Tuesday, May 12, 2009

Debating REC's

Last month UC Santa Cruz Professor Daniel Press published an oped essentially lampooning the practice of purchasing "Renewable Energy Certificates" as little more than a foolish attempt to assuage environmental guilt without actually doing anything positive for the environment.

Earlier this week, Arthur O'Donnell of the Center for Resource Solutions took to the opinion pages of the Mercury News in rebuttal, claiming that when you buy Renewable Energy Certificates, your money goes to "pay for the environmental benefits that we all enjoy." Who's right?

Press argued that the Certificates allow people to purchase the "environmental attributes" of alternative energy, "but not the electricity itself. ":

"To understand why, consider the economics of renewable-energy production. Wind farms in California and Texas sell electricity on the wholesale market, with a significant boost from federal production tax credits for renewable energy. But prices for renewable-energy certificates, as negotiated by brokers and power producers, are very low — 10 percent of the difference between the cost of producing nonrenewable and renewable energy, and far too little to actually spur production.

By harnessing the power of the word "renewable" for spin and gimmickry, certificate brokers have persuaded hundreds of colleges to buy the "environmental attributes" of wind, landfill gas and solar energy — but not the electricity itself. "Environmental attributes" is the sort of mumbo-jumbo that's hard to explain in news releases and on Web sites, so thousands of certificate buyers simply say that 100 percent of their power is green."

Enter Mr. O'Donnell:

"No one is suggesting that renewable electrons suddenly begin flowing into your house when you purchase a certificate. You're getting the same mix of sources you always got. But you've taken ownership over a specific, discrete amount of renewable-energy generation that no one else can claim, and your money has gone to the wind farm or other source, helping make renewable energy more profitable (or at least less unprofitable) to build."

This sounds suspiciously like those goofy huckster ads you hear on the radio, pitching you to "name a star" for someone you love ("Your star will be entered in book form in the US Copyright Office!!!!).

So, from where I sit, it seems like Renewable Energy Certificates are a nice source of income for the brokers who traffic in them, and an admirable expression of support for renewable energy, but perhaps less of a game-changer than their proponents would like you to believe.

I score this one for Professor Press.