEED standards. It would make houses much more efficient, and they’ve shown over and over again that the difference in cost pays back in minimal time.”

Talley’s cafés reflect a similar approach. “The first strategy, before you buy an expensive energy-producing system like solar panels, is to implement all the energy-saving measures,” he says. Accordingly, his eateries are well-insulated, have almost all LED lighting, and one location uses the heat generated by its refrigeration system to heat water.

Walker agrees. “Before anyone considers putting a solar panel on their roof or buying a REC, they should make sure they’re getting the most out of their energy dollars now and do all of the energy efficiency that they can in their home.”

Bernstein of Arcadia doesn’t dispute that. Ask him what’s the single best thing you can do to burn less coal, and he’ll give you a two-word answer: “energy conservation.”

URL to article:  https://www.wind-watch.org/news/2016/03/25/winds-of-change-deconstructing-renewable-energy-certificates/