Validating your Renewable Energy Certificates (RECs) purchase amounts against the volume of electricity you have been contracted for and consumed is a critical step for businesses to ensure compliance, accuracy, and financial integrity.

However, it can be a time-consuming and resource-intensive process for businesses to validate renewable energy certificates. To avoid depleting company resources on manual REC management, consider platforms that can centralize your REC inventory, automate calculations, and provide transparent reporting. 

Understanding Renewable Energy Certificates (RECs)

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Renewable Energy Certificates (RECs) are market-based instruments that certify the generation of 1 megawatt-hour (MWh) of electricity from renewable sources, such as wind, solar, or hydroelectric power, and its injection into the power grid. Energy buyers can purchase RECs to support and claim their use of renewable energy. These certificates can be acquired alongside physical electricity (bundled) or separately (unbundled) from the actual power purchase. In sustainability reporting, companies must demonstrate that they have purchased and canceled a sufficient number of RECs to match their electricity consumption. This process allows them to claim that they are supplied by 100% renewable electricity.

How to Monitor your RECs

Effective monitoring of your RECs requires checking the alignment between three key factors: 

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• Contractual Electricity Volume: The amount of electricity specified in the PPA or supply contract that you will receive.
• Actual Electricity Consumption: The amount of electricity you actually consume and are billed for.
• REC Holdings: The number of RECs owned and canceled that can be used to claim renewable electricity consumption.

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Ideally, these three volumes end up being the same for accurate reporting and compliance. This allows you to:

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1. Report zero emissions related to your energy supply (as you have the right amount of RECs to validate this).
2. Confirm that the suppliers/ PPA contractors have invoiced you for what you have actually agreed upon and consumed.
3. Check that your suppliers/ PPA contractors have also sent you the right amount of RECs to cover your consumption amounts, as you can hold them accountable if not. 

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REC validation is important in all the different kinds of electricity contracts a buyer may enter into. Here is a break down of some common contract types: 

 PPAs

PPAs typically include guaranteed electricity production volumes. However, if the asset underperforms, the power producer is often obligated to deliver the agreed-upon number of RECs. They will do this by purchasing RECs from an issuing body. Businesses must closely monitor actual electricity production against contract specifications and ensure the correct number of RECs are received.

Green Tariffs

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Green tariffs are another option for consumers to purchase electricity generated from renewable sources. Entering into supply contracts with suppliers directly means businesses must track electricity consumption, verify billing accuracy, and confirm corresponding EAC cancellations.

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Some businesses may choose to take their commitment a step further by seeking RECs that have stricter environmental standards. Examples include RECs that meet EKOenergy criteria. Due to stringent requirements, this might involve additional verification processes with suppliers.

Data Consolidation for Effective Validation

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Managing a diverse portfolio of electricity contracts presents significant challenges for organizations. Accurately tracking electricity consumption, associated RECs, and billing information is crucial for compliance and financial management. This has historically been managed on spreadsheets by companies. However, as electricity contracts become more complex and scrutiny on accurate emissions reporting grows, it becomes increasingly important to have oversight on all of your RECs.

Where Does Flexidao Come In?

Flexidao streamlines your REC validation process by centralizing all electricity contract and certificate data on a single platform. This frees your organization from having to sift through scattered documents and emails, allowing easy access to renewable energy certificate price history alongside your own purchase records.

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Flexidao’s platform is tailored to meet the specific needs of corporate energy buyers who need better ways to validate renewable energy certificates. By automating data processes, simplifying reporting, and ensuring compliance, our solution helps you manage risks, optimize financial performance, and make strategic decisions with confidence. 

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Speak with our experts to optimize your electricity certificate management portfolio today.  

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