Renewable Energy projects include hydro, wind, and photovoltaic solar power, solar hot water and biomass power and heat production. Many renewable energy projects have high up-front capital costs, although they may offer high rates of return, and their operating costs are often minimal once built. However, legislative hurdles and local opposition to a project can complicate the implementation of such projects.
Renewable energy projects are crucial for the long-term protection of the global climate because they help us move away from fossil fuel-based electricity and heat production to more benign forms of energy production. Yet it is in many cases difficult or impossible to determine the additionality of such projects because renewable energy projects are revenue-generating, and the details of revenue and expenditure are complex.
Not all renewable power projects are benign. Hydro power projects in particular are controversial because they can have large negative environmental and social impacts. Several offsets standards therefore require that hydro projects above a certain size comply with the World Commission on Dams (WCD) Framework, which outlines a framework for decision-making based on five core values: equity, sustainability, efficiency, participatory decision-making, and accountability.
Indirect emissions reductions:
Renewable energy projects lead to so-called “indirect emissions reductions”. In other words, emissions are not reduced at the wind farm where the, but in the fossil fuel power plant which has to produce less power because of increased supply from renewable sources. Who then owns this emissions reduction? Is it the fossil fuel power plant or the wind farm? Read more about this topic here.
Renewable Energy Credits (RECs) are often converted to carbon offsets and sold in the voluntary market. Yet this is controversial because RECs are a different commodity than carbon offsets and can therefore not easily be converted. To learn more about RECs and why we think they should only be used for scope 2 emissions (emissions associated with your electricity use) go here.