recs, ppas, & the alphabet soup of purchasing renewable energy · several types of “green...

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RECs, PPAs, & the Alphabet Soup of Purchasing Renewable Energy

Katherine DiMatteo Sustainable Food Trade Association & Climate

Collaborative

Mark Trexler The Climatographers

So You’d Prefer a Stable Climate? Purchasing Green Energy

Workshop Agenda •  The Relevance of a Stable Climate •  The Importance of Energy to a Stable Climate •  Can I/We Influence Energy Outcomes? •  If So, What Do I Need to Know?

Is a Stable Climate Important?

Is a Stable Climate Important?

Source: IPCC

Is Energy Important to Climate Change?

Is a Stable Climate Important to ME?

Risk or Opportunity?

But Can I/We Influence Energy and Climate Change Outcomes?

The Famous 2x2 Matrix!

To Change Outcomes M

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Doing Things Differently

Influencing Climate Outcomes M

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Innovation

(Policy, Behavior, Technology)

Doing Things Differently

Business as Usual

New Public Policy

Voluntary Action

A No Brainer? M

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Innovation

Doing Things Differently

Business as Usual

New Public Policy

Voluntary Action Voluntary Action

Harder Than It Looks M

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Doing Things Differently

Turns Out Policy is Very Hard Work, + Big Barriers, = Poor Results

Voluntary Action

Harder Than It Looks M

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Incentives and Strategy are Missing

for Innovation

Doing Things Differently

Turns Out Policy is Very Hard Work, + Big Barriers, = Poor Results

Voluntary Action

Harder Than It Looks M

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ate

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Incentives and Strategy are Missing

for Innovation

Doing Things Differently

Business as Usual

Turns Out Policy is Very Hard Work, + Big Barriers, = Poor Results

Voluntary Action Voluntary Action

Enter Voluntary Action M

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Innovation

Doing Things Differently

New Public Policy

Voluntary Action Voluntary Action Psychic Benefits

of Voluntary Action

Don’t Talk About It, Be About It!

Now Let’s Talk Green Energy Markets!

Green Energy Options M

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Doing Things Differently

To Claim a Contribution to Climate Stabilization, Have To Go

Beyond BAU

“Additional” Reductions Can be Traced to a Specific Mechanism or Market

To Tackle Climate Change M

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Doing Things Differently

What Someone Can Sell You M

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Doing Things Differently

Leading to Moral Hazard M

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Doing Things Differently

Fighting Moral Hazard M

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Doing Things Differently

Recognize the “Additionality” Continuum

Test for and Communicate Additionality

Several Types of “Green Energy” • Renewable Energy Certificates • Power Purchase Agreements • Local Renewables (Green Tariffs/Community Solar) • Build Your Own

•  There Are Many Possible Permutations •  Options Available Can Vary Significantly by Time and Location •  Relative Economics Can Vary Significantly by Time and Location

Renewable Energy Certificates

•  Originally Conceived of for Compliance (RPS) Markets

Unbundled National RECs •  Often Deductible Against Your Carbon Footprint •  Often the Basis for Carbon Neutrality Claims •  No Additionality Requirement •  An Annual Commodity/No Long-Term Commitment •  Currently Abundant and Cheap (~$1 (equivalent to 1/10th of a cent/kWh)) •  No Impact on Project Financing

Power Purchase Agreements (PPAs) •  Directly Link You to a Project •  (And) Could be Tied to Long-Term Commitment •  (And) Could be Considerably More Expensive •  (And) Could Contribute to Project Financing •  BUT: Is Project Generating Compliance RECs •  IF SO: Is Supporting Compliance Additional? •  IF NOT: Is PPA Allocation Being Gamed?

Green Energy Tariffs, Community Solar •  Projects Probably Generating Compliance RECs •  (But) Could be Tied to Long-Term Commitment •  (And) Could be Considerably More Expensive if not in Surplus •  (And) Could Contribute to Project Financing •  BUT: Is Compliance Additional?

Build it Yourself On-Site, No RECs Generation •  Requires Capital •  Could be Cost-Effective Risk Management •  Doesn’t Count Against State Compliance Mandates •  Very Likely Additional

You Can Make a Difference! M

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Innovation

Doing Things Differently

Business as Usual

New Public Policy

Voluntary Action

+ Carbon Pricing Advocacy

Long-Term PPA (RPS)

On-Site (non-RPS)

+ Energy Storage

No Voluntary RECs (resist moral hazard)

Thank You!

•  Dr. Mark C. Trexler •  mark@climatographer.com •  503-913-0025 •  www.climatographer.com

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