Going green is a top priority across the globe. Europe’s recent energy crisis, and recommitment to reaching energy goals, emphasize the urgency of making the switch and embracing renewable energy. Social and environmental awareness has helped increase the push for greener energy sources. Countries around the world are implementing renewable energy production infrastructure and creating legislation requiring organizations to use specific quotas of green energy, such as the UK’s RO. The demand for renewable energy has led to a profitable economy developing around manufacturing, consumption, and trade. The economy around trading certificates has led to the development of a credible way of tracking the energy’s origin.
What are EACs (energy attribute certificates)?
EAC (energy attribute certificate) is an umbrella term for official documentation that proves renewable energy consumption.
Each EAC accounts for 1 MWh (megawatt hour) of energy that has been produced by a renewable resource and added to the power grid. EACs are essential for any energy producer or consumer who wants proof that indicates their energy came from a verifiable green source and is not gray energy (energy produced from polluting sources, such as fossil fuels). It is particularly useful for organizations looking to fill quotas of green energy without installing complex infrastructure such as solar panels or turbines that would allow them to produce the power independently, or organizations looking to supplement power produced independently.
There are different forms of EACs, and each varies by geographic location. These include:
- GoOs (guarantees of origin) in Europe
- RECs (renewable energy certificates) in the US and Canada
- I-RECs (international renewable energy certificates) in developing markets across Asia, Africa, Latin America, and the Middle East
These certificates each play the role of proving that the energy attribute they represent originates from a verifiable renewable energy asset, which can be identified through the information on the certificate.
Some of the information EACs contain includes:
- The specific location of the renewable energy resource that the energy originates from
- The specific resource/technology used (for example, solar, wind, water, etc.)
- The volume of green electricity the holder owns (represented by the number of certificates in their possession)
- The period the certificate is valid for (after which, or upon consumption, the certificate expires and must be canceled)
Why invest in EACs?
The value of EACs varies by supply, demand, and source, but with the rise of renewable energy likely to last for the foreseeable future, market demand will continue to rise. This is illustrated by statistics from the AIB (Association of Issuing Bodies), which show the increasing production of GO certificates in recent years.
Buying EACs has a variety of benefits for both market participants and consumers. These include:
- Reducing the global carbon footprint by encouraging the use of renewable energy
- Supporting the renewable energy market by encouraging renewable energy production
- Providing market participants and consumers with clear information as to the specific origin and source of the energy
- Access to renewable energy without installing costly infrastructure such as solar panels
- Promote renewable energy use and open dialogue within your community
- Ability to participate in a relatively new and extremely profitable market that has massive economic potential
- Joining a growing market before it becomes overcrowded
- Encouraging renewable energy production, reducing the demand for fossil fuels, and promoting eco-friendly alternatives
Where does trading come in?
Like in any trading market, the value of EAC certificates is set by market demand, and as demand for renewable energy surges, so have market prices. But unlike other trade markets, like the stock market, which were able to evolve slowly and develop technological infrastructure to meet growing demand organically over time, the EAC market doesn’t have the same luxury. Sudden growth and demand that continues to rise mean that the EAC market has managed to reach unprecedented levels of growth without the infrastructure to support trade scaling.
Until recently, market participants managed many of their activities manually, using tools such as spreadsheets to store their portfolios. But as trades become larger and more granular, going through each certificate to ensure it matches trade specifications and adding changes manually to a spreadsheet is impacts productivity and risk.
Bringing efficiency to the workflow is essential for the EAC market to reach its potential, and for that to happen, market participants need technological infrastructure that can support more complex trading. The demands and scope of the EAC market have outgrown temporary solutions such as spreadsheets. EAC market participants desperately need a solution designed with their needs in mind.
Simplify your environmental certificates workflow with Cerqlar
The solution to addressing all the current environmental workflow challenges is by implementing automation. Automation will not only streamline the current workflow but also eliminate the risk of human error. CerQlar has created a solution designed specifically to meet the needs of EAC market participants. The CerQlar platform allows market participants to automate the most challenging parts of the environmental workflow and allows market participants to scale their trading and leverage growing market opportunities.
CerQlar’s features include trade capturing, contract templates, and an advanced position view that allows market participants to see their entire portfolio gathered from various registries on a single dashboard. This allows market participants to access the necessary information to participate in time-sensitive trading opportunities while avoiding issued payments, delayed deliveries, and other errors.
