Wind-power Credit's Effectiveness
by Laura Snider
For only $15, the busy Boulder shopper can pluck a wind-power card off the rack by the checkout counter at Whole Foods, good for 750 kilowatt-hours - the average amount of electricity sucked off the grid by an American family each month.
So, for about the cost of two tickets to a Friday-night flick, this environmentally savvy consumer has just become 100 percent wind-powered for the month, having the same effect as planting 13 trees or notdriving 1,286 miles.
At least that's what Boulder-based Renewable Choice Energy, which markets the cards, claims.
Sound too good to be true? A growing number of skeptics thinks so. Critics argue that renewable-energy credits - the commodity that the cards actually represent - are just a way for people to absolve their environmental guilt by throwing money at it instead of making any meaningful changes to their lifestyles. But supporters of the credits say the revenue they generate is essential to helping the fledgling renewable-energy industry get off the ground.
"A lot of people are dubious about RECs," said Kevin Doran, senior research fellow at the University of Colorado's Center for Energy and Environmental Security. "When you go through a grocery store line and you buy a card and it says, 'With this card you've helped us purchase wind power, and because you've done that, it's the equivalent of planting X amount of trees or the equivalent of not having done something' - that is a very suspicious statement."
The currency of wind power
Every time a kilowatt-hour of electricity is generated by a wind farm, a renewable-energy credit is also produced. The idea is that the credit represents the value of clean energy - the benefits of dumping less pollution and greenhouse gases into the air than traditional electricity sources.
So people who are using energy in their homes or businesses derived from burning fossil fuels can buy the same number of renewable-energy credits as the number of kilowatt-hours they use, thereby "offsetting" their environmental impacts.
Renewable-energy credits usually are not sold in convenient, credit-card-sized packages, and many more companies besides Renewable Choice sell the products. In Boulder, a customer can buy credits locally from Clean and Green or online from Native Energy and Community Energy - all of which are endorsed by the city of Boulder's Office of Environmental Affairs.
The companies all make similar claims. At Clean and Green, a customer can buy 600 kilowatt-hours of RECs to offset the electricity used in his or her medium-sized home in a month for $18 - wind-energy lapel pin, bracelet and bumper sticker included - which equates to planting 42 trees and eliminating 1,091 pounds of carbon dioxide, according to the company's Web site.
Many businesses that have offset the entire amount of energy they use advertise themselves as 100 percent wind-powered. Of course, it's likely the actual electricity turning on the lights in their buildings isn't from a wind farm.
One of the problems, according to critics, is that RECs smack of checkbook environmentalism - or the concept that anyone can be green without changing behaviors if they have enough money.
"Buying an REC is like buying an indulgence," Doran said. "It lets you buy your way into the social heaven of being green."
There's green to be made selling green
There is no question that some part of the money from buying renewable-energy credits helps support the wind farms producing them - the question is how much.
Renewable Choice Energy and Clean and Green both declined to report what portion of the credits they sell goes back to the wind farm. And as private, for-profit companies, they are not required to say.
RECs from those companies and others are certified by "Green-e," the country's largest, oldest and most stringent renewable-energy auditing service, which guarantees that money makes it back to the source.
"Our main objective is that consumers get what they're paying for," said Lars Kvale, an analyst for Green-e, which makes sure credits are not double-sold and that the suppliers can verify where the RECs originated.
Lori Bird, senior analyst at the National Renewable Energy Laboratory in Golden, says RECs may play an important role in getting the wind industry off the ground.
"In the big picture, this revenue can be important to project developers," she said. "It helps make projects go and more projects become financially viable."
And that's part of Renewable Choice Energy's objective.
"We're trying to support new growth, and renewable-energy credits are really important in the financial structure of wind farms," said Stephanie Hidalgo, residential services manager for Renewable Choice Energy.
But Bird also acknowledged that whether purchasing RECs really keeps wind farms financially afloat is a matter of debate within the industry. Some people argue that the RECs are little more than private subsidies for wind developers.
And the business of selling RECs can be profitable for the middle man.
Renewable Choice - which has powerhouse customers such as Vail Resorts, Whole Foods and Kettle Chips - would not reveal its profits, but the company founder, Quayle Hodak, told the Rocky Mountain News last summer that the company's profits had doubled between 2005 and 2006.
Clean and Green, on the other hand, says it operates in the red, but only because it has chosen to work only with wind farms owned by communities - which need to charge more for their RECs - instead of large corporate utilities.
"We have to pay a little bit more for a community-based REC," said Clean and Green founder Gerry Dameron. "Isn't that more valuable than a company that makes a slick deal to buy a million cheapy-cheap corporate RECs that they make a huge profit off of?"
Claiming to be "100 percent wind-powered," as do local companies including Illegal Pete's, La Sportiva and Spyder Active Sports - which all purchased RECs - helps companies promote themselves as green and may make their products more appealing to the increasingly environmentally conscious consumer.
But because renewable-energy credits are a relatively cheap and easy way to absolve a company's negative environmental impacts, even when other measures as simple as recycling or energy efficiency may not be used, customers are going to quickly become desensitized to wind-power claims, says Darrin C. Duber-Smith, president of Green Marketing Inc. in Nederland.
"We call it 'greenwashing,'" said Duber-Smith, who also teaches classes on sustainability at the Metropolitan State College of Denver and CU. "There's going to be a big backlash to greenwashing coming up real soon. If a company is buying wind credits and then they don't recycle - come on, consumers notice this."
Like in all kinds of false advertising, greenwashers make claims that their products can't support. In the case of renewable-energy credits, there are two claims concerning critics: that buying an REC actually adds power to the grid that wasn't there before; and that the credits directly eliminate carbon dioxide.
Renewable-energy credits are not created until the power is produced. So electricity from wind energy makes it onto the grid whether or not a renewable-energy credit is purchased right away.
"It's not like they could be over at the power plant saying, 'I wish these people would send in their cards so we can release this power,'" said CU's Doran.
Of course, over the long term, the sale of RECs will contribute to the viability of the wind farm, and the added revenue may allow the developers to expand the farm's capacity, adding more wind power to the grid down the road.
Because the electricity from wind is already on the grid and is being used by customers, not buying an REC does not mean that coal would have been burned instead. Therefore, the claim that buying a 750 kilowatt-hour wind card prevents the burning of 561 pounds of coal - as stated on the back of the wind card's packaging - isn't technically correct, at least in the short term.
Again, over a long enough period of time, if wind power does not prove to be a viable business, more coal-burning power plants might be built - instead of more windmills - to meet rising energy demands.
But the claims are not meant to be dishonest. Instead, they're meant to help companies articulate a complex and intangible concept to their customers, says Heather Phillipp, director of residential sales and services for Renewable Choice Energy.
"We're actually refining our language as we go," Phillipp said. "It's a really difficult balance to give people enough information to understand, without leaving out some crucial information. We are really committed to being as open and specific as possible."
Cleaning your neighbor's air
Other criticisms of renewable-energy credits include that they allow people to continue leading lavish lifestyles and skip the hard choices associated with reducing greenhouse-gas emissions, like trading in an SUV for a compact car, building a smaller house or traveling less.
"It becomes a yuppie feel-good thing," Duber-Smith said. "The whole idea of Al Gore (who buys offsets) having four homes and two jets - I have to smack him on the back of the head because he is not a sustainable dude."
Additionally, buying RECs doesn't directly improve the quality of the environment in the buyer's own backyard, unlike other efforts such as driving less, because the wind farms producing RECs are spread across the country.
"You get credit for doing something in somebody else's yard," said Lakshman Guruswamy, director of CU's Center for Energy and Environmental Security. "It's like saying, 'I've got to clean up my weeds in my own yard, but I like my weed-ridden garden, so I'm going to pull the weeds in my neighbor's yard."
Those types of concerns are part of the reason Boulder revised its Climate Action Plan, which originally included a large purchase of RECs in 2012 to close whatever gap is left between the city's actual greenhouse-gas emissions and its ambitious goal to meet the conditions of the Kyoto Protocol.
"The City Council decided to eliminate that REC purchase entirely and ask (environmental affairs) staff to be more aggressive," said Sarah Van Pelt, environmental sustainability coordinator for the city.
If adequate progress isn't made through voluntary measures in Boulder, the proposal for a large REC purchase could be back on the table.
'Part of the whole solution'
Despite the growing criticism about RECs, there are plenty of supporters who argue that doing something to support renewable energy - in whatever form - is better than doing nothing.
"It's one part of the whole solution," Van Pelt said, "particularly for people who have done everything they can to improve their efficiency."
Renewable Choice agrees that increased energy efficiency should be the first line of defense.
"We definitely encourage our customers to reduce their impact in a lot of different ways," said Phillipp, who edits a monthly newsletter for Renewable Choice's customers full of tips for reducing their impact. "(Buying RECs) is not the only thing - and it's not going to fix everything - but it's a really great start, and it's part of something bigger. Purchasing renewable-energy credits does make a difference."
Some critics also concede that products that bring discussions about wind energy into the public dialogue may be important despite their individual worth.
"Even though these things might be ornamental, they have - at the very least - kept some public attention on the issue," said Doran, of CU's Center for Energy and Environmental Security. "They have enabled criticism and because they were there, we may get to something better."
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