The Business Times: Registry launched for renewable energy certificates

By Andrea Soh

Following the landmark offsite power purchase agreement between Apple and local solar company Sunseap, a pilot project for renewable energy certificates – thus far a foreign concept in South-east Asia – has been launched in Singapore.

The platform is expected to allow companies without the ability to invest in their own solar panels or other renewable energy sources to buy green energy certificates, and those with excess green power to sell to them. But with the concept so new to the regional market, some observers question whether it will take off here.

American environmental infrastructure solutions provider APX Inc this week announced a new renewable energy certificate product, with the first phase generated by solar projects in Singapore.

Called Tradable Instruments for Global Renewables (TIGRs), they will be issued on a new APX registry, which will be open for participation in Singapore and also Asia.

Renewable energy certificates represent electricity produced using environmentally friendly processes, and can be sold to a third party. They are similar to the concept of carbon emissions trading, but kilowatt hours, instead of tonnes of avoided carbon, are traded.

In certain states in the US, the law mandates that a certain percentage of electricity produced must use renewable sources. Within Asia, India has a renewable energy certificates market. But there is no such regulation in Singapore, making it a voluntary market which will be driven by companies wanting to boost their green credentials. This comes after Apple’s announcement in November last year that it will power all its Singapore operations with solar energy. The tech giant struck a deal with Sunseap to receive power generated by photovoltaic systems on the rooftops of more than 800 buildings in Singapore; this arrangement, which gets around the problem of space constraints, is said to be the first of its kind in South-east Asia.

The APX platform will open up the market for other companies which have such constraints, said Monika Bieri, a research associate at the Solar Energy Research Institute of Singapore (Seris). Seris is helping APX to verify that the electricity represented by TIGRs is green, and that there is no double counting of environmental benefits.

“Those who don’t consume solar power in-house can sell this to someone else who doesn’t have a roof and wants to match their electrical consumption with renewable sources of energy,” Ms Bieri said. This could facilitate companies that hope to make their electricity consumption more sustainable, she added.

According to Bloomberg New Energy Finance, companies that want to have a significant portion of their energy usage coming from renewables have multiple options: to invest capital and own projects directly, to buy green power from renewable energy services companies producing it, or buy certificates in a regulated or voluntary market.

“Certificates may find favour in markets where generating own clean energy or buying it from renewable energy power generators is difficult due to licensing reasons or lack of access to the power grid,” said BNEF analyst Ahish Sethia. “They can also appeal to firms who may not want to put a lot of initial capital to build projects.”

The relatively immature state of the market here, coupled with the voluntary nature, however led some observers to question how well-accepted it will be.

“It’s a great idea, what they’re doing, but I don’t know what the take-up will be,” said Ken Cheung, a partner at law firm Bird & Bird specialising in energy and utilities. “In a broad sense anything that is voluntary will be difficult for people to take up … I think it’s probably early stages.”

Copyright Singapore Press Holdings Limited. All rights reserved.

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