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• What is a Renewable Energy Certificate (REC)? (PDF 161KB)
  
  
• What is 'clean energy' and why is it needed?
  
  Clean energy is electricity generated mostly from renewable energy sources such as solar, wind, geothermal, hydroelectric, and in certain instances, low-emission energy sources, such as land-fill gas, fuel cells, micro-turbines, and combined cycle co-generation.  In contrast to traditional energy sources – e.g., coal, gas and oil-powered plants – clean power sources boast drastically reduced, net environmental impacts.  Using clean energy in lieu of energy from traditional sources has a positive impact on the environment.
  
  Traditional power plants can cause global climate change, acid rain, smog, toxic mercury emissions, consumption of water resources and pollution of water bodies, on-site land impacts such as a permanent plant footprint and off-site land impacts such as solid waste disposal and fuel processing.  These impacts can range in severity, depending upon the age of the power plant, the size of the plant, the cleansing technology employed to ‘scrub’ plant emissions, the plant’s waste disposal procedures and various other factors.
  
  
• Is clean energy available to consumers and if so, at what cost relative to energy from traditional sources?

  As electricity markets evolve, consumers have the opportunity to choose who will provide their electricity, including choosing between different kinds of power generation sources.  At the same time, changes in the electric industry, such as deregulation, are giving consumers greater choice, advancing technology and other market factors are making the clean energy choice more practical.  After decades of research and development, several sources of renewable energy have become available to consumers at competitive prices in many areas of the United States.  One of the major factors driving this improved competitive position for “renewables” is the substantial price increases for oil and natural gas that have occurred during the past year (and that are likely to prevail for a number of years).  In addition, other regulatory and economic conditions, including restrictions on power plant emissions and the need for increased electric generation capacity, have provided an additional impetus to expand the use of renewable energy.

  Early activity in deregulated states demonstrates market demand for clean power in the residential market running between one percent and three percent of households, respectively.  Roughly 1.0 billion kWHs of clean power annually is now sold to residential customers.  
  
  

• What are the benefits of increased clean power generation?
  
  The potential benefits of increased clean power generation are substantial.  In addition to the reduced environmental impacts, e.g., preventing climate change, reduced acid rain, less waste, etc., benefits include the potential for increased long-term price stability, enhanced electrical capacity and reliability, and reduced siting problems for energy-producing facilities. 
  
  
• What hurdles must be overcome to stimulate the clean power market?
  
  Even though some clean power demand and supply exist throughout the United States, the clean power ‘market’ can neither be considered robust nor efficient.  Increased clean power generation requires increased demand from large, institutional – municipal and corporate – consumers.  There are a number of hurdles impeding municipal and corporate demand for clean energy, like information gaps – energy consumers lack information about what renewable energy options are technically feasible and economically viable; even where the information is available, it may not be credible, as consumers have concerns about whether clean energy and its related environmental benefits can be tracked and substantiated, when the consumers are located great distances from renewable energy generators.  In addition, consumers encounter infrastructure-related barriers, as there is no exchange mechanism to contractually transfer clean energy from generators to consumers through several regional power grids.
  
  
• What is ERT's Clean Power Program and what is its goal? 
  
  ERT’s Clean Power (EcoPower®) Program provides services to overcome the barriers that prevent the purchase of clean power.  By defining a clean power product and providing clear, substantiated assurances to consumers about the clean energy they’re buying, ERT’s Clean Power Program is stimulating the market for clean energy in the United States, allowing economic forces to do the work of improving the environment.
  
  

• What specific services does ERT's Clean Power Program offer? 
  
  Specific services of ERT’s Clean Power Program include:
  
  

  • Substantiating the ‘environmental attributes’ of given blocks of energy and designating those blocks as sufficiently ‘clean’ to carry the EcoPower® label;

  • Establishing a Power Scorecard Rating System that ranks the environmental performance of various blocks of clean power;

  • Marketing blocks of EcoPower® and then brokering their sale from generators to large consumers, like municipalities, serving as an unbiased intermediary;

  • Developing and advertising an EcoPower® ticket program that assures consumers they have a unique claim to the clean power they’ve purchased;

  • Tailoring the billing systems for EcoPower® tickets to the needs of both the consumer and the supplier of clean energy;

  • Creating a post-sale audit system for EcoPower® energy blocks and issuing periodic substantiation reports. 

  The Power Scorecard Rating System, ERT’s substantiation services (both pre- and post-sale), and its marketing activities help overcome the informational barriers that hinder the development of an efficient clean power market, and EcoPower® tickets allow clean power that is supplied in one geographic area to be bought in another area.
  
  

• What does it mean to substantiate a given block of energy as 'clean power', and then to designate it at EcoPower®?
  
  ERT will identify and substantiate specific blocks of renewable energy and clean power as EcoPower®.  EcoPower® is a registered service mark owned exclusively by ERT, and ERT currently retains all rights to the associated trademarks.

  In order to qualify as EcoPower®, a block of power must meet the following criteria:
  
  

  • a minimum of 10 percent new renewable energy, defined as renewable energy sources that have been installed since January 1, 1998, or are contracted to be built within 12 months after a contract for EcoPower® is made;

  • a maximum of 90 percent of EcoPower® generation from existing renewable energy sources (such sources cannot replace the minimum 10 percent new renewable portion);

  • A minimum of at least 50 percent of the EcoPower® mix must come from renewable energy (from both new and existing renewable energy sources), though ERT will excuse this requirement if the proponent demonstrates a mitigated carbon source or Best Available Technology (BAT) power source, from which the overall carbon emissions of the EcoPowerSM mix are at least 50 percent lower than emissions from all other generators supplying the local market.

  ERT projects that the environmental impact of EcoPower® mixes will typically yield a 75 percent reduction below average system power emissions.
  
  An important part of the substantiation process is the verification that the generation of EcoPower® in the quantities purchased actually met ERT’s definitional requirements.  Since EcoPower® generators differ as to how they measure, verify and report on their generation, ERT is working with an international public accounting firm, supplemented as necessary with engineering expertise, to define and implement the necessary verification and reporting standards.
  
  The second part of substantiation process will estimate, for an annual period, the emissions savings resulting from EcoPower® purchases.  Analytically, this is a challenging task, because electricity grids receive power from a number of generators resulting in a blend of electricity.  Generation sources in any given grid are usually dispatched on the basis of cost, availability, and other factors.  Although it is not possible to precisely determine the specific generation that has been displaced by new EcoPower® generation, there are several approaches that can provide good estimates of emissions savings.  ERT has assessed the options in developing a method that provides a reasonable approximation at a moderate cost.
  
  

• What is a Power Scorecard Rating System? 
  
  One of the limitations of most current “green power” certification definitions is that they are framed in a “yes/no” manner.  This approach does not provide the opportunity to rank competing sources of electricity generation on a more detailed continuum of environmental impacts.
  
  In order to address this deficiency, a coalition of six environmental organizations issued a “Power Scorecard” methodology to rate the relative environmental impacts of different types of electricity products.  The six organizations include Environmental Defense, the Natural Resources Defense Council, the Izaak Walton League, the Northwest Environmental Coalition, the Pace University Energy Project, and the Union of Concerned Scientists. The Power Scorecard assigns a score to the impact a product has in each of the eight environmental areas most seriously affected by electricity production. The overall environmental impact rating combines scores in the following eight areas:

  Air Impacts

  1. global climate change
  2. acid rain
  3. smog (ozone) and fine particulate matter
  4. toxic mercury emissions

  Water Impacts

  5. consumption of water resources
  6. pollution of water bodies

  Land Impacts

  7. on-site land impacts (permanent plant footprint)
  8. off-site land impacts (solid waste disposal and fuel processing)

The Power Scorecard also grades electricity products according to the percentage of electricity obtained from new renewable resources.  In other words, it identifies newly built technology that uses renewable sources of power, such as wind or solar energy, to produce electricity.  By using new, low-impact, renewable resources, a power supplier displaces older, often higher-polluting facilities – one of the very best ways to reduce adverse environmental impacts.

ERT’s pilot municipal projects are intended to provide one of the first practical applications of the Power Scorecard methodology. Working with Environmental Defense, ERT will develop a custom-made Power Scorecard rating program for two major municipal markets – Chicago and Detroit.

• How does ERT market and 'broker' clean power? 
  
  ERT’s Program Directors have made many contacts on both the ‘buy side’ and ‘sell side’ of the energy market.  Because the market for clean power is only now emerging, there have been and still are hurdles to the two sides coming together and enacting clean power purchase agreements on their own.  ERT uses its expertise and position as a credible third-party to bring together consumers and suppliers of clean energy.
  
  
• What is an EcoPower® ticket?
  
  Once substantiated for environmental attributes, various sized blocks of EcoPower® are assigned a certificate/ticket.  Each EcoPower® ticket represents the generation of a specified amount of substantiated EcoPower® in the electric grid of origination for the power resource.  Each EcoPower® ticket discloses the amount and types of fuel components generated for a specified period.  Upon sale to an end user of electricity, each EcoPower® ticket is punched to ensure credit for final use, and a copy of the punched ticket is maintained for audit purposes.
  
  EcoPower® tickets serve as a record of the claim of energy generation placed into the grid for sale as EcoPower®.  The amount of energy that makes up a block of EcoPower® is disclosed in the NEB memorandum.  Thus, a limited amount of tickets are available for sale in a given year.  Any request for additional EcoPower® tickets triggers the requirement for a new NEB substantiation. 
  
  A retailer may purchase tickets from generators of renewable energy in other electric grids if locally generated renewable energy is not available.  Though the actual electrons produced by the EcoPower® source may not flow across grids to the remote consumer, the consumer will be assured by the EcoPower® ticket that the clean power was generated and sold only once to that consumer.  Not only does this stimulate the market for clean power in the region where it was generated, the consumers’ demonstrated preference for clean power will encourage development of renewable sources in the consumers’ own region.
  
  
• Does the EcoPower® Program have any strategic alliances? 
  
  ERT’s EcoPowersm Program has a number of strategic alliances that include the following:
  
  
  • An alliance with Commonwealth Edison (ComEd) to market wholesale clean power throughout the Midwest under the EcoPower® label;
  • An alliance with Automated Power Exchange (APX) to offer EcoPower®-branded clean power on the APX’ wholesale clean power exchange;
  • An alliance with Old Mill Power to develop – substantiate clean power and assist in developing new renewable resources – the clean power market in Virginia;
  • An alliance with Bay Windpower to develop – substantiate clean power and assist in developing new wind renewable resources – the clean power market in Michigan;
  • An alliance with Sterling Planet to market EcoPower® Plus Renewable Certificates with emissions offsets.
    
    

• What other organizations try to stimulate the market for clean power? 
  
  There are no other organizations that act in exactly the same manner as ERT in both being a not-for-profit certifier and marketer of clean energy in the Midwest.  Two organizations similar to ERT are the Center for Resource Solutions (its Green-e certification program) and Bonneville Environmental Foundation (BEF) (its clean power certification and marketing program).  Center for Resource Solution’s Green-e certification program is a more ‘passive’ certification system than the EcoPower® Program – ERT works to develop a clean power product tailored to the organization’s needs in addition to its certification role while Green-E acts purely as a certifying ‘stamp’ for various clean power products – and it requires that clean power products contain a heavier renewable component than many municipalities and corporations can afford.
  
  BEF, on the other hand, is markedly similar to ERT as it markets clean power to municipal and corporate consumers, verifies and certifies the clean power’s environmental benefits, provides a ticketing mechanism similar to the EcoPower® ticketing program, and reinvests premiums from the sale of its clean energy into a reinvestment fund. While BEF is very active marketing clean power in the Pacific Northwest, though, ERT has focused its EcoPower® Program throughout the Midwest.
  
  It also is important to understand that ERT is not a supplier of clean power per se. ERT partners with suppliers such as ComEd to market clean power that ERT substantiated and certifies as the EcoPower® brand to large corporate customers and municipalities. There are numerous organizations that ‘supply’ clean power products.  They include Green Mountain Energy Company, Allegheny Energy and numerous other utilities.
  
  
• Why do consumers/suppliers of clean power work with ERT instead of working with other organizations that broker clean power?
  
  ERT believes that its competitive advantage lies in its market-building focus – its willingness to do what it takes, i.e., inform, broker, substantiate or certify, to catalyze the clean power market – and, more specifically, its commitment to developing a substantiation protocol for clean power.  ERT relies on its credibility as a non-profit NGO, and its mandate to employ economically sound solutions to environmental problems to ensure that it only brokers clean power deals that both are environmentally and financially sound.
  
     
• Has ERT been successful in attracting consumers and/or suppliers of clean power to participate in its EcoPower® Program?
  
  Yes.  ERT has been successful at attracting consumers and suppliers to participate in its EcoPower® Program.  These ‘success stories’ are detailed below.
  
  
  • The City of Chicago Clean Power Purchase
    The City of Chicago has made a long-term commitment to clean energy. In May 2001, the City of Chicago and Commonwealth Edison (ComEd), the local electric utility, signed an agreement that establishes ERT as the City’s renewable energy portfolio manager. Under the agreement, the City is calling for the immediate supply of at least three percent (and eventually twenty percent) of its total energy purchases to come from a diverse portfolio of clean energy sources.  The first amounts of clean energy are coming from 18 local municipal landfill sites where methane gas, normally just burned off, is used to power combustion turbines that provide electricity.  Not only does the process remove methane, a potent greenhouse gas, but it also generates electricity that displaces energy that would have been generated by a fossil fuel, reducing the emissions of another greenhouse gas, carbon dioxide.
    
    ERT’s net fees from EcoPower® sales to the City of Chicago will support future investments in renewable energy in the Chicago area.  Equally importantly, the City’s leadership has enabled a process of continued construction for new renewable power that could, within five years, top 400,000 MWH of annual energy production. The net proceeds of ERT’s clean power program are deposited into a reinvestment fund that will be used to develop additional clean and renewable power resources.  In conjunction with cleaner power sales and brokerage, the EcoPower® Program also will collaborate with utilities to reduce the impact of power generation on priority sites of biodiversity.  ERT’s reinvestment fund will be used to develop other clean and renewable energy resources, including the possible deployment of wind plants and solar electric generating roofs on Chicago area schools.
    
    
  • Zero Energy Solar Home – Old Mill Power
    Several municipalities and utilities are working with ERT to catalyze the market for clean power throughout the United States.  The latest example is Old Mill Power Company’s contract to purchase excess power generated from the negative-energy residence of Alden Hathaway, Director of ERT’s Clean Power Program, and solar homeowner.  The excess clean power generated by his home will help create a clean power supply in Virginia.  Hathaway has taken a leadership role in demonstrating that negative energy solar-powered homes can be cost-effectively built today.
    
    
  • Automated Power Exchange (APX)  
    In March 2000, ERT completed a deal with Commonwealth Edison in Illinois to sell the first block of renewable energy on the wholesale market in the Midwest.  Per the agreement, ComEd will market EcoPower® to municipalities, retail electric suppliers and other utilities.  This agreement calls for ComEd to market EcoPower® formed from landfill gas.  John W. Rowe, Unicom and ComEd Chairman and CEO said, “offering renewable energy will allow our wholesale customers to have more choice in their decisions about the power they purchase.”  ComEd will offer EcoPower® on Automated Power Exchange’s (APX) Midwest Green Power Market, which opened in March 2000.
    
    
• What is the current focus of the EcoPower Program®?
  
  ERT’s EcoPower® Program has two pilot projects underway with municipalities with which ERT has been building working relationships.  The first project is under initial development with the Local Government Electric Power Alliance of Northern Illinois, which includes 80 members, including the City of Chicago (see the City of Chicago Clean Power Purchase).  The second pilot power project will be implemented for the Michigan Public Power Agency (related to ERT’s strategic alliance with Bay Windpower), which includes eight municipalities in Michigan which generate their own power.  These pilot projects target municipal consumers because they have proven to be some of the earliest, largest and most committed buyers of  “clean energy” in other Regions of the country.  Successful implementation of these projects will provide a strong foundation for expanded clean energy use, not just in the municipal sector but also in investor-owned utilities and the commercial and industrial sectors.  The Joyce Foundation (need to add link) and the Great Lakes Protection Fund have provided philanthropic contributions to fund these two pilot projects.
  
     
• What are the EcoPower® Program's messages? 
  
  
  1. ERT educates consumers about their clean power options.
     • ERT markets clean power to municipalities and corporations - ERT has contacted over 30 municipalities. 
     • Once committed to purchasing clean power, these consumers count on ERT to help them manage their clean energy portfolios, in both sourcing clean power suppliers and substantiating and certifying validity of the clean power claims.
     • ERT has assisted the City of Chicago in both these capacities.
       
       
  2. ERT defines and certifies an electricity product with specified environmental benefits. 
     • ERT has a set of criteria it applies to clean power products to determine whether the product is EcoPower®. 
     • Working with a technical consulting firm, ERT determines the Net Environmental Benefits of a given block of power, and documents them in an NEB Memo.
     • ERT has certified more than 300,000 MWHs of EcoPower®.
       
       
  3. By actively working with municipal and large corporate customers, ERT stimulates demand for clean power, thereby helping to bring online new supplies of renewable energy and to catalyze the clean power market.
     • The City of Chicago clean power purchase will help bring online new renewable sources in the next five years by demonstrating and publicizing its demand for the electricity. 
     • ERT's reinvestment fund - expected to reach $3 million within five years and funded with the premiums used to purchase EcoPower® - will be appropriated to the development of new renewable technologies.  
       
       

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