The utility must generally supply some minimum power level or base load 24 hours per day every day of the year. Industrial plants, hospitals, and even residential customers with their refrigerators all contribute to this base load.
The generating plants that are the most economical to operate are used to supply this base load. These base load plants are usually large steam generating plants that cannot be started and stopped quickly. Since these are some of the least costly plants to operate, they are usually loaded or dispatched close to their maximum power level.
The EPA issued a press release today trumpeting the fact that companies such as Intel and Khol’s department stores have “used” vast amounts of Green Energy.
The press release says using more than 1 billion kWh of green power:
Kohl’s, second on the national top 50 list, joined Intel as the only two partners using more than 1 billion kWh of green power. Kohl’s increased its green power purchase to more than 1.4 billion kWh of green power annually. Staples more than doubled its green power commitment and Sony Corporation of America nearly doubled its green power purchase.
Pretty impressive. If you only read the press release, you would think there are windmills connected directly to every Kohl’s Department Store across America reliably powering your shopping experience.
However, if you drill down further, following the links deeper into the EPA website, it turns out that Kohl’s, Intel and the other organisations have purchased (mostly) Renewable Energy Credits or RECs for “the equivalent” amount of Green Power (GP) listed in the press release. They did not purchase the green power directly from the windmill or solar panel.
Aside from Kohl’s adding solar panels to some of their stores, this press release is about RECs.
Intel makes no bones about it.
Renewable energy certificates, or RECs, are the “currency” of the renewable energy market and are widely recognized as a having credible and tangible environmental benefits. The EPA estimates that Intel’s REC purchase has the equivalent environmental impact of taking more than 185,000 passenger cars off the road each year, or avoiding the amount of electricity needed to power more than 130,000 average American homes annually.
Intel’s REC purchase, which includes a portfolio of wind, solar, small hydro-electric and biomass sources, will be handled by Sterling Planet, a leading national supplier of renewable energy, energy efficiency and low-carbon solutions. The purchase will be certified by the non-profit Center for Resource Solutions’ Green-e® program which certifies and verifies green power products.
Renewable Energy Credits are a type of cap and trade training wheels where companies like Intel and Kohl’s purchase ‘green energy’ certificates and either sell them to another organization or ‘retire’ them and claim that your organization ‘consumed’ the electricity.
Keep in mind that a REC is created when a windmill, for example, spins enough to contribute 1000 kW/h of energy to ‘the grid.’ It doesn’t matter when, where or how long it took to generate the power. It doesn’t matter if the electricity generated contribute to the base load (it can’t since windmills and solar power are cyclical) or helped offset peak demand (very unlikely). It only matters that the power was generated.
Organizations will then ‘retire’ the REC claiming they consumed the green energy and issue a press release patting themselves on the back for being great stewards of the environment. Or something like that.
And, coincidentally, the EPA has several extensive and helpful guidelines (pg. 30) to help market the fact that your company or organization is purchasing ‘green energy’. But don’t go overboard, because you could wind up in trouble.