All You Need to Know About I-RECs (International Renewable Energy Certificates) & How They Can Benefit Your Business

March 2024

The world is shifting towards a greener future, and businesses are playing a crucial role in this transition. But achieving sustainability goals can be complex, especially when operating across different regions. This is where the voluntary carbon mechanism involving International Renewable Energy Certificates (I-RECs) come into play – offering a credible and global solution to help companies support renewable energy and reduce their environmental impact.

The global voluntary carbon offsets market size is growing exponentially as more corporates are pledging stringent net zero goals. These credits have also become a mainstream tool for driving finance to climate action activities that reduce GHG emissions.

What are I-RECs?

Imagine a certificate that represents 1 megawatt hour (MWh) of electricity generated from clean sources like wind, solar, or geothermal – that's exactly what an I-REC is and can be used to neutralise scope 2 GHG emissions. By purchasing these certificates, companies can demonstrate their commitment to renewable energy consumption, regardless of their physical location. The advantage of I-RECs lie in their transparency and measurability. Moreover, it allows businesses to contribute to Climate Action on a global scale, irrespective of whether you have a manufacturing plant in China or an office building in India.

How do I-RECs work?

The process of registering and procuring I-RECs is fairly streamlined across the world. Renewable Energy developers register their plants with the I-REC system, providing relevant documentation. The application then undergoes rigorous verification to ensure the legitimacy of the clean energy source.

Once approved, the generator receives I-RECs corresponding to the units of clean electricity produced from their renewable asset.

After the validation, an independent audit may also be initiated by the Registry based on their discretion. Once the registration is approved by the Registry, the generator can furnish the meter readings from time to time to get I-RECs issued on the electricity generation from the RE asset.

Companies and organizations can then purchase these I-RECs, effectively claiming the green energy credits, that is the environmental benefits associated with the generated renewable energy. It is ideal for companies that are looking to compensate for their emissions, but do not want to enter into long-term power contracts with RE developers.

I-RECs: Powering Up the Future of Clean Energy

The I-REC market is booming, fuelled by a global surge in demand for clean energy. 2023 saw a remarkable 42% increase in issued certificates, reaching a staggering 283 million, representing 283 terawatt-hours (TWh) of electricity. This growth is further amplified by an impressive 81% rise in redemptions, reaching 176 million certificates (176 TWh).

While the number of redemptions is lower due to the inherent "trading phase" of I-RECs, it doesn't dampen the positive trend of increasing demand and market growth.

Looking ahead, 2024 promises continued momentum. Active trading is expected to pick up in the second quarter as certificates from newly generated renewable energy accumulate. This signifies a bright future for this crucial market in the global clean energy landscape.

Beyond market growth, I-RECs offer several advantages:

Transparency and trust: Countries like Brazil, China, and India use I-REC standards to verify and certify the clean attributes of their renewable energy, ensuring transparency in the market.

Reaching sustainability goals: Companies aiming for complete reliance on renewable energy can utilize I-RECs as an alternative solution to claim the environmental benefits even if direct access is limited. This win-win situation allows companies to meet their sustainability goals while supporting the global expansion of renewable energy.

With its remarkable growth and the advantages, it offers, the I-REC market is poised to play a significant role in powering a cleaner future.

lobal Corporates that procured I-RECs between 2022 and 2024

Why should Businesses purchase I-RECs?

Any company from any industry can acquire I-RECs to offset its energy consumption; Purchasing I-RECs allows a business to make a claim for using Renewables, merely based on its energy consumption as it does not involve a Corporate Entity getting into a long-term energy contract. It is an ideal solution for companies looking to further their Sustainability goals, targeting RE-100 (100% procurement of Renewable Energy) or Net Zero in coming years. Some additional benefits include

• To comply with corporate environmental standards, such as the Greenhouse Gas Protocol.
• To achieve ESG goals, as I-RECs give a competitive edge to a business’ portfolio from an investors perspective.
• Businesses aiming to reduce theirs and their supplier’s carbon footprint through the supply chain itself can opt for I-RECs conveniently.
• Support renewables production growth: Trading activity indirectly signals demand for low-carbon electricity, supports renewables production growth, and attracts investments.

FPEL IS NOW ISSUING I-RECS FROM OUR FY23 COMMISSIONED PARKS

FPEL is revolutionizing the renewable energy landscape with integrated clean energy solutions aimed at reducing businesses' carbon footprint and achieving sustainability goals. FPEL offers a comprehensive suite of services, including solar, wind, hybrid, battery storage, and EV charging infrastructure.

Notably, the company issues I-RECs, facilitating its customers' journey towards RE-100 certification. These I-RECs have garnered widespread recognition, being purchased by leading corporations spanning IT, pharmaceuticals, cement, and manufacturing sectors.

WHY CHOOSE FPEL FOR PURCHASING YOUR COMPANY’s I-RECs?

• Leading the market as India's top C&I On-site & Open Access player, FPEL boasts a vast portfolio of RE100 Qualified projects.
• Enjoy transparency and full visibility into the projects where credits are issued, unlike other aggregators that source from various projects.
• Competitive pricing.
• Tailored solutions available, including short-term and long-term contracts, to meet your specific needs.
• FPEL upholds robust ESG practices, conducting thorough E&S screening, ESIA studies, and community engagement for all Open Access projects, ensuring zero social impact on I-RECs issued.
• FPEL's projects contribute to both direct and indirect Sustainable Development Goals (SDGs) impact/li>

To know more about purchasing I-RECs from FPEL, write to marketing@fourthpartner.co