Renewable Energy Glossary

Bundled procurement means delivering electricity and EACs through unified transactions, as opposed to separate or independent transfers of unbundled EACs. The mechanism often describes a scenario whereby a producer sells power and certificates simultaneously to the same buyer through unified commercial mechanisms, such as PPAs. However, "bundled" does not strictly require that EACs originate from the exact same generator as sold energy, nor that they must correlate with the generation period of the electricity delivered. Rather, it only matters that energy and EACs are part of the same contract.

Executed through registry interfaces or virtual accounts, cancellation (also known as retirement or redemption) is one of two ways an EACs lifecycle comes to an end, the other being expiration. Once cancelled, EACs are removed from circulation as they become ineligible for transfer or future use. This mechanism exists to prevent the double counting of renewable energy: multiple parties cannot claim attributes from identical certificates, because all registry protocols block duplicate retirements. Cancelling an EAC grants the user a cancellation certificate, which are essential to keep for complete audit trails and market-based Scope 2 disclosure.

Cancellation statements must be compiled into evidence packages to support claims: typically for emissions disclosures and for schemes that require proof of renewable consumption. They are accessible for download after EACs have been cancelled within a registry or Virtual Account. They contain beneficiary identification, and, similarly to EACs, relevant device metadata in full. To use the example of European GOs: statements reference unique certificate numbers, specific generation volumes, the domain of cancellation, facility names, the issuance date, production periods, technology classifications, and whether or not the device was in receipt of public support (whether investment support or production support).

Claims are the public assertion of a type of energy usage, and must be backed by legitimate cancellation statements from tracking system registries. Claims are both a discussion of legality and credibility: In the EU, supplier-to-customer renewable claims are legally connected to Guarantees of Origin that are provably cancelled in official registries to prevent double counting (also the case for REGOs redeemed in the UK). In the US, the FTC's Green Guides are explicit: claims about renewable energy usage are considered unqualified if energy derived from non-renewable sources is used but corresponding RECs are not procured to match the energy usage (or "virtually all" the energy usage in the case of manufacturing processes). Credibility of claims is a different discussion topic, relating not to the legal messaging rights of an EAC redeemer post-cancellation, but to the quality criteria and guidelines that organisations should attempt to follow when procuring EACs. The credible claims document published by RE100 is a well-established example of this theme.

Dual reporting under the GHG Protocol currently mandates two calculations and figures. Organisations calculate Scope 2 emissions twice using distinct methodologies: location-based figures that apply grid average factors from regional authorities, and market-based figures that incorporate the factors of residual mix data and contractual instruments, the latter of which only recognised as valid if meeting the quality criteria established by the GHG protocol or, where deviating, the criteria of a local disclosure regime.

Every megawatt-hour (MWh) of electricity has energy attributes. Consider these as the factual descriptors tied to a specific 1 megawatt-hour (MWh), and include generation technology, plant location, support status, facility start date, and the production period of the generation. The desirability of energy with renewable generation technology attributes is the easiest to understand, but all attributes serve a purpose, usually relating to supporting the credibility of a renewable claim.

Energy Attribute Certificate (EACs) act as the formal instrument recording those attributes per 1MWh.

The phrase "Energy Attribute Certificates" (EACs) is an umbrella term that refers to every type of tradeable certificate carrying energy attributes, with the majority of demand existing for the "renewable" attribute (meaning, tracking energy from a renewable source). Functionally, EACs underpin book and claim traceability mechanisms by serving as tradeable assets: EAC creation (known as issuance) "books" the finite number of attributes that correspond with verified renewable energy production, whilst "claims" (via EAC cancellation) represent end-of-life for an EAC, as the attribute is used permanently. The existence of market demand for EACs classes them as environmental commodities.

EAC types primarily include Energy Attribute Certificates (EACs), Guarantees of Origin (GOs), Renewable Energy Guarantees of Origin (REGOs), International Renewable Energy Certificates (I-RECs), and Renewable Energy Certificates (RECs).

An environmental commodity is an umbrella term referring to any tradable instrument with market demand that carries a standardised environmental purpose within a regulatory or voluntary framework. Environmental commodities include carbon credits, emissions allowances, and Energy Attribute Certificates (EACs).

EACs are the electricity-specific subclass: one certificate represents the attributes of 1 megawatt-hour (MWh) of generation, vary by region, and supports renewable electricity usage claims when cancelled. Whilst they are both environmental commodities, carbon credits not the same as EACs, they are different: they represent quantified greenhouse gas reductions or removals (usually 1 tonne CO₂e) and are used to offset residual emissions (Scope 1 & 3), not to evidence renewable electricity sourcing for‍ market-based (Scope 2) disclosure.

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Expiry ends the period of time after production when an EAC can be used for an end-user renewable claim. It represents one of two ways that an EAC lifecycle ends (the other being cancellation). Expiry rules vary per jurisdiction and per EAC type: GOs under the EECS framework have a dual-deadline: certificates are tradeable for 12 months, then enter a 6-month redemption-only window (meaning cancellation is allowed), hard-capped at 18 months (all functionality ceases). UK REGOs implement a 16-month rolling expiry, with Ofgem executing automatic cancellations as per this schedule. North American RECs show the widest variation, ranging from 3-months in New England to 4-years in Wisconsin. I-RECs have no registry-level expiry and remain technically valid indefinitely.
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Note: Registry functionality is the technical maximum, but reporting frameworks can vary in vintage matching rules, causing a functional expiry separate from registry mechanics. See claims and vintage to learn more.

Granular certificate matching (more broadly conceptually referred to as "granularity") pairs generation timestamps with EAC retirement intervals at sub-annual resolutions, working to ensure that renewable energy generation and EAC retirement are occurring within highly aligned timeframes (sometimes, as aligned as hourly or sub-hourly), boosting the credibility of a claim. Groups and pacts dedicated to collaborating on the topic exist: such as SEForAll and 24/7 Carbon Free Energy, fostering conversation and dialogue. Yet, whilst "hourly matching" is emerging as a discussion point and potential standard for the market to evolve into, it's not currently clear how a shift towards granularity would impact EAC price dynamics, or if market infrastructure is currently prepared for that leap (at least in the immediate future).

Guarantees of Origin (GOs) track renewable electricity attributes across European markets via conventional book and claim, acting as Europe's dominant EAC. Producers receive one GO per megawatt-hour delivered to the grid, and issuance occurs after production data is transmitted to the respective national registry operator. Guarantees of Origin are bought and sold, and exit supply via expiry or cancellation.

GOs are regulated by EU Directive 2023/2413, (commonly known as REDIII), and are operationalised via the EECS rules (overseen by the AIB).

Operating via the The I-TRACK Foundation, International Renewable Energy Certificates (I-RECs) are the predominant international EAC, and can be accessed via the Evident registry or Virtual Accounts. Unlike other EACs, they never expire. They must be redeemed in the same market where the energy was generated and are equal to one megawatt-hour of renewable generation. I-RECs are issued by local issuers: all I-REC issuers are published by Evident, as well as a list of I-REC(E) participants.

Power Purchase Agreements bind electricity buyers to specific generation facilities through contracts spanning 10-25 years, occasionally longer, allowing for long term hedging and predictability regarding the cost of power. Physical PPAs deliver electricity, typically via the grid. Financial PPAs (termed virtual PPAs or contracts for differences) settle the differential between contract strike price and wholesale market indices. Renewable PPAs are contractual instruments under market-based Scope 2 because environmental attributes transfer: typical PPA structures explicitly include certificate transfers.

RE100 functions as a private corporate electricity procurement standard & initiative. Member companies source 100% renewable electricity, aligned with their self-declared deadlines. The initiative defines eligible sourcing instruments and credible claims via technical specifications and guidelines that are maintained by The Climate Group.

Renewable Energy Certificates track renewable electricity generation across North American markets. Each REC represents one megawatt-hour of renewable energy generation from qualifying facilities. The certificate unbundles energy attributes from physical electricity for market-based claims because the grid mixes all power sources physically. For carbon accounting, valid RECs can provide Scope 2 emissions reductions under the GHG Protocol's market-based method.

Residual mix represents the attribute profile (the renewable status of procured energy) left after certificate retirements remove tracked generation from regional pools. Calculated annually by organizations like AIB (European Attribute Mix), DESNZ (United Kingdom's Residual Mix Data), Green-e (North American residual mix methodologies), these organisations use the residual mix to, in-effect, assign market-based emissions factors to those who consume electricity, yet who do not retire certificates.

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‍Residual Mix is not to be confused with the grid-average emissions factors used in location-based reporting.

Scope 2 emissions quantify indirect greenhouse gases from energy procurement (purchasing). These figures are disclosed by reporting organisations. Unless following a different standard, disclosure practices obey the GHG Protocol Corporate Standard and Scope 2 Guidance. Companies are required to calculate and report two separate figures: location-based emissions using grid average factors, alongside market-based emissions reflecting an emissions figure calculated by applying the emissions factor of contractual instruments (required to avoid using the emissions factor from the residual mix). Final market figures are typically disclosed after valid use of contractual instruments like EACs or PPAs, deemed valid if they meet the quality criteria established by the GHG protocol.

Unbundled procurement of EACs refers to the procurement of energy and EACs in separate transactions, usually with the intend to cancel EACs for market-based Scope 2 disclosure. Certain entities, like traders, procure EACs with the intention of selling them rather than cancelling them, which can still understood as an unbundled purchase. Only the party that ultimately cancels an EAC can make the renewable consumption claim.

Vintage, the timestamp of electricity production, refers to the generation date or time period when the renewable energy, tracked by an EAC, was produced. It's used by reporting frameworks and compliance schemes to impose vintage matching rules that determine which certificates are eligible for use. For example, "2025 Vintage" EACs carry the renewable attributes of electricity generated in 2025. As generation metadata is carried by each certificate, expiry timelines are applied from the point of generation onwards. After that period, the certificate's vintage is too old for usage and is technically worthless, which is also why older vintage EACs fetch lower prices as they approach expiry. Certain schemes may disallow certificates before the expiry date, even if they remain technically valid in a registry. For instance, Green-e® requires certificates to be no more than 21 months old relative to the reporting period, and RE100 recommends this as a "reasonable practice". This prevents companies from using old certificates to claim renewable energy use, ensuring claims reflect contemporary generation. Standard-driven vintage requirements like these is alsowhat creates a functional expiry for I-RECs, despite their perpetual registry validity.