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What is a ZEC?
RECs are the foundation of our business at Phoenix, and our clients know that what makes us stand out as a compassionate and trustworthy energy supplier are these RECs.
Renewable Energy Credit/Certificates (or RECs) are proof that the energy we supply to our clients is generated from renewable sources. They are credits by the megawatt (MW) value and are purchased to be used as verification. They are retired after their use not to be reused or resold again. RECs have been around for years as a verification process for renewable energy, but newly on the horizon, especially for New Yorkers are ZECs. ZECs have been in the news recently regarding their regulation, but what exactly are ZECs?
ZECs- standing for Zero-Emissions Credits- ae a big deal because they are a first step in developing a “carbon tax” as the cost of a ZEC is calculated based the projected social cost of carbon. While RECs are bought in conjunction with solar or wind or hydro credits, ZECs are exclusively for nuclear energy.
A ZEC is now an obligatory purchase for all energy suppliers as of April 1, 2017- although while not buying directly from the generation source, load-serving entities (LSEs) like Phoenix will be buying direct from NYSERDA.
While there is a requirement for purchasing ZECs the amount required is a fraction of a percent of total energy supply which lends itself to a reinforcing the idea that nuclear energy, while an important source of zero-emission energy, is not to compete with or replace renewables such as wind or solar.
What are the impacts of ZECs?
Fortunately or unfortunately, ZECs are only produced by New York nuclear power plants of which there are only four upstate owned by two companies- Exelon and Entergy. ZECs have the potential of saving these nuclear plants that experienced difficulties in the market last year and were on the verge of shut-down.
By maintaining this standard, New York, flaunts its commitment to a renewable and sustainable future. While battered by some criticism, adding an additional requirement to boost renewable sourcing for energy can only, in our opinion, start to show the change we need to see in New York to improve our future.