The concept of investing in Renewable Energy Certificates (RECs) is well established in the US. This idea is not as familiar with the UK market. The company, Green Energy Commodities is now seeking to make this investment opportunity more widely available to potential investors in the United Kingdom. It has long been recognised by Green Energy Commodities and its Senior Director, James Hoile that green investments are a growing market – particularly as the effects of global warming become more apparent. Green Energy Commodities offers a selection of environmental investment products and services to meet this ever-growing demand.
As Green Energy Commodities is well aware, a major spur to green investment products came as a consequence of the Kyoto Agreement in 1997. This was the first time that national governments made real headway in putting arrangements in place to attempt to control and reduce carbon emissions. Under the terms of the US Constitution, the US Federal Government was not in a position to formally ratify the Treaty. This was because by doing so, the rights of individual states would potentially be undermined. Nevertheless, the majority of individual US states went on to introduce legislation to curb carbon emissions. As Green Energy Commodities explains, restrictions were placed on carbon emissions from the heaviest polluting industries. Furthermore, energy producers such as large utilities companies were required to ensure that a certain percentage of the power they generated came from renewable sources. This set the background for the niche in which Green Energy Commodities now trades.
So far as the Green Energy Commodities business model is concerned, two important concepts grew in importance as a consequence of the Kyoto Agreement. The first is the idea of ‘carbon credits’. Polluting industries are given carbon emissions quotas. In those situations where a particular organisation has not used up its entire quota, it is possible to openly trade any ‘excess’. Companies such as Green Energy Commodities quickly appreciated the investment potential in this. Furthermore, a way had to be devised in order to calculate exactly how much energy was being produced from renewable sources. This gave rise to the concept of the Renewable Energy Certificate (REC). A single REC (of the type in which Green Energy Commodities trades) shows that 1 megawatt hour of electricity has originated from a renewable source. The fact that these certificates are transferrable and tradable opens the door for forward thinking and environmentally aware investment companies such as Green Energy Commodities.