Renewable Energy Certificates (RECs) Guide | CLOSE

Renewable Energy Certificates (RECs) Guide | CLOSE

Renewable Energy Certificates (RECs) in Voluntary Markets

One certificate equals one megawatt-hour of verified renewable electricity. Use RECs for market-based Scope 2 reporting. Pick the right registry, label, and vintage, then retire in your name. Do it properly or expect pushback in assurance.

What A REC Actually Is

A REC is an energy attribute certificate that proves a unit of renewable generation and transfers the right to make a claim about that electricity. It is not a carbon offset. It covers Scope 2 market-based reporting. A claim exists only after retirement in the account of the reporting entity. Treat anything else as inventory.

Why It Matters

Investors and auditors are looking for clean Scope 2 reporting, no double counting, and honest matching. Cheap, old, or far-away certificates may pass a basic check, but they will not convince anyone that your electricity is credibly green. If you want stronger claims, you need better instruments and tighter matching.

Core Certificate Programs And Labels

Type Where It Applies Unit What It Does Notes
US/Canada RECs Regional registries like PJM GATS, M-RETS 1 MWh Attribute tracking for renewable electricity Often Green-e certified for voluntary claims. SRECs exist in some states.
Guarantees of Origin (GOs) EU/EEA/CH via AIB hub 1 MWh Electricity disclosure and voluntary claims Used for supplier disclosure and corporate claims. Vintage and country matter.
REGOs United Kingdom 1 MWh UK disclosure and voluntary claims Post-Brexit scheme aligned to UK rules.
I-RECs Global, outside US/EU where no local EAC exists 1 MWh Mainstream international certificate for electricity Widely accepted by GHG Protocol, CDP, and RE100 members.
TIGR Selective global markets 1 MWh Tracking renewable electricity attributes Alternative registry to I-REC in some countries.
LGCs Australia 1 MWh Large-scale generation certificates Used for both compliance and voluntary claims.
P-RECs Fragile and energy-poor regions 1 MWh (label on I-REC) Layered impact label with peacebuilding benefits Think I-REC plus a verified social impact layer.
D-RECs Distributed and off-grid assets in emerging markets 1 MWh (label on I-REC/TIGR) Verification label steering funds to DRE projects Dual qualification, energy plus impact verification.
R-RECs Proprietary program 1 MWh Blockchain-enabled REC with traceability claims Check recognition with your auditor before use.

P-RECs and D-RECs are labels layered on underlying certificates such as I-RECs. They steer spend toward difficult geographies and distributed systems. R-RECs are proprietary and require extra diligence on acceptance.

Quality Screens That Actually Matter

Location And Grid

Same country or same interconnected grid strengthens the claim. Far-away certificates are fragile in audits.

Vintage

Recent generation year. Many programs limit carryback. Old stock is cheap for a reason.

Certification And Labels

Green-e and EKOenergy add guardrails. P-RECs and D-RECs add social impact. Use labels on top of a recognized registry.

Annual RECs Or Hourly Matching

Most buyers use annual matching. If you want a stronger story, go for hourly or sub-hourly certificates and match your load 24/7. You will need granular certificates, time-stamped data, and often a portfolio of technologies to cover nights and winters.

How To Buy RECs Without Tripping Over Yourself

Route What You Get Pros Watchouts
Bundled with Power (PPA or green tariff) Energy plus EACs Stronger linkage to your load, long-term price visibility Complexity, mark-to-market risk if VPPA, contract admin
Unbundled Market Purchase Certificates only Speed, flexibility on registry, tech, and labels Quality variance, need strong sourcing policy and retirement controls
Onsite Generation Certificates from your own asset Clear story, operational control Capex and O&M, intermittency, still need retirement logistics

Claims, Reporting, And Retirement

  • Use RECs for Scope 2 market-based accounting. Do not claim offsets for Scope 1 or 3.
  • Retire certificates in your legal entity’s account. No retirement, no claim.
  • Match location and period to your load. Annual or hourly depending on your target.
  • Disclose registry, project country, technology, and vintage in your ESG reporting.
  • If you buy impact labels like P-RECs or D-RECs, explain the impact logic in your report.

About “D-REDs”

“D-REDs” is not a standard REC category. If you meant D-RECs, that is the distributed renewable label described above. If you meant REDD or REDD+, those are carbon offsets for avoided deforestation and sit in a different market with different claims.

Procurement Brief Checklist

Commercial And Load
  • Sites and countries, annual MWh per site
  • Preferred matching window, annual or hourly
  • Budget range and contract length
  • Reporting frameworks used, CDP, SBTi, RE100
Certificate Specs
  • Registry preference, US, GO, I-REC, TIGR, LGC
  • Tech mix and new-build preference
  • Labels, Green-e, EKOenergy, P-RECs, D-RECs
  • Retirement account details and deadlines

Frequently Asked Questions

Are RECs the same as offsets? No. RECs are electricity attributes for Scope 2. Offsets address emissions outside your electricity use, often Scope 1 or 3.
Do P-RECs and D-RECs replace I-RECs? They label underlying certificates like I-RECs. You still retire the base certificate. The label adds impact criteria.
What vintage is acceptable? Use recent generation. Many frameworks require same reporting year or close to it. Older vintages weaken claims.
Can I claim 24/7 clean power with annual RECs? No. For 24/7 claims you need hourly matching with granular certificates and a diversified supply profile.
Are blockchain RECs automatically better? Not by default. Traceability helps, but you still need registry acceptance, location fit, and proper retirement.

Build A Credible REC Strategy With CLOSE

Share your sites, load, registry preferences, and reporting targets. Get a sourcing plan, quality screens, and retirement controls mapped to your audit needs.

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