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ARECs: Additionality Without the Complexity

Updated: Jul 23




The most common methods to mitigate scope 2 emissions require various trade-offs. Purchasing unbundled RECs is straightforward and cost-effective but has little to no real impact on decarbonizing the grid. PPAs and VPPAs support new clean energy generation, but they are bilateral, complex, and inherently risky. To solve this problem Zettawatts developed Additionality RECs. ARECs enable corporate buyers to meet their clean energy goals while directly supporting the development of new renewable energy projects while avoiding the risks and complexity associated with VPPAs.


What are Additionality RECs?


Additionality RECs are fixed-price forward contracts to purchase the first 5 or 10 years of RECs from future renewable generation projects. Unlike VPPAs, ARECs are not bilateral. Zettawatts aggregates projects to source ARECs from and contracts directly with project developers; therefore, if a given project fails to achieve commercial operation, the RECs from that project are replaced by those from another project that meets the same conditions. This minimizes the AREC buyer’s exposure to project-level risk.


The “A” in AREC


ARECs are additional, meaning that they materially contribute to decarbonizing the grid. ARECs meet three common GHG Protocol tests for additionality:


  • Legal, Regulatory, or Institutional - Because ARECs come from pre-COD, they are by definition beyond the level currently required by regulations or current industry standards.


  • Investment - Purchasing ARECs directly supports the development of new renewable generation projects. AREC buyers receive affidavits from project developers stating that the buyer’s commitment to purchase ARECs is used to secure funding for the projects.


  • Timing - ARECs source RECs only from pre-COD projects.


How It Works


The AREC Market is the hub for creating a scope 2 mitigation plan and submitting AREC purchase offers. Buyers can specify their offer price and desired generation project attributes, such as location and generation type.


Purchasing ARECs is straightforward: 


  1. Create a free AREC Market account: ARECs are purchased via the AREC Market, which includes a free planning tool to map out your scope 2 mitigation plan.

  2. Enter your energy consumption: The AREC Market planning tool will automatically create a scope 2 mitigation plan based on your energy consumption. By default, your new plan assumes that you’ll mitigate 50% of your scope 2 emissions using ARECs, and the other 50% by purchasing unbundled spot RECs.

  3. Customize your plan: In the planning tool, you can add strips for unbundled spot RECs, VPPAs, PPAs, and ARECs to reflect your current or planned scope 2 mitigation strategy.

  4. Add AREC strips: AREC strips have options for start vintage, generation type, location, and REC type, and can be purchased on 5- or 10-year strips.

  5. Draft, review, and submit your offer: Purchase offers are submitted to the market and filled by available projects submitted by developers that match the attributes specified in your AREC strip.


If you have questions or feedback please schedule some time with us or send us an email.




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