What is the Cost to Reduce Portland's CO2 to Zero?

As this paper explains, RECs - bundled with the electricity or unbundled from it - transfers ownership of the attributes (not electricity if unbundled) of the renewable to the REC purchaser.  Earlier in the same paper, the authors note that the Superior Court of New Jersey has ruled, "One Renewable Energy Certificate represents the environmental benefits or attributes of one megawatt-hour of generated renewable energy."[Emphasis added]
One cheap way to achieve that goal is for Portland to buy RECs.  

Let's figure out how many REC's Portland needs to purchase to reduce its carbon footprint 100%.  Keep in mind that all the vehicles, industrial processes, commercial processes, how electricity is generated, and other uses for fossil fuels from lawn mowers, Vespas, gas grills, and on and on would still be in use.  

We need four pieces of information: (1) where the renable project assocaited with one REC is located, (2) Portland's current carbon footprint, (3) price of one REC, and (4) the shelf life of one REC.

1. Where is the renewable project located?
  • The BEF has REC's for sale from projects located around the country. 
  • For illustration only, using one from from Kansas, the amount of CO2 emission avoided per MWh is determined by system operations where Kansas is located, and that is the Southwest Power Pool (SPP).  In this example, one MWh of REC is equivalent to 1,616.38 pounds of CO2 avoided.

2. How Many REC's Must be Purchased from Renewable Projects?
  • Number of REC's = Portland's Carbon Footprint Before REC Purchase/1616.38 (if RECs are purcahsed from within the Western Electricity Coordinating Council (WECC), one MWh REC is equivalent to 903.92 pounds of CO2 avoided.
  • For illustration,  if Portland is responsible for 20MMT of CO2, to reduce that to zero would require 12,207 REC's (or ~ 22,000 RECs if only purchased from renderable projects within WECC)
  • NOTE: The Portland region had a CO2 footprint of ~ 32MMT as of 2010. 

3. What is the Total Cost of the REC's?
  • BEF as of this writing shows a price of $8/REC.  Then, $8*12,207RECS = ~ $98,000.
  • If RECs are purchased from projects within WECC, then the amount of REC's needed jumps to about 22,000 and the cost rises to ~ $177,000.

4. What is the Shelf Life of These REC's?
  • If the shelf life of each of these REC's is one year (two years), then it would cost Portland $98,000 ($177,000) for one   year (two years) of coverage.







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