First Climate analyzes current I-RECs trends at REC Market Meeting

“Markets Driving Growth in Renewables” – this was the motto of this year’s ninth edition of the REC Market Meeting in Amsterdam. Year after year, international experts and market participants meet in Amsterdan to shed light on current market developments and to discuss the general framework for green energy trading.

First Climate supported the Meeting as a sponsor and contributed to the event’s programme by leading a session titled “International Renewable Energy Certificates (I-RECs): market developments and outlook”. In her presentation, Sarah Drevermann, Manager Renewable Energy of First Climate, analyzed the state of the international REC markets as well as current consumer and buyer behavior.In this interview she talks about current trends affecting the development of volumes and prices in the I-RECs sector.


Sarah Drevermann
Manager Renewable Energy

Sarah Drevermann works as Manager Renewable Energy at First Climate since 2017. In this positin, she works on providing renewable energy solutions for corporate clients.

How did the I-RECs market develop in 2018?

Sarah: After the sharp increases with multiplying transaction and retirement rates in previous years, the development of the market cooled down slightly during the past year. However, we have again seen a high double-digit growth rate. International I-RECs certificates equivalent to 5.3 terawatt hours have been cancelled for reporting year 2018. Compared to 2017 figures, this is equivalent to a 45% market growth.


What are the reasons behind the increasing demand?

Sarah: There is a strong link between demand for green energy by the corporate sector and the success and growing influence of initiatives such as RE100 or Science -Based Targets. Many RE100 members have set themselves ambitious interim targets of covering 30% of their total electricity consumption with renewable energy by 2020. As this date is drawing closer, corporate buyers are seeking to raise the share of renewables in their overall consumption. This clearly fuels demand.

In addition, the impacts of the Paris Agreement are becoming increasingly visible in the green electricity sector. Several countries – including Mexico, for example – have enacted or are considering enacting legal regulations for the mandatory purchase of renewable energy.


Where will the REC markets take us to in 2019?

Sarah: We expect a further increase in demand. Building on the key findings of the IPCC Special Report, the Science- Based Targets Initiative has recently carried out a comprehensive update of its recommendations to encourage companies to review their climate goals. In many countries, the changing political framework and the development of compliance markets are expected to lead to further development of the RECs markets in the coming months. As in previous years, the number of countries participating in the I-RECs system will continue to grow. Consumers will, therefore, find it easier to source I-RECs from markets where they have an electricity footprint, as it is required by the Scope 2 Guidance of the GHG Protocol.

Furthermore, we will see a further differentiation of the market in 2019: Factors such as the origin of the I-RECs and quality labelling will play an increasingly important role for consumers. There will be more options to choose from, but this will also make sourcing more complex.