What's an I-REC (International Renewable Energy Certificates)?
I-RECs as an instrument that allow businesses to procure this energy even in the countries that don’t have their own certification systems. Each I-REC represents proof that 1 MWh of renewable energy has been produced and takes into account the multiple environmental benefits that are equivalent to the RE generated via that one certificate by generating a unique ID for each I-REC.
An international renewable energy certificate (I-REC) represents transferrable proof that one MWh of electricity was produced from renewable energy sources and added to an electrical grid. Purchasing an I-REC allows the buyer to claim consumption of one MWh of renewable energy. I-RECs can originate from wind, solar, ocean energy, biomass, hydropower, landfill gas, aerothermal, geothermal, and landfill gas projects.
I-RECs as an instrument allow businesses to procure this energy even in the countries that don’t have their own certification systems. Each I-REC represents proof that 1 MWh of renewable energy has been produced and takes into account the multiple environmental benefits that are equivalent to the RE generated via that one certificate by generating a unique ID for each I-REC. This ID in return tracks the asset that has generated that RE, enabling the purchaser to cross-check the authenticity and quality of clean energy generated. Generated from an underlying RE asset, through this process I-RECs prevent double-counting, double issuing, and false claiming of emissions reductions at the source.
I-RECS offer companies and individuals a convenient way to offset their carbon footprint and transition to green energy by simply claiming the energy that comes from renewable sources & renewable energy attributes of that electricity. The end-consumer can avail, redeem or trade the issued I-RECs and benefit from the same simultaneously.
How does I-REC work ?
The RE generators can register their plants on the I-REC Registry by making an application along with a set of plant documents. The application is then validated by the Registry and they seek clarity (if required). After the validation, an independent audit may also be initiated by the Registry based on their discretion. Once the registration is approved by the Registry, the generator can furnish the meter readings from time to time to get I-RECs issued on the electricity generation from the RE asset. The end-consumer or a trader can then purchase the issued I-RECs and may redeem/retire or trade the certificates respectively. The revenue generated out of the sale of I-RECs can be put back into the system by the RE generator to finance development of new RE projects. In effect, the I-REC mechanism encourages development of new RE projects and reducing the carbon emissions across the world while passing on the benefit to the end-consumers.
How do I-RECs benefit businesses?
Some of the key benefits for businesses includes
It helps in the reduction of carbon footprint of any organization, followed by less pollution generated in your everyday operations.
It helps in mitigating climate change, I-RECs also support the overall renewable energy market by ensuring fair & reliable trade of RE.
I-REC gives purchaser the freedom to choose where exactly they buy RE from, both the source and the supplier, from both local or international markets.
It helps corporates to achieve their ESG goals, I-RECs give a competitive edge to your portfolio for their investors.
IRECs serve as a flexible and efficient tool to incentivize the growth of renewable energy capacity globally, facilitate investment in renewable energy projects, and help organizations and governments meet their sustainability and carbon reduction goals. They are an essential component of the global effort to transition to a more sustainable and low-carbon energy future.