That this first deal was between the EPA and a non-profit was the best way for RECs to leave the starting gate, says Harmon. "I think if any for-profit player had tried to do it, particularly in the days of Enron, it would have been much more difficult to get any traction for the concept."
The REC market was originally hampered by consumer doubts and misconceptions that included rumours of double counted RECs as imaginary attachments bringing ill-gotten dollars to existing wind farms undeserving of more money. "Before there was a tracking system where every REC got a serial number, all of this stuff was done with metre readings and paperwork that people signed under threat of perjury," Harmon says. "So a tracking system was set up where every megawatt hour generated at a renewable energy facility is given a unique serial number and it's put into a bank, just like a dollar bill."
Eight web-based regional tracking systems now exist in North America to validate both RECS sold to customers who are voluntarily buying green power and RECs used to prove compliance with state laws mandating minimum levels of renewable energy production. The tracking agencies serve most areas that harbour significant wind development and more are on the way. One of the largest, The Western Region Electricity Generation Information System (WREGIS), is based in Salt Lake City, Utah, and covers all or part of 14 states and two Canadian provinces. It began operating last summer.
"All we do right now is verify renewable generation," says WREGIS' Connie White. "Our web site gives information about who's participating, but volume is considered confidential information because people who really understand this market could look at it and guess who's trading what and what their capacity factor is."
Generators open an account and their REC trades are reported much like a monthly bank statement. Efforts are under way to co-ordinate all eight agencies, which would allow easier integration between the systems to help states import and export across state and grid borders. "We're looking to see if we have compatible standards and if we can have interfaces between the systems," White says. "We want to help the marketplace get bigger and more vigorous."
Smaller purchases in the voluntary market, however, may not be substantial enough to warrant tracking through a WREGIS account. And that's where a non-profit like Green-e, a San Francisco-based company that audits consumer transactions, comes in. Green-e's certified REC sales reached nearly 8.8 million MWh in 2006. "Green-e ensures that we're selling only as much as we're buying and that all the stuff we're buying meets their standards," says Harmon. "Of course, that's much easier to do if it's all going through WREGIS to begin with. Because then you know exactly where that REC was created and you know exactly whose hands it passed through."
Projects that are too small, or wind project developers that do not understand the REC process, might decide not to bother joining a tracking system. "But I don't think you're really going to see much of that," Harmon says. "I think the wind energy industry is very evolved and very sophisticated. It's absolutely in the wind energy industry's best interests -- and they know this -- to participate in the system because it adds a tremendous amount of credibility to the whole thing."