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What is the best way to decarbonize your power use in Southeast Asia? This article explains the 4 major power purchase mechanisms and their advantages and considerations. To better evaluate the best option for corporates, the 4 mechanisms are compared at the end.
1. Renewable Energy Certificates
Each REC represents for 1 MWh of renewable energy and the purchase of which helps to finance the take-off of renewable energy projects. For corporate users, RECs can be used to reduce their Scope 2[1] emissions by making claims that for each REC they purchase 1 MWh of their electricity comes from renewable energy sources. Essentially, RECs are a product that matches electricity use to renewable energy supply.
2. Corporate Power Purchase Agreement (CPPA)
A corporate power purchase agreement (CPPA) is a long-term contract, usually lasts from 5 to 20 years, depending on market maturity. PPAs ensure that the consumers are paying for the use or creation of renewable energy and not just using unbundled RECs to offset emissions from energy consumption. I