What are Key Standards for Renewable Energy Certificates (REC) in Emerging Markets?

Posted : January 19, 2024
RECs

There are many standards for renewable energy certificates across the world. However, two standards are most commonly seen across emerging markets of Asia, Africa and South America.

Renewable Energy Certificates (REC)

Renewable Energy Certificates are verifiable certificates for tracking the flow of renewable energy into and out of electrical systems.

RECs are produced when a renewable energy source (like wind, solar, hydroelectric, and others) generates one MWh of electricity and sends it to an electricity grid.

These certificates are tradeable commodities, where the owner of the certificate holds the rights to the non-power attributes of the electricity. These certificates are eventually purchased by companies who want to prove that they are using renewable energy. These certificates are then retired.

As such, the certificates are a an important and auditable way to relate MWhs of renewable energy to environmental and financial benefit.

Issuing RECs

There are many standards that support the issuance, tracking and retirement of renewable energy certificates. These standards might use different names for the resulting certificate. For example, in Europe, they’re known as Guarantees of Origin (GOs), while in the US, they tend to be known as RECs.

In general, each standard uses the system whereby each MWh is equivalent to a single certificate. Each of the standards also shares the mission of promoting a low-carbon economy and facilitating the integration of cleaner energy sources into national grids.

Issuing RECs in Emerging Markets

There are two REC standards of most interest in emerging markets: I-REC and TIGR.

International Renewable Energy Certificates (I-REC)

International Renewable Energy Certificates (I-REC) is administered by the International Tracking Standard Foundation (I-TRACK). The global registry for I-RECs is maintained by Evident.

Where GOs and RECs function as tracking systems in their respective markets, I-REC provides a tracking system to developing countries and countries outside the US and EU.

As of 2023, I-REC covers 53 countries about 95% of the international RECs volume. Read more at our dedicated article about I-REC here.

Tradable Instrument for Global Renewables (TIGR)

Tradable Instrument for Global Renewables (TIGR) was created by APX, who also maintains the TIGR registry. TIGR is the second largest international REC registry, accounting for about 2% of the international RECs volume.

As of 2023, TIGR covers 12 countries. This includes Bangladesh, China, Guatemala, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

What are the Benefits of Issuing RECs for Asset Owners?

These two standards offer an opportunity for owners of renewable energy assets in emerging markets to issue and sell RECs. By selling RECs, project owners can realise additional revenue and gain financial advantages from their existing assets. Selling RECs is a part of maximising the return from these large, complex assets.

Participating in this system has some additional reputational benefits. REC registration highlights a commitment to sustainability and brings power companies into the orbit of renowned organizations like RE100, CDP and Greenhouse Gas Protocol.

Issuing RECs also allows corporates and other electricity consumers to make a direct contribution to the fight against climate change. When renewable energy assets register on a REC standard, they make this contribution possible.