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 projects that are not yet operational.
How It Works
Under 1,000 MWh
Buyers can purchase strips of fewer than 1,000 MWh of ARECs for a 10-year term at a fixed price in a single transaction. These strips are paid for up-front, and RECs are procured and retired as-generated over the 10-year term. This offers smaller companies a way to purchase high quality clean energy and greatly simplifies the budgeting process.
Over 1,000 MWh
Buyers can purchase larger volumes of ARECs by submitting an offer at a volume, price, and term (5 or 10 years) of their choosing. RECs are retired as-generated, and the buyer is invoiced for the volume of retired RECs at the time of each retirement event.
The Zettawatts Planning Tool is the hub for creating a plan, modeling budgets, procuring ARECs to meet their company's clean energy needs.
If you have questions or feedback please schedule some time with us or send us an email.
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