Executive Summary 5

Renewable Energy Certificates 7

Overview 7
Background 8
Growing Interest in RECs 10
REC Certification 11
Competitive Electricity Suppliers,
REC Marketers and Brokers 11
Utility Green Pricing Programs 12
Prices of RECs 14
Economic Differences between Renewable Resources 15
Location of Generation 15
Impact of Regulatory Compliance Markets 16
Purchase Volume 16
Level of Market Development 16
Benefits and Barriers to REC Market Development 16
REC and the Factor of Additionality 18
Eligibility Criteria for RECs 20

Market Applications of RECs 21
Tracking and Verification of RECs 21
Product Certification 23

REC Markets 26
REC Compliance Markets 26
Texas 28
New England 29
New Jersey 31
Massachusetts 32
Nevada 35
Voluntary Markets 38
REC Sales 38
Pricing 41

RECs in State Renewable Portfolio Standards 47
State Identification of RECs 47
Tracking of Renewable Attributes 50
Online Certificate Tracking Systems 51
Emissions Allowances Provided to Renewable Energy Generators 53

REC Tracking 56
Need for REC Tracking 56
REC Tracking Methods 57
Contract Audits 57
Certificate-Based Tracking Systems 58
Operation of Certificate-Based Tracking Systems 58
REC Tracking Systems 60
Texas RECs Program 62
New England GIS 64
Wisconsin's RRC Program 66
Ontario's Environmental Tracking
System Program 66
Others 67

Retail Products 71
Renewable Energy Certificates 71
Green Certificates 72
Green Tags 72
Carbon Offsets 74
CleanWatts 74
Clean and Green Credits 75
Renewable Energy Credits 76
CoolWatts 76
Climate Smart 77

Certificate Marketer 78
3Degrees 78
3 Phases Renewables 79
Direct Access 79
On-site Generation 79
Renewable Energy Credits (RECs) 79
Community Choice Aggregation (CCA) 80
Green Power Scheduling 80
Bonneville Environmental Foundation 80
Carbonfundorg 81
NativeEnergy 82
Pacific Gas & Electric 83
Renewable Ventures 84
Choose Renewables 85

Certificate Brokers 87
Amerex Brokers 87
Cantor Fitzgerald Environmental
Brokerage (CantorCO2e) 88
Chicago Climate Exchange 88
Element Markets 89
Evolution Markets 90
GFI Group 91
GT Energy 93
Natsource 93

Challenges Expanding REC Markets 95
Financing 95
Marketing and Communications Issues 97
Geographic Limitations 98
Ownership Issues 99
Ownership under PURPA Contracts 99
Ownership under Net Metering 100
Ownership for Systems Receiving Subsidies 101
Substantiation and Verification 103
National Markets and REC Liquidity 105
Environmental Claims 107
Emissions Markets 109

Canada's Renewable Tracking System

Initiatives 112
Ontario Environmental Tracking System Program 112
Other Provinces 113

Future of REC Developments 114

Appendix and Glossary 117

Glossary 120

About the Publisher 130

List of Figures and Tables

Figures
Figure 1: Diagram - Renewable Energy Certificate 7
Figure 2: US States with Renewable Portfolio Standards 27
Figure 3: Sales of Green-e Certified Renewable Energy by Customer Type (998-2006) 39
Figure 4: Sales of Green-e Certified Renewable Energy by Product Type (1998-2006) 40
Figure 5: Current Status of Tracking Systems in North America 61
Figure 6: US States included in EPA CAIR Proposal 111
Figure 7: Green-e Energy Certified Sales by Resource Type 117
Figure 8: Green-e Energy Certified RECs by Resource Type 117
Figure 9: Diagram - Green Power vs REC Transactions 119

Tables

Table 1: Certification Fee for Utility Green Pricing Programs 14
Table 2: Total Sales of Green-e Certified Renewable Energy (2006) 41
Table 3: Renewable Energy Certificate Product Offerings 42
Table 4: Sample Range of Voluntary Market REC Prices for New Sources 45
Table 5: Green Tag Products 73
Table 6: State RPS Requirements 118
Table 7: Marketers Offering Green-e Energy Certified RECs (2002-2006) 119