New renewable energy initiative aims to benefit developing countries

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New renewable energy initiative aims to benefit developing countries

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A new not-for-profit initiative called the Distributed Renewable Energy Certificate (D-REC), backed by multiple stakeholders, is developing an internationally recognised market instrument acting as a guarantee of origin for distributed renewable energy.

The new mechanism intends to increase access to clean energy among the public, create new investment and revenue in developing markets, produce clean energy ‘additionality,’ and support and amplify global corporate uptake of traceable renewable energy from developing economies.

Existing clean energy attribute certificates, commonly known as ‘Renewable Energy Certificates’ (REC), is a common way for businesses to achieve mandated or self-set emissions targets. However, some have criticized its lack of transparency and proof of impact, amid accusations of greenwashing.

Different from existing REC models, D-REC provides new traceability and transparency through its underlying open-source digital ledger technology that can validate the source of clean energy in developing markets from distributed, mini-grid projects that support isolated communities or specific infrastructure such as schools and hospitals.

This offers a mechanism for leveraging finance from corporations that are either seeking to procure clean energy to reduce Scope 2 emissions or create new sources of clean energy that offset traditional fossil fuel use in specific countries.

This finance may then be deployed to build new mini-grid projects or supply revenue to isolated communities already using decentralised solar power.

D-RECS creates a new way to certify and value distributed renewable energy. Furthermore, as an open-source tool, D-RECs are a non-proprietary, transparent public good, open to all market players.

Cash flow from the sale of the project’s D-RECs, via the D-REC platform, has contributed materially to a blended finance solution of grants, debt, and equity, helping unlock additional project finance.

“This is a complex space and one that we are determined to simplify” said Gian Autenrieth, Co-Lead, D-REC Initiative. “We want communities in developing nations to reap the benefits of investment in renewable energy projects, to increase the amount of renewable energy available worldwide, and for businesses globally to be incentivised, through certified, trusted instruments, to purchase renewable electricity to meet their ESG goals and power their businesses. Our work in Haiti is a prime example of how we can deliver real positive change through creating a mechanism to validate the origin of distributed renewable energy production, enabling us to catalyse finance for expansive clean energy development that makes a real difference to communities living in energy poverty.”

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