Renewable Energy Certificates (RECs)in Six APEC Southeast Asia Economies
Joint Meeting EGNRET 58 and EGEDA 34
Hawaii, 5 April 2023
Ario JATI – Senior Researcher

What is REC ?

• It represents environmental attributes associated with 1 MWh of renewable electricity.
• REC serves to address the scope – 2 emission reduction.
• A tradable commodity: bundled and unbundled with electricity.

Sources: USEPA

2REC demand driver❖ Several corporate sourcing of RE electricity :❑ Self-generation❑ Power Purchase Agreement (PPA)❑ Utility green procurement❑ EAC (ex. RECs)❖ Importance of RECs in APEC Southeast Asiaeconomies❑ Demand : corporates wish to meet RE-100targets❑ Supply : renewable power plants seek
additional sources of revenue streams❑ Regulator : hope to use RECs as policy lever toboost renewable investment.
https://www.there100.org/

The RE100 group of companies, committed to achieving 100% renewable electricity

Source: Global Renewable Report of REN21, RE100

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Typical REC Mechanism• The REC starts when the RE power plant registers its generation device with the issuing organization.
• Third-party auditor involved to independently verify the amount of RE generation to the number of RECs.
• The Issuer issues the REC, and through REC’s Registry, the REC is tracked from electricity sources until theend-user claims.
4Comparison of EAC/REC in Selected APEC Economies
USJapanAustralia

Start year

• First trading of REC 1998

• GEC launched in 2000

• REC launched in 2000

Types of market andcertificate system• Compliance market (RPS : Renewable
Portfolio Standard)• GEC (Green Electricity Certificate): for selfgeneration• Compliance market (RET: Renewable
Energy Target)• Voluntary market for electricity retailconsumers• J-Credit: for voluntary electricity customers topromote EE and RE. trading unit in the amount ofCO2• REC type :• NFC (Non-Fossil Certificate): for electricity retailers
to meet the 44% non-fossil target by 2030 andprevent exploitation of FiT generations.
Estimated market size

• Compliance 358 TWh (2020)• Voluntary 192 TWh (2020)

Trading and trackingsystem• Different system in each region (Ex.
NAR, ERCOT, etc)

• LGC -Large Scale Generation
Certificate, and•

STC – Small-ScaleTechnology• GEC 585 GWh in 2020 ; J-Credit (renewable energy)
980 GWh in 2020 ; NFC : 189.7 TWh in 2020

• 36 TWh (LGCs) in 2022

• GEC: tracked by JQA (Japan Quality AssuranceOrganization)• National system (REC Registry)
managed by the CER: Clean EnergyRegulator.

• J-Credit by J-Credit auction (online)• 10 TWh (STCs) in 2022

• NFC by JEPX (Japan Energy Power Exchange)
Lesson (key points)• Introduction of RPS and REC resulted
in large market size and participants• Voluntary market gained popularity,
enabling different market offerings• Each certificate serves different purposes.
• Nuclear is included in NFC• Single authority/single system topromote and regulate REC• 2 type of certificates (LGC & STC) toserve different needs
Source : USEPA, NREL, CER, RE100, Renewable Energy Institute5Overview of RECs in six APEC economies in Southeast Asia
Total RECs Issued in Six Economies, 2015 – 2H22 (TWh)(Indonesia, Malaysia, Philippines, Singapore, Thailand, and Viet Nam)

Total Registered RE Capacity in Six Economies (2015 – 2H2022)(Indonesia, Malaysia, Philippines, Singapore, Thailand, and Viet Nam)

9.00
8.00

Wind7.00

6.00

Thermal

5.00
4.00
Solar

3.00
2.00

Hydro

1.00
2015

2016

2017

2018

2019

Hydro

Solar

Thermal

2020

2021

2H220

1 000

Wind

Sources: I-REC and TIGR registries

2 000

3 000
TIGRs

4 000

I-REC

5 000

6 000

MW

Sources: I-REC and TIGR registries•REC markets in six APEC SEA economies started around 2015 and grew quickly with the demand from corporate electricity
consumers who have obligations to meet RE targets increased.

•The International REC Standard (I-REC) and the TIGRs (APX) registries are used in APEC SEA economies.

•By 2H2022, accumulating RECs: 29 TWh issued by I-REC and TIGRs.
Notes:
Thermal: Biomass and geothermal combined

6Overview of RECs in six APEC economies in Southeast Asia
Indonesia
Types of market andcertificate system

Malaysia

Philippines

Singapore

Thailand

Viet Nam

Voluntary market Voluntary market Voluntary market Voluntary market Voluntary market Voluntary market
with RECwith REC
with RECwith REC
with REC
with REC

Cumulative registered REcapacity (2H22)

1.5 GW

2.3 GW

1.4 MW

0.8 GW

3.9 GW

2.9 GW

Cumulative RECs issued(2015-2H22)

4.3 TWh

4.0 TWh6.3 TWh1.2 TWh

6.5 TWh6.8 TWhREC certification andtracking system

I-REC, TIGRs

I-REC, TIGRs

I-REC, TIGRs

I-REC, TIGRs

I-REC, TIGRs

I-REC, TIGRs

REC issuer

GCC, APX

GCC, APX

GCC, APX

GCC, SPX, APX

GCC, EGAT, APX

GCC, APX

50 THB(1.47 USD)

0.25 - 2.04 USD

Market-based
REC prices*IDR 35 000(2.29 USD)

37 MYR(8.3 USD)(only from PLN
platform)(bundled- only formGATs platform)

NA

SGD 15 to 25(11.3 -18.8 USD)

*Sources:www.pln.co.id
https://getsolar.ai/blog/rec-singapore-how-to-sell/
https://www.bangkokpost.com/business/1999115/toyota-buys-egats-first-rec-for-fuel
USAID Report: USAID VIETNAM low Emission Energy Program

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Overview : RECs in Thailand
Thailand Number of Issued RECs, 2017 – 2H22 (MWh)REC mechanism under I-REC Registry

2,500,000

2,000,000

1,500,000

1,000,000

500,000

Process :1.Buyer REC (Participant) notifies REC purchase request to REC seller (Registrant).
2.REC sellers receive REC audit and certification from EGAT (Issuer).
3.EGAT delivers certified RECs to REC buyers through the I-REC registry system.
4.The REC buyer pays the REC fee to the REC seller.
Sources: EGAT2017

2018
Hydro2019
Solar2020
Thermal2021

2H22Wind

Sources: I-REC and TIGR registries• A voluntary REC market started around 2017 using I-REC and TIGRs registries (mostly I-REC).
• EGAT (utility) plays a role as a local REC Issuer under the I–REC.
• Registered RE generation capacity of 3,9 GW with total accumulated REC issued 6,5 TWh (2H22)• Challenges: more than one platform for REC procurement, no boundary for REC trade : the REC can bepurchased and redeemed outside the country.
8Overview : RECs in Indonesia
Utility’s (PLN) Unbundled REC via TIGRs

Total RECs Issued in Indonesia, 2018 – 2H22 (MWh)1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2018

2019

2020

Thermal (Inc. Geo)

Hydro

2021
Solar

2H22Wind

Sources: I-REC and TIGR registries

Sources: PLN.

• Voluntary REC market started around 2018
• In 2020, Utility started selling unbundle REC via TIGRS exclusively to its customer (IDR 35 000/MWh: 2.29
USD/MWh). REC is retired immediately.
• Challenges: dispute on REC ownership for generator under PPA, some REC coming from RE power plant
which have been in operation for some time, the market has not been clearly regulated.
9Overview : RECs in Malaysia
The mREC mechanism under mGATS platform

Total RECs Issued in Malaysia, 2016- 2H22(MWh)
1 600 000
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000
200 00002016

2017

2018
Hydro

2019
Solar2020

2021

2H22

Thermal

Sources: I-REC and TIGR registries• Voluntary REC market started around 2016 (I-REC & TIGRs)• MyGreen+ (local registry) started in 2017 and has been replaced with
Green Electricity Tariff (GET) program since 2021.
• GET via the mGATS platform (I-REC registry) offers bundled RECs (mREC)
for TNB’s customers (37 MYR/MWh: 8.3 USD/MWh).
• Challenges : more than one platform for REC procurement, mREC available
only for TNB customers, and some REC comes from RE power plants thathave been in operation for some time.
10Key Summary of REC in APEC SEA Economies❑ REC markets in APEC SEA economies are relatively new and are growing rapidly. The markets in APEC SEA were initiallydeveloped to respond to the demand for RECs from renewable energy consumers in voluntary markets.
❑ The REC markets currently conform with I-REC Standard and TIGRs registry, which are accepted internationally.
Nevertheless, several economies plan to develop their own registry to further facilitate and regulate the REC markets tomeet their specific goals and targets.
❑ Most APEC SEA economies have not yet established a clear legal framework or guidance governing the REC market.
❑ In several economies, the RECs came from renewable generations which have already been in operation for more thanten years or already been enrolled in the Feed-in Tariff program, raising the issues of additionality – are RECs encourageincremental renewable energy capacity.
❑ There is evidence of REC ownership disputes between IPP and utility for renewable power generation under PPA thatneed to be addressed.
❑ Several economies are working to limit REC transaction within the country to serve increasing local needs. Currently theunbundled RECs in APEC SEA economies are traded across the economy’s borders.

11Findings❑ If designed properly coexistent compliance and voluntary REC markets can accelerate RE investments.
❑ A legal framework, legislation, and a dedicated governance body for REC are crucial and should be a priority
in establishing an effective REC market.

❑ Domestic REC trading platform and harmonised standards are essential tools to facilitate REC transactions,ensure integrity and prevent double-counting.
❑ REC market should encourage additional investment in renewable energy generation capacity.
❑ Clear ownership of REC for existing independent RE generators should be incorporated into the existing
electricity generation legislation or new REC legislation.
❑ The interaction of REC transactions across six SEA economies should be studied and evaluated.

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Thank You for Your Attention
Ario JATI – Senior Researcher
ario.jati@aperc.or.jp