Driven by Corporate Demand: The Shifting Dynamics of Global EAC Markets

April 24, 2018 Jenna Bieller

In March of 2018, members of the Schneider Electric Cleantech & Renewables Team attended theRECs Amsterdam, EAC trends 8th edition of the REC Market Meeting, hosted by RECs International. This annual event brings together market experts, government officials and other stakeholders in renewable energy to discuss market trends in energy attribute certificate (EAC) markets, the development of EAC tracking systems and strategies to accelerate the transition to a low-carbon economy. This year’s theme was: Valuing consumer action.

While always a worthwhile event, this year’s Market Meeting saw a level of diversity and engagement that exceeds that of years past. The nexus of these attributes of the event—diversity and engagement of attendees—mirrors the changes taking place in the broader markets for renewable energy. Globally, corporate renewable energy consumers are becoming more diverse and more intimately engaged in the strategy behind their clean power procurement than ever before. Increasing global opportunities in renewables, mechanisms for achieving goals and guidance on how to navigate the various markets define the state of today’s renewable energy buying landscape.

Global expansion of renewable energy purchasing

The number one trend at the REC Market Meeting was the globalization of corporate demand for renewable energy. This shifting market dynamic was reflected in the attendees; leading buyers of renewable energy are looking at more global opportunities and providers were asking about the best ways to develop solutions where they are needed.

“No matter where developers had projects, we have client demand” ~ Kevin Maddaford, EAC Manager, Schneider Electric Energy & Sustainability Services

Though solutions are emerging across the globe, competition in markets has made them increasingly complicated. Once upon a time, sourcing a desired renewable energy product at a low price was easy. Due to demand from companies and increasingly ambitious global targets, EAC markets are becoming more volatile. From RECs in the United States to GOs in Europe, the price of EACs in mature markets is becoming more volatile. Markets are moving more quickly and finding solutions that fit a client’s needs is an increasingly complex process.

solar EACAt the same time, corporates are seeking out more innovative solutions, and have an appetite to buy them in the farthest reaches of the globe. For example, on the heels of Microsoft’s announcement of the first renewable energy power purchase agreement (PPA) in Asia, a 60 MW solar project in Singapore, the Singapore Ministry of Environment attended RECs in hopes of uncovering more information on corporate demand and the limitations and opportunities for renewable energy solutions in the country. This serves as a market signal that C&I buyers’ demand for renewable options is considerable and catching the eye of national governments.

New ways to reaching global goals

Thanks to a growing class of companies making commitments to renewable energy, markets are becoming more diverse in the possible approaches to achieving these goals. Members of the RE100, companies committing to renewables via the Science-Based Targets Initiative (SBTi) and companies making other public commitments to clean power are starting to look to new ways to achieve their goals. Although EACs will always be a part of the solution, there is a growing trend toward PPAs for larger buyers. There remains a notion that PPA buyers must have a large electricity load, but emerging strategies such as aggregation and buyer’s consortiums are allowing smaller energy users to participate in that market as well.

There was also discussion of new mechanisms that companies can use to address their scope 1 and/or scope 2 emissions. Several presentations highlighted the consumer interest for options to green biogas EACtheir gas supply. Certificate markets for electricity (RECs, GOs, I-RECs) have proven their value, but companies making 100% clean power goals are hoping to close the gap using products such as biogas certificates. With increasingly rigorous sustainability regulations and procurement standards, we can expect green gas products to become more prominent in the coming years.

Good practice vs. best practice

During the conference, RECs International introduced their Renewables Good Practice (ReGP) guidance document. The recommendations made in the ReGP are intended to support electricity end-users in making claims associated with procuring renewable electricity. The guidance is intentionally named a ‘good practice’ versus ‘best practice’, as it provides a minimum of reporting guidelines in approaching different markets to give buyers a degree of confidence when making claims on renewable energy. The guidance makes clear that it by no means should serve as the rules or engagement or definition of market boundaries. Market players are encouraged to go above and beyond the requirements set forth in the guidance as a way to assert leadership.

To learn more about the state of renewable energy purchasing in Europe, we invite you to read our new eBook: Understanding Renewable Energy Certificates in Europe

 

Contributed By: Kevin Maddaford, Kurt Verstraelen and Gary Cafe

 

 

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