Renewable Choice's Wind Energy Cards have blown up a storm of controversy on the web over the last week. We feel offsets are an important concept, and this is an important debate -- one we need to address -- but we also have numerous entanglements with this issue. Mark Frauenfelder is a friend. Renewable Choice offset the energy used to make our book. Ted Rose is a guest contributor for this site. We are tied to every side of this controversy.
Ultimately, we decided that the best thing we could do was to try to explain the controversy, represent the reasons why we think offsetting is both an important existing tool and a model still in need of fine-tuning, and let you make up your own mind. Here, Jon attempts to do that.
We welcome discussion on this topic. -- Alex Steffen
One of our readers was concerned about Renewable Choice Energy's Wind Power cards, which are sold in Whole Foods Market and have proved to be controversial, at least in some parts of the blogosphere. Mark Frauenfelder at bOING bOING posted that the cards are "useless.... When you buy a card, you don't get any wind-generated electricity delivered to your home however. In fact, all you get is a card that doubles as a refrigerator magnet. Actually, you don't even get any credits, it's just a word they use to give you a sense of getting something from your money." However I think Mark misunderstands the concept of offsetting, which is what the cards are about.
If we take climate change seriously (and we should), we need to start to figure out how to reduce our overall energy use, get as much of the energy we use as possible through renewables, and remedy the remainder of our energy use in other ways.
We should all buy green energy. But sometimes, even if a utility has sources of green power, that source may be limited. Consider my local utility, Austin Energy. Even though their Green Choice program is considered one of the best green power programs in the USA, it can only handle a limited number of subscribers.
So what do you do if you can't connect directly to a provider of green power? One thing you can do is pay someone else to use renewable energy.
Let me explain. A few years ago I worked on a project for Conservation Services Group that required that I develop an understanding of Renewable Energy Credits (RECs). Bonneville Environmental Foundation explains how RECs work: "In a REC deal, the power from the new renewable energy facility is not physically delivered to the customer, but the environmental benefits created by the facility are attributed to that customer, directly offsetting the environmental impact of the customer's conventional energy use.â€? By purchasing RECs, you can support alternative energy even if your local energy provider has no sources of green energy. As more people offset their conventional energy use through these credits, more alternative energy sources will be developed to service them, and more dirty power will be replaced with renewables. The Renewable Choice cards are just a way of buying those credits.
As we've noted before, offsetting is both powerful and controversial, and the controversy is probably attributable both to the fact that offsetting is abstract and to the fact that there are no universally agreed-upon standards for creating offsets.
In the case of the Renewable Choice Wind Energy Cards, because they're not directly linked to the delivery of energy to the home, it's not intuitive how your purchase of the card relates to your ecological footprint.
Also, as Frauenfelder and others have complained, it's not clear where the money's going. That was a predictable confusion, and it's handled by certification with Green-e, which defines how energy credits work (referring to them as Tradable Renewable Certificates) (TRCs):
TRCs are created when renewable energy is substituted for traditional power. TRCs represent the environmental benefits of renewable energy generation in the form of a marketable commodity. Renewable energy is sometimes more expensive than buying traditional power so TRCs are purchased in addition to the electricity that most consumers now use. Purchases of TRCs allow renewable plants to be built where cost is lowest, while their positive attributes are delivered to customers anywhere. Buying TRCs allow consumers to create similar environmental benefits to buying green power: reduced dependence on burning fossil fuels to produce electricity and reduced emissions of greenhouse gases and other harmful air pollution.
In other words, if you don't live where wind energy is produced, you can still support wind energy by buying credits (whether they're bought online or in the form of supermarket cards). When you buy energy credits, you're offsetting your use of traditional energy sources by contributing to systems that deliver more alternative energy to the grid. Green-e certifies that you get what you paid for.
Beyond certification, do we really know that a $15 card offsets a month's worth of power for a family, as Renewable Choice says? Ted Rose of Renewable Choice, a former journalist and guest contributor to WorldChanging, has just written an explanation published at Grist. His overview of the company's operation doesn't really say specifically how many credits a card represents. In an interview, Rose told me that the reality behind the cards is complex and dynamic, therefore hard to represent with a single, stable set of figures.
In its faq response to the question "How do I know I will get what I paid for?" the company notes the Green-e certification, which is based on an analysis of the complex factors considered in determining the price and the product.
Rose and I discussed how the card has drawn criticism, whereas the company's other methods for selling credits are well accepted. Perhaps the other products appeal to buyers who are already informed about RECs, and perhaps the value behind the card is not clear enough. It's unfortunate that there's been a negative response to a potentially innovative clean energy program.
Perhaps past the initial confusion, the Wind Card program will help us towards real debate and even better thinking about the role of offsets and RECs in fighting climate change, and that will translate into both more understanding of and support for alternative energy development.
I'm just as frustrated with our slow progress to convert to sustainability as everyone else on this site. I understand we're trying new things to speed the process--this really is evolution of memes by natural selection. So of course some will work, and others won't.
These cards are an idea that won't--at least not in this incarnation. The math is too fuzzy, and the general concept is too hard to explain (apparently). Simple = successful.
There is a lot of money to be made here--we all want cheaper energy and to grab it from an endless supply. We also want less dependence on foreign entities for such vital systems as electricity. So naturally there are a lot of people getting together and building better systems, whether they interface with current ones or are striving to replace them.
The fact of the matter is that we have the tools and resources available now to kick the market into high gear by providing incentive. The best incentive, obviously, is money.
If we use a fail-safe method of funding those new companies to develop cheap, EFFECTIVE equipment (solar cells, wind turbines, hydro generators) that we can all use immediately (that means they should be easy to setup and maintain, folks) whether off the grid or on... we will effectively boost ourselves into the future you've been talking about.
1) Failsafe funding: An online tool that allows people to form groups that have a target fund to reach. Each person declares an amount they'll give if the target is reached. If it is, the money is sent off and put to use. If not, everyone gets their money back. (This already exists, but for the life of me I can't find the link. Anyone know it?)
2) Figure out which companies get the funds.
3) Make it easy to donate to the fund (the net, obviously, but can we tap the environmentally-conscious pedestrian as Renewable Choice Energy has?).
4) Once the target it reached, award it to the chosen company and keep a close eye on them to ensure they're using the money as agreed (make transparency a clause in the written agreement)
5) Repeat until we're drowning in power generators fueled by renewables.
This is evolution. Try, fail, adapt until success. Let's keep the ideas coming, but don't completely discard one idea or embrace another exclusively. The solution(s) will be a diverse mixture of solid, understandable ideas. Let's keep moving, eh?
I really do not understand this scheme. Right, so you pay them to buy wind energy, and they receive certs for having bought it. But what do they do with the power? Resell it presumably (at a profit?). So, essentially, you have just bought pollution permits at one remove whilst financing their profitable power-trading operation. Presumably the wind operator wouldn't have feathered the turbines otherwise, as the operating cost is near-zero...so where's the beef?
This is at the very least highly anti-worldchanging; the customer is being asked to lend money at a negative interest rate out of the goodness of their heart, there doesn't appear to be any additional renewable production, and there is no verification that having bought the certs, you actually only consume as much fossil-generated electricity as you have offset.
There's a lot to say about this, but I feel most qualified to make a simple non-specialist's observation. Am I the only one who thinks this scheme sounds like the idea of eating a low-fat burger as well as a big greasy one, as a way of losing weight?
The REC debate seems to come and go. IMO Gyrus succinctly captures the negative reaction position
"Am I the only one who thinks this scheme sounds like the idea of eating a low-fat burger as well as a big greasy one, as a way of losing weight?"
But this reaction misses the point entirely for two reasons
1. Something not metioned yet is that RECs are not double counted. Green-E provides 3rd party certification that providers can only sell the green portion of the energy once, so when you buy RECs someone else cannot. Assumedly as demand for RECs grows providers will be signaled that they can bring more to market. Further the low-fat and highfat weight loss plan is exactly what alternative energy sources are doing. The mix of fuel sources in our country has a fosilfuel ratio (fossil outputs/fossil inputs) of ~.3, meaning we spend 3 units of fossil fuels for 1 unit of usable energy. Renewable options have ratios of greater than 1 (with wind being ~10). So if you blend a greasy burger (coal power) with a low-fat burger (wind power) you get an overall improvement. The analogy is more like a person who eats a greasy burger every day and then starts to eat a low-fat burger every other day. Is it the best diet? NO. Is it better than not eating any low-fat burgers? YES.
2. Current customers for RECs are not trying to get something for nothing. I don't understand why there is such a cynical reaction RECs, the implicit critique is people are buying themselves out of change. My guess is that most REC customers are also working to reduce their footprint in concrete ways and then using RECs to further reduce. RECs are currently so foreign that I seriously doubt people who don't care about the environment buy them. I think the folks at Renewable Choice, TerraPass, Native Energy and others could speak better to the demographics of REC purchasers.
Awhile back there was a dicussion about RECS on GristMill that Tom Stoddard of NativeEnergy weighed in on, and for me clarified much of the REC debate. If you're interested in understanding RECs better check out that discussion as well.
Good overview, Jon. I want to clarify one point. You write that I never specify how many credits individuals get. That information is right on the card: $15 buys 750 kWhs of credits, $5 buys 250 kWhs.
Kif Scheuer's comments are very helpful to this discussion, and I really like Gyrus' "burger" metaphor. We need to think about our power purchases at the margin - that is, how can we direct our next, incremental, spending for power?
We have an installed infrastructure of mainly "dirty" power. That infrastructure will not disappear overnight, and therefore will contribute electrons to the grid for the next several decades. What we hope to influence is power production at the margin - that is, how we obtain our next increment of electricity.
That's not quite right, because we really want the next incremental service performed by electricity. Presently, the best way to obtain the next increment of service is usually by increasing efficiency.
That has limits - we do need power sources - and paradoxically, efficiency gains can delay investments in renewable energy sources, because through efficiency, we can obtain more service from our existing (dirty) energy infrastructure. It's relatively cheap to run most existing power plants (especially base load plants), and many of them have been economically amortized and depreciated. Many of them provide high returns on investment compared to new power plants, especially solar and (often) wind installations.
But that's where "offsets" could come in. Offsets aren't too useful as merely purchasing a different "brand" of electrons. Offsets are very useful when they're our vote, as thoughtful consumers, to direct the next margin of investment into renewable sources - as a replacement for an existing power plant.
Until we pursue efficiency with the vigor it deserves, offsets merely ask for "low-fat burgers" as another item on the menu. The number of "greasy burgers" stays the same, but we also have a "low-fat" option - as a way of selling more "burgers". With determined efficiency efforts, we can deeply reduce the number of "greasy burgers" consumed - and by purchasing offsets, we can gradually replace "greasy" with "low-fat". Efficiency is what makes it possible for "low-fat" to succeed in any meaningful way.
Without serious efficiency, "low-fat" is just a boutique item, a niche market. With efficiency and offset purchases, we can actually change the infrastructure and get something meaningful done.
Ted Rose: 750 kWhs of credits is extremely abstract.
There was a lot of marketing in Canada to convince people to reduce their footprint by one tonne of CO2. Can you sell me a card that allows you to reduce emissions by one tonne? I would be convinced to buy that, if I knew that it was actually moving things in the right direction.
I'm not sure that idea would appeal to others; either way it's extremely clear there's some work to do on marketing for this issue/product.
Does anyone know of a project, or has one been proposed, where there is an exchange of energy rates? i.e. I want to use renewable energy, but it's not available. So I check a box on my Power Company bill that says I want to exchange with someone of about equal power usage who does have the option for renewable power and does not.
I for one do not wish to see the entire southwest covered with wind mills to support electricity demands.
Nuclear power has always been the answer. If a country as stupid as France could do it safely than we can too.
This whole discussion fails to distinguish RECs from offsets. In fact, they're not identical, though there's some overlap (bc you could buy RECs as offsets). It's really unfortunate that REC providers all use the language of "environmental benefits of the energy" to explain the concept -- it's such a terrible explanation.
The key to understanding RECs is that the electric grid is a collective instrument to begin with -- you don't buy electrons "directly" from a specific power plant, you just get your power from the grid, which is a mix of sources. When you buy a REC, you are literally causing more clean power to flow into the grid, even though there's no way for those electrons to be targeted to your home.
That is completely different from taking a 3,000 mile plane trip, and then buying carbon offsets. To see the difference, imagine if everyone in this country bought RECs for their electric power. In that case, all electricity would be produced from clean energy (yes, I know we couldn't literally do this ... yet.) OTOH, imagine if every air trip was carbon offset -- all those air flights would still produce exactly the same amount of CO2 as they did before.
Btw, the best explanation that I know of for RECs is found on our web site: 2People action: Buy clean energy.
The basic mindset that causes people to "not understand" how offsets work is the belief that "If I spend money on something there must be personal benefit in return (unless I'm giving money to a charity, and even then there's a payoff in the form of a tax credit). If I can't perceive the direct benefit, 'my' money has been lost."
What's missing in their world view is a sense that we ARE all connected to each other and to the planet, and that when someone else buys green energy, we all benefit. When I reduce my carbon footprint, I benefit because the planet benefits. There's been very little willingness to act for the greater good in our culture; that is beginning to shift as human consciousness shifts.
I would like a better accounting of where the money actually goes, tho'!
Right up front, I admit I know very little about how this all works, but the topic is fascinating.
Since the initial BoingBoing post about Renewable Choice Energy's cards, all of the discussions I've read center around explaining what a "REC" (or "TRC," or "offsetting," or what have you) is. But that isn't the real issue.
The real issue with these cards is, where's the money going? Which is exactly what Mark Frauenfelder asked in his second post on the subject. It's like some random charity you've never heard of before calling you up and asking you for money. Sure, giving money to them makes you feel good, and you have a reasonable expectation that your money will be used to do what the charity says it will, but how do you really know?
If Renewable Choice Energy wants to go out and get people to throw money at them, they need to do more than just say it's for a good cause. They need to be transparent by explaining exactly how and where the money's being spent, including such things as administrative overhead.
In other words, they need to do more than put a FAQ online. They need to open up their books.
PS to HGH, above: Nuclear power is not the answer. It creates the most toxic and most long-lived waste of any power source out there. Come up with a way to safely dispose of nuclear waste, then we'll talk.
A couple of things remain unclear to me as I follow this debate:
1) If I buy a REC does that translate into actual wind power going immediately into the grid somewhere even if it's not coming directly into my home?
2) If the answer to question 1 is yes, then my next question is - if more wind energy is going into the grid immediately, does that also mean that the equivalent amount of dirty fossil fuel energy is immediately being removed from the grid? In other words, if a $15 card is worth 750 kWh of wind energy and I buy it, does that trigger the power grid to somehow reduce purchases of dirty fossil fuel energy by 750 kWh?
If the answer to both questions is yes, and this is also what Green-e certification stands for, then it seems totally cool to me and I'd definitely purchase the RECs. It would seem like a good way for individuals to move toward a carbon neutral lifestyle.
I'd really appreciate responses to those two questions.
To me it seems strange that this entire controversy could have been avoided had Mark Frauenfelder spent a few minutes with Google first. Essentially, he committed a classic internet newbie mistake: he didn't read the FAQ.
I agree that offsets can be confusing to the consumer, but instead of creating unwarranted suspicion, his audience would have been better served had he devoted the same amount of energy to explaining how these programs work. Now environmental writers are stuck doing damage control instead of writing about issues that matter. Let's hope a mea culpa is in the works.
Maybe I still don't 'get' the concepts you're trying to explain about RECs. But if the burger analogy is still going, I'd say its like eating a greasy burger, but paying a premium on top of your normal burger cost. Basically absorbing the extra cost of a fat-free burger for someone in an area where they are available. Thereby making someone unknowingly consume more healthily while sending a message to the burger industry that we are willing to pay more for a better burger, encouraging them to expand their regional availability.
It seems more like a voluntary consumer subsidy than anything else, trying to keep green power providers incentivized.
Like many, I too wish the sustainability movement would be further along at this point in time. It is encouraging, however, to see citizens stepping up and taking action in the absence to true leadership in the area of sustainability.