Energy Attribute Certificate (EAC)

An Energy Attribute Certificate (EAC) is a digital commodity representing the environmental, social, and other non-power attributes of one megawatt-hour (MWh) of renewable electricity generation. Essentially, when a renewable energy facility like a solar or wind farm produces 1 MWh of power, it can also create one EAC. These certificates are crucial for businesses and organisations to credibly claim they are using green energy, even when the physical electricity they consume from the grid comes from a mix of sources.

EACs function as the primary accounting tool for tracking and assigning ownership of renewable energy generation. They effectively "unbundle" the clean energy attributes from the physical electricity, allowing these attributes to be bought, sold, or traded separately. This mechanism is fundamental to both voluntary green power markets and some compliance schemes globally.

How Does EAC Trading Work?

The trading of Energy Attribute Certificates is based on a "book and claim" system. This process ensures that a claim to using renewable energy is legitimate and not counted twice.

• Generation and Issuance: A certified renewable energy generator (e.g., a wind turbine operator) produces electricity. For every 1 MWh of power fed into the grid, an independent body issues one unique EAC with a serial number.
• The "Book and Claim" System: The physical electricity enters the shared grid, where it mixes with power from all other sources (including fossil fuels). The EAC, however, is a separate digital asset that can be sold to a buyer anywhere. The buyer "claims" the renewable attribute, while "booking" the physical energy from their local grid.
• Purchase and Retirement: A company purchases EACs to match its electricity consumption. To make a valid claim (e.g., "Our data center is powered by 100% renewable energy"), the company must "retire" the certificate in an official registry. Retirement ensures the EAC is permanently removed from the market and cannot be re-sold.
• Global Standards: While EAC is the generic term, different regions have specific names for their certificates. The main types include:
  • Guarantees of Origin (GOs) in Europe.
  • Renewable Energy Certificates (RECs) in North America.
  • International RECs (I-RECs) in many other parts of the world.

Concrete Use Cases

• Corporate ESG Reporting: A multinational corporation with offices across Europe wants to meet its goal of sourcing 100% renewable electricity. Since it cannot build a solar farm for each office, it calculates its total annual electricity consumption and purchases an equivalent volume of Guarantees of Origin (GOs) from a wind farm in Spain. By retiring these GOs, it can legally report zero market-based Scope 2 emissions for its European operations.
• Sustainable Product Branding: An eco-conscious clothing brand wants to label its products as "Made with 100% renewable energy." It tracks the electricity used in its manufacturing facility and buys corresponding EACs from a local solar project. This provides a transparent and verifiable way to back up its marketing claims and appeal to environmentally aware consumers.

EACs are a key instrument in corporate sustainability, but they address a different aspect of climate action than carbon allowances. While EACs focus on electricity inputs (Scope 2), instruments like EUAs tackle direct emissions (Scope 1). [Learn about the difference between EACs and Carbon Allowances like EUAs]. For more detailed information on global standards, you can consult an authoritative body like [The I-REC Standard Foundation].