Renewable Energy Certificates

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It is through the National Interconnected System (SIN) that the plants drain their energy so that it reaches the households of final consumers throughout Brazil. Several energy producers inject through the grid, which means that energy from various sources (fossil and renewable).It thus makes it impossible to identify which power source reaches the final consumer.

That's where the RECs come into play: which REC represents 1 megawatt/hour of renewable energy generated. From the acquisition of these certificates by the end customer, in the same proportion of the energy consumed in a given period, it is possible to have traceability of the source of this energy, thus proving that it comes from a clean source and allowing the end customer to compensate for its indirect GHG emissions (Scope 2) of that period.

To obtain the authorization of issuance and transaction for the certified renewable energy, the wind farm must submit a document audit process that, in Brazil, is carried out by the Instituto Totum and needs to achieve 4 requirements

- Generation of energy from a renewable source.
- Technical and legal qualification for power generation.
- Connection to the grid of the National Interconnected System (SIN).
- Lack of double count beneficiaries.

If the project also meets additional sustainability criteria, such as having its practices aligned with at least 5 of the 17 Sustainable Development Goals (SDGs) of the United Nations (UN), it is possible to obtain an additional label, the REC Brazil.

The demand for RECs is growing more and more in the market. The company that acquires the certificates, in addition to compensating its GHG emissions, highlights its socio-environmental commitment and gives credibility to the indicators reported in international programs, such as the CDP (Carbon Disclosure Program) and the GHG Protocol (Greenhouse Gas Protocol). For the issuer of certificates, the transaction represents an important source of revenue and adds important value to the business.

Brazil has been standing out over the years in the issuance of renewable energy certificates and, in 2021, Voltalia's ventures were responsible for the largest volume of REC Brazil issued during the year.

Stamps I-REC and REC Brazil

Carbon Credits

In order to keep up with new market trends, highlighting the Group's sustainability initiatives and engagement with the ESG agenda, Voltalia has taken a step forward by initiating the certification process for some of its operational assets so that they can participate in the global carbon credits market and issue and trade these certificates.

The sale of carbon credit certificates is a mechanism allowed in the voluntary market by countries that have emissions reduction targets they have not been able to substantially meet and therefore need to compensate for them. In this way, greenhouse gas (GHG) reduction becomes economically valuable, and these certificates can be traded in international markets at a rate of 1 carbon credit per 1 ton of CO2e emitted.

The global carbon market began to develop during the Kyoto Protocol but gained momentum in 2015 with the Paris Agreement, which, among other initiatives, proposed controlling the increase in the global average temperature so that it does not exceed 1.5°C compared to pre-industrial emission levels.

As a target, Brazil has committed to reducing GHG emissions by 43% by the year 2030. As a contribution from Voltalia in this climate emergency scenario, three of our main wind power complexes (Serra Pará, Vamcruz, and São Miguel do Gostoso, all located in Rio Grande do Norte - BR) underwent a rigorous process of documentary and on-site audits, during which some of our infrastructure was verified: the Gerencial Operation Center (COG) in Mossoró, the main facilities of the audited power plants, and their connection points to the National Interconnected System (SIN), substations, and monitoring and energy billing measurement rooms.

In addition to the visited points, a series of documents were also analyzed, such as operating licenses for the audited power plants, ANEEL authorizations for the operation of these plants, technical specifications of the wind turbines, monthly energy generation data, calibration certificates for energy delivery meters, among others.

This rigorous process resulted in a detailed document evaluated by UNFCCC (a United Nations entity) for verification and approval of carbon credit issuance. Once the assessment and validation phase is completed, the credits can be issued and traded with end customers.

The audited ventures already have MDL (Clean Development Mechanism) certification, and it is expected that these and other ventures will soon be certified by the GCC (Global Carbon Council) and the Gold Standard as well among other certifications.

Interested in learning more about how this process is progressing, the main challenges, and successes? The
Sustainability Team in Brazil is available to answer your questions!