Renewable Energy Certificates (REC) Market Analysis - Global Industry Size, Share, Trends and Forecast, 2014 - 2024

Category : Energy and Power | Delivery Format : PDF | Status: Forthcoming | Report ID : ARC325

Renewable energy certificates (RECs) present the environmental attributes of the power that is generated from renewable energy projects. These certificates are marketed differently than commodity electricity. They are also known as renewable energy credits, green tags, tradable renewable certificates or green certificates. These certificates are used for disclosure, and marketing and compliance monitoring. The customers buy green certificates irrespective of their access to green power through their competitive electricity marketer or local utility. The customers can buy RECs without having to change electricity suppliers.

These certificates can be classified into different types of renewable energy produced such as biomass energy, solar energy, hydroelectric energy, geothermal energy, wind energy, and the certificate marketers across the world. Large number of rebates and tax benefits are provided for renewable energy based power generation. RECs lead to the progress of renewable energy sources market. An equivalent number of RECs are generated for every unit of electricity generated and these can be sold as tradeable commodity in various international markets. The buying of renewable energy certificates neutralizes the generation of conventional energy. Also, the buyer receives distinct electricity bill for the utility. However, large number of environmental organizations claims that no ecological benefits are offered by the certification method currently being used. This is set to decline the growth of market in the future.

Renewable energy generates electricity and is delivered through huge transmission wire network. These transmission wires or grid is divided into regional power pools and is often not inter-connected properly. In order to sell renewable electricity, a body was formed that distinguishes renewable electricity generation into two parts i.e. the electricity generated by renewable energy and renewable attributes of that electricity generation. These attributes are sold in international market as REC’s. However, no certificates are given for the electricity part of split as it is not considered as renewable or green energy.

Global warming resulted from the burning of fossil will increase the demand for renewable energy certificates. These certificates are utilized in international trade for the development of renewable energy sector. The renewable energy production cost is high and thus, these certificates will render an additional income to energy providers, thereby increasing their demand. Due to the rising population and increasing industrialization trends, the developing nations such as Africa and Asia have high demand for electricity. Also, owing to the rise in infrastructure development activities particularly in Asia, the demand for power has doubled up. In Asia, China is the frontrunner in terms of renewable energy investments. However, in Europe, U.K. and Denmark are leading in terms of investments in renewable energy. Owing to the rising focus on reduction of carbon footprints and green energy production, countries like Ireland and Scotland will emerge as the lucrative markets for RECs.

REC is an efficient market-based instrument that paves a way to increase the global demand for renewable energy. Purchasing an REC represents environmental leadership, and provides a signal to the market that the customer prefers consumption of renewable energy. These certificates also provide an extra income source to the power generators, thereby making it attractive to increase renewable energy production. The major players in the RECs market include Arcadia Power, 3Degrees, Carbon Solutions Group, 3 Phases Renewables Inc., Bonneville Environmental Foundation, Community Energy, NuPath Energy, Sky Energy, Inc., Mass Energy Consumers Alliance, Santee Cooper, EDP Renewables, Renewable Choice Energy, GP Renewables & Trading LLC, North American Power, and Windcurrent LLC among others.

Market Segmentation

Market by Geography

·         North America

o   US

o   Canada

o   Mexico

·         Europe

o   UK

o   Germany

o   France

o   Rest of Europe

·         Asia-Pacific

o   China

o   Japan

o   India

o   Philippines

o   Rest of Asia-Pacific

·         Latin America

o    Brazil

o   Chile

o   Rest of Latin America

·         Middle East and Africa (MEA)

o   South Africa

o   Saudi Arabia

o   Rest of MEA

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