|
|
| Home » Carbon trading » Renewable Energy Transactions
|
|
Renewable Energy Transactions |
|
Renewable energy resource refers to resources, which are rapidly replaceable by natural processes. Sunlight, timber, hydropower are examples of renewable energy resources. Economics attempts at provision of market based solutions for such natural resource exploitation problems. Renewable energy transaction is one such thing.
Human civilization makes use of both renewable and nonrenewable energy resources on a daily basis. Now the bottom lien here is the sustainable and efficient use of these resources towards achievement of a greener and cleaner earth. For understanding this concept one has to begin with the definition of a renewable energy certificate.
Renewable Energy Certificate
Also referred to a REC it is a type of market-based commodity. It facilitates economic transaction between purchasers and sellers of renewable energy bypassing the constraints laid down by electricity grid. Renewable energy certificate allows generators of renewable energy to seamlessly deliver ‘green power’ benefits to customers. Renewable energy industry has considerably benefitted from this resultant widening of market base, beyond local / regional utilities. These programs now even have corporate houses and residential communities as end users. Due to its technical nature any premium paid by users of green power effectively lends financial support for a specific renewable resource in total generation portfolio. RECs were initiated for primarily widening potential customer base. Electricity purchasers via RECs can provide clear financial signals for provision of renewable electricity. At present US houses two different types of REC markets. One is a voluntary market and the other is a compliance driven market. Consumers who wish to cut their environmental footprint or support concept of renewable energy drive the abovementioned voluntary market. Government regulations drive the compliance market in renewable energy. Renewable energy transactions are part of an evolving market phenomenon in use of renewable resources. It will take some time to iron out the differences in approach or methodology that exist at present in different countries around the globe.
|
|
|
|
|
|