Climate change has become a pervasive global concern, prompting a growing shift towards renewable energy sources to replace traditional fossil fuels that contribute to carbon emissions. While achieving these sustainability goals can seem like a daunting challenge for businesses, I-RECs come as an easy solution to offset carbon footprint based on energy consumption without having to enter into a long-term agreement.

WHAT ARE THE ADVANTAGES OF I-RECs

IRECs are a market-based instrument that allows businesses to procure this energy even in countries that don't have their own certification systems. It certifies that the bearer owns one megawatt-hour (MWh) of electricity generated from a renewable energy resource.
I-RECS provide companies and individuals with a convenient method to counterbalance their carbon footprint and shift towards sustainable energy practices by acknowledging the renewable sources from which energy is derived and the associated renewable energy attributes. End-consumers can utilize, redeem, or trade the allocated I-RECs, thereby deriving benefits from their usage.

WHAT ARE THE ADVANTAGES OF I-RECs

  • It aids in reducing the carbon footprint of any organization, thereby minimizing pollution generated during day-to-day operations.
  • It assists in mitigating climate change while also bolstering the renewable energy market through the promotion of fair and reliable trading of International Renewable Energy Certificates (I-RECs).
  • It aids corporations in attaining their ESG objectives. I-RECs provide a competitive advantage to your portfolio, appealing to investors.
  • I-REC empowers purchasers to select the precise source and supplier for acquiring Renewable Energy, whether from local or international markets.

     

WHO CAN BENEFIT FROM IT?

  • Corporates dedicated to initiatives such as Race To Net Zero or RE100, or those striving to achieve sustainability objectives but face challenges in obtaining renewable energy through physical infrastructure, can utilize I-RECs to effectively diminish their carbon footprint.
  • Businesses aiming to assert that their products are manufactured using renewable energy and enhance their brand reputation can procure I-RECs to substantiate their claims regarding the environmentally friendly attributes of their products.
  • Businesses seeking to decrease the carbon footprint within the supply chain can conveniently choose I-RECs.

I-RECs function as adaptable and effective instruments in promoting the expansion of renewable energy capacity on a global scale. They play a pivotal role in encouraging investments in renewable energy initiatives, aiding organizations and governments in achieving sustainability objectives and reducing carbon footprints. Undoubtedly, IRECs are integral to the worldwide endeavor to shift towards a sustainable and eco-friendly energy landscape.

WHAT IS ADDITIONALITY IN IRECs AND HOW CAN IT SUPPORT YOUR SUSTAINABILITY STRATEGY?

  • Additionality in a Sustainability strategy refers to the extra positive impact that a particular action or project has, beyond what would have occurred anyway.
  • In other words, it assesses whether a sustainability project/ intiative is truly making a difference by causing an additional positive change in the Environmental/ Social/ Economic aspects, compared to what would have happened without that initiative
  • In the case of Renewable Energy projects, tying up a long term IREC procurement contract with a Project Developer ensures that new Renewable Energy assets get built because of this commitment. Typically this is done through a Virtual Power Purchase Agreement , or VPPA.
  • When one procures IRECs from the open market, these are typically from existing RE Assets which have already been built. These are non- additionality IRECs, and are priced at a fraction of the cost of Additionality-based IRECs.

Ensuring additionality is important for maintaining the integrity and effectiveness of Sustainability efforts, as it ensures that new resources are directed towards initiatives that genuinely contribute to positive change.

WHAT TO BE AWARE OF WHILE PURCHASING IRECs?

  • IRECs are not a replacement for a holistic Net Zero/ Sustainability strategy. While every business has a unique roadmap, maximizing displacement of conventional energy sources through a mix of on-site and off-site (Open Access) RE generation and VPPAs can typically offset ~ 90% of your Renewable Energy targets. The residual 10% can be met through the purchase of non-additionality IRECs through the open market/ Developers.
  • Net Zero and other standards also allow the offset of Scope 3 emissions through procurement of additionality IRECs. To learn more about Scope 1, Scope 2 and Scope 3 emissions, visit our blog here -> https://vibrantenergy.in/blog/introduction-to-vppa-series-understanding-scope-1-2-and-3-emissions
  • While every IREC translates to a MWh of Renewable Energy, not every IREC is treated equal. There are Solar, Hydro, and other IRECs based on the Renewable Energy source. Pricing of these IRECs also vary widely based on which IREC your business chooses to procure.
  • You can choose to set up an IREC account directly with the registry, this ensures that the actual IRECs can be credited to your account (almost like a bank account. These IRECs are now available in your account to be retired or you can also trade them onwards to group entities/ third parties.
  • Traceability of the IREC is becoming an increasingly important metric as recently there has been increased scrutiny on the veracity of green energy certificates including IRECs. Working directly with Developers who own the asset, rather than traders, ensures that customers have visibility on the source and authenticity of every IREC generated.

I-RECs function as adaptable and effective instruments in promoting the expansion of renewable energy capacity on a global scale. They play a pivotal role in encouraging investments in renewable energy initiatives, aiding organizations and governments in achieving sustainability objectives and reducing carbon footprints. Undoubtedly, IRECs are integral to the worldwide endeavor to shift towards a sustainable and eco-friendly energy landscape.

To learn more about  I-RECs and how vibrant Energy can you help your business achieve your Sustainability goals, write to us at sales@vibrantenergy.in