The D-REC Initiative:
Creating a new global mechanism for the certification of distributed renewable energy (DRE)
The D-REC Initiative:
Creating a new global mechanism for the certification of distributed renewable energy (DRE)
Our mission is to accelerate the energy transition in emerging markets.
The D-REC Initiative is a not-for-profit, multi-stakeholder, industry-led initiative to create a global market for distributed renewable energy. We are designing, delivering and demonstrating new ways to certify and value distributed renewable electricity attributes through the creation of a new, internationally recognized market instrument called the D-REC (Distributed Renewable Energy Certificate).
The innovation will generate:
- New sources of revenue and improved unit economics for DRE projects
- Improved economics for Results Based Financing (RBF) programs
- New mechanisms for corporates to achieve Scope 2 and 3 targets
- New ways to measure and monetize other environmental and social benefits, such as carbon, energy access, and other Sustainable Development Goals (SDGs)
- Accelerated deployment of DRE in emerging markets
Why now?
Access to clean, reliable, safe and affordable energy is critical to improving lives of people around the world. Today, an estimated 840 million people still do not have access to affordable electricity.
Distributed renewable electricity (DRE) in emerging markets generates significant value locally (for end users and communities) and globally (through positive climate impacts).
However, the large environmental and social benefits of DRE are not yet being appropriately valued, resulting in under-investment in much-needed new capacity. Innovation urgently is needed to catalyze new sources of capital and climate finance to achieve the goals.
Leading global corporations are investing in the energy transition and are a promising new source of capital. Over 220 corporations have committed to 100% renewable energy. In 2019, corporates contracted for over 19GW of new renewable capacity. Many have global footprints that reach into emerging markets via their own operations (Scope 2) or through customers and supply chain (Scope 3).
Renewable Energy Certificates (RECs) are widely used market instruments that allow corporate purchasers of renewable energy to make third-party verifiable claims about the sources of their electricity. RECs, GOs, TIGRs and other such electricity market instruments have become powerful catalysts driving investment into renewables in many markets.
The D-REC Initiative is designing, delivering and demonstrating a new market instrument – the D-REC – that will accelerate the energy transition in emerging markets and support the achievement of Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, sustainable and modern energy for all by 2030.
The Opportunity
Connecting DRE developers with multinational corporate renewable investors.
DRE can help address both climate change and energy poverty.
840 million
people still without access to electricity
USD 500 billion
required annually until 2040 to meet growing consumption
More than 50%
of new capacity to meet global UNFCCC COP targets must be renewable
35%+
of renewable capacity growth through 2050 will be distributed
Corporations driving new renewable capacity, but their impact is limited in emerging markets.
200+
multinationals committed to 100% renewable energy
Over 80%
of corporate procurement limited to North America and Europe
Global Scope 2 and 3
emissions are difficult to address
Limited transparency
around energy use across global footprint
Enhancing the renewable certification framework
RECs are designed to certify renewable energy generation, but are generally only used in utility-scale deployments where applicability can vary by country.
RECs should be extended to certify distributed renewable energy globally in a scalable manner, and encapsulate the other societal benefits that DRE provides.
The D-REC initiative seeks to introduce a new renewable certificate, a Distributed Renewable Energy Certificate, that uses corporate renewable procurement mechanisms to catalyze the positive social impacts associated with distributed renewable energy capacity
