Clearway Energy And Power Ledger To Develop A Platform To Trade Renewable Energy Certificates (RECs)


One of the biggest clean energy developers and operators in the US, Clearway Energy has partnered with Power Ledger to develop a platform that will enable the trading of Renewable Energy Certificates within the United States.

According to Bloomberg, Clearway Energy is set to release an automated marketplace that will deal with renewable energy credits in efforts to encourage consumers to use renewable energy.

In the partnership, Power Ledger will create a blockchain based energy trading platform which will track and trade Renewable Energy Credits (RECs).

RECs are tradable commodities that represent proof that one megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource.

Enhancing Trading of Energy Commodities

Power Ledger executive chairman and co-founder, Dr. Jemma Green said that the company will use its expertise in the enhance trading of energy commodities in the digital space. He said:

“Power Ledger is applying our proprietary technology to the evolving market for trading digital energy commodities. This is a market that’s often criticized for being opaque, but blockchain technology will make it more efficient, secure, and provide greater transparency.”

Green said that his company will be able to track RECs using a blockchain ledger system which will start from the point of creation, sale as well as transfer to the buyer. The tracking will also continue to the retirement point of the certificate and the annual sustainability audit.

The inaugural piloting phase will involve a project based in Massachusetts which produces about 1 to 5 megawatts and another project in the Midwest where about 20 megawatts are generated.

Power Ledger’s partnership with Clearway will ensure swift entry into the environmental commodity trading market in the U.S. due to Clearway’s established footprint of renewable energy assets across the country.

Monique Menconi, Clearway Energy Group vice president of asset management, said that the use of blockchain technology in the REC market will significantly improve efficiency. She said:

“We believe blockchain trading technology can significantly improve the efficiency of the market for RECs in the U.S. by linking transactional functions within a common platform.”

Menconi said that Clearway was optimistic of the deal that will help in offering fully integrated, scalable as well as low-cost solution in the REC market.

The market for RECs in the United States covers both compliance and voluntary markets and is estimated to be worth over $3 billion annually and transaction costs can add another 3-10% of the total.

Although there are various digital alternatives for tracking RECs from generation to retirement, the presence of brokers within the system leads to high costs and make it hard to trade. However, the new trading platform will be cheaper than the alternatives already in the market.

Clearway plans to roll out the test for various months before expanding the platform to all parts of the country in early 2020.

Will the new platform help improve efficiency in the RECs market? Keep the conversation going in our comments section.

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