Open Energy Access
Open Energy Access
How project developers can generate income with Distributed Renewable Energy Certificates
In this episode of Open Energy Access, I talk with Ricky Buch (Tech lead) about why project developers should start integrating into the D-REC platform today. The D-REC, or Distributed Renewable Energy Certificate, was created to solve a problem that will have a direct benefit for Energy Access project developers and for corporates who want the biggest return on their investment in renewable energy in terms of climate impact.
In this episode, we'll discuss:
- How you can generate new revenue streams with D-RECs
- Steps of integrating into the D-REC platform
- Why the D-REC platform is Open Source
- What makes the D-REC stand out as the most promising way to monetize environmental attributes in the DRE space
This episode was originally recorded as a web series and is posted on Youtube. If you also like to watch your podcasts, then subscribe to the EnAccess YouTube channel.
Links:
enaccess.org/drecs
d-recs.energy
D-RECs on GitHub
Energy Web Foundation Origin
Contact:
D-RECs developers
EnAccess Support
Tamara:
Hi everyone, this is Tamara Mahoney. I work at the EnAccess foundation and this is the Open Energy Access web series. So today I'm gonna be talking with Ricky Buch from Positive.Capital Partners about the D-REC initiative. And it's not the first time that Ricky and I have spoken. There's actually a previous episode. I think it was about six months ago where we also spoke about what was happening with D-RECs, but things have moved a lot since that time. And we're at a pretty exciting moment to catch up again. So really happy for this conversation to take place today. Thank you, Ricky.
Ricky:
Thank you for having me.
Tamara:
So quick introductions again, my name is Tamara. I work at EnAccess and EnAccess is a foundation that funds open innovation in energy access. We were one of the first, if not the first organization to come along and support the D-REC initiative, this amazing idea that originally came from Positive.Capital Partners and South Pole. I'll have Ricky introduce that in just a minute. And since it's been a couple years now actually since it first came through as an idea. And like I said, we're at a pretty exciting moment. So Ricky, why don't you introduce yourself and let everyone know kind of, you know, the quick story of the partnership between capital partners and south pole and just tell us the basics of what the D-REC initiative is all about.
Ricky:
Absolutely. And again, thanks for the opportunity to be here. So my name is Ricky. I'm a co-founder of Positive.Capital Partners. There are two other co-founders as well for the company Paul Needham and Nick Fedor. And we’ve been working with South Pole group in co-leading this D-REC initiative. Now for about two years, we started in just actually just around the time COVID lockdown started. So we launched Positive.Capital. The three of us came together really to start Positive.Capital because we thought we saw capital in the market, which was, you know, all of us had experience trying to build renewable energy projects in emerging markets. And we saw that access to capital has remained one of the perennial challenges that developers face. At the same time we saw this tremendous growth from corporate led, renewable procurement. I believe it's, you know, half of all wind in the US has been installed because a company decided to purchase electricity from that wind farm. And that's why we wanted to essentially harness that same momentum, but really direct some of that towards the emerging markets and in particular, the off-grid sector. And that's when we partnered with South Pole to launch the D-REC initiative, which was to develop the market mechanisms, commercial contracts, the constructs necessary to enable corporations that have climate targets like net zero targets or 100% renewable energy targets to be able to support new renewable installations in emerging markets. Particularly those in the off-grid sector.
Tamara:
Okay. And the D-REC of course stands for distributed renewable energy certificate. Can you briefly explain what is the, what is the newness? What is the innovation there? What is a distributed, renewable energy certificate as compared to what our audience might know as a renewable energy certificate?
Ricky:
So, maybe actually it’s helpful to start from the very beginning. Let's go, what is a renewable energy certificate? Yeah, so it really started with compliance markets. So governments were increasingly taking a stand on decarbonizing the energy sector and were asking utilities to procure renewable energy. The challenge of course, is that it's very hard to know where an electron comes from, right? Because you have multiple plants feeding into a transmission grid and there's unfortunately no way to tag an electron. And so what the regulatory regime essentially developed was this idea of an intangible certificate that would represent the value of electricity produced from a renewable asset. So if you have a solar plant, you actually produce two commodities, you produce electricity that goes into the grid or in case the off-grid sector goes to, to load and a renewable energy certificate. And those are sold separately. So utilities that would have a mandate to procure 25. I have 30% of their electricity from renewable energy and would need to have the corresponding number of certificates.
And they could really get that two ways. One was through power purchase agreements where they would contract directly with a solar or wind developer, or they would just buy the certificates. And in a lot of cases, that's the only option you really have. And so one ended up happening was a lot of utility scale developers relied on this offtake agreement for the certificate to help finance projects and that morphed into the voluntary space. So as companies started taking stands around climate change and their missions and wanting to address their missions or power their operations with renewable energy, they took the same approach that the utilities have taken, which is that we now need to own these renewable energy certificates. And again, in developed markets where it's possible to have bilateral arrangements with utility developers, with these companies, and engage in those PPA contracts.
And so you see in the news headlines like Google or Microsoft is signing these massive PPAs with Wim developers to procure both used electricity to power their data centers. But what's often not mentioned is that they're not just procuring the electricity. They're also procuring the certificates because they need the certificates in order to make a credible claim around powering their operations with renewable energy. But in most of the markets in the world, companies can't do that. They can't bilaterally engage with the developers, so they have to buy certificates. And that's, again, circling back to why we started the D-REC initiative. And we think this is an important way to catalyze new capacity. A lot of developers in emerging markets can't rely on a REC offtake agreement, unlike developers in say your country or in the US. And so that's what we wanted to enable.
But a lot of the frameworks, particularly for existing environmental markets, don't really extend to the off-grid space. And so that's why we decided to create a distributed, renewable under certificate that was specifically targeted at developers who were building small scale projects not 200, 300 megawatt utility scale systems, but 100 kilowatt systems that were powering schools or hospitals that traditionally have not been able to monetize those credits, unlike their utility scale counterparts. And that's what the D-REC is meant to solve. It's a distributed certificate that's created from a kilowatt hour of electricity produced by a renewable asset that's often behind the meter or in an off-grid setting. And we have developed a software platform to help automate the verification of those certificates and to enable them to be traded and bought by companies who can then use those certificates against their greenhouse gas targets.
Tamara:
Thank you so much for that. That’s a really clear explanation, and it leads me perfectly into introducing this topic for our audience specifically. So, there's so many ways to talk about D-RECs. I mean, you have all these different streams of work going on, but what we're gonna talk about today and specifically for the audience that is interested in the kind of work that EnAccess does is we're really talking to energy access developers today. So I'm gonna ask the kinds of questions that I know are on their minds about what they need to know. So these are the people who are making distributed renewable energy and might not know yet about how they can actually become involved. One of the targets that EnAccess has as a foundation is to maximize the adoption of open source in energy access.
And of course the adoption of projects that we participate in. And so, you know, when I say maximize the adoption, I'm really saying, I wanna talk to every single person that might need one of the innovations that we've worked with, or just one of the innovations that exist in general, and say, you should use this, you know, go ahead and start using it. Where are you running into problems? We wanna save you time and money. We want to give you something that will allow you to do the work faster, or will allow you to increase revenue so that you can scale more quickly. And there's a lot of things that excite me personally about the the D-REC initiative, but among I think the the two things that I wanna highlight to get started off with that I can see being very interesting for developers is that D-RECs can create this new revenue stream for energy access in a sustainable way. So it's going to create a new market to sell the environmental attributes that are created by distributed renewable energy. You just were speaking about that, but could you go into a bit more detail about how exactly that looks for the developer?
Ricky:
So we intend to mirror a lot of the way buyers corporate buyers are used to purchasing renewable energy certificates in more developed markets and the way they tend to do this is they essentially enter into a multiyear agreement where they pay upon delivery per megawatt hour of certificate delivered. So what ends up usually happening is is that if you say, have a utility scale solar farm and you have entered into a multiyear agreement with a corporate buyer to sell your Rex to them usually at the end of the year, or sometimes know, every, every six months you produce a report that says you generated so much electricity. It goes to a verifier who oftentimes will work with a grid operator in the US, it's usually an ISO or an RTO who will then use the data that the developer provided and validate it with actual pool dispatch logs from the grid operator.
And so, yes, indeed the solar plant did produce so many megawatt hours. And they often build, generate a report that they give to the company saying you have this many certificates in the company that pays the developer usually for an intermediary for those certificates. And that's generally the process we intend to roll out for our developers. So a company would engage a market intermediary like Positive.Capital or South Pole to say that we would like to purchase certificates from a particular country, we will then turn around and engage with a variety of developers to source those certificates. Often entering into multi-year agreements to say that, you know, per kilowatt hour you generate, we will pay you this much money. After we validate that you indeed de generator generate this amount of electricity we would then create a digital certificate which we are currently using distributed ledger technology to track. We will then sell that to the corporate, the corporate pays us and then we then pay the developer. So we essentially have these back to back contracts and we will facilitate that. So it's not the developer having to necessarily engage bilaterally with a corporate offtaker because that's a lot of time and resources and the ManCom to fruit. So, market intermediaries like ourselves will essentially facilitate that transaction.
Tamara:
You know, one of the things that sticks out to me is that this could potentially fill the gap that maybe is being neglected right now by donors and energy access. So it's 100% common to say, yeah, the thing that we need more of is more help with operations day to day operations. So maintenance, everything that falls under that category, is that how you see it too? When the idea came and you started working on it, was it to fill that gap? Could you talk a little bit about that?
Ricky:
Yeah. There's definitely a few models and value points that we see the D-REC offering to a project developer certainly on one level. Absolutely. We do think that a D-REC off agreement can help support the ongoing operating cost for a project. Maybe the best example of that is a project we're working on right now with UNDP in Uganda where they are looking to electrify health facilities. The first phase being 11 sites. So UNDP has put up the capital to build these sites. These are solar storage systems that will power mainly maternal wards. But often, you know, there's concern that: Will there be ongoing resources to ensure the systems remain up and available? And so that's where we engaged on the D-REC side saying, well, what if we were able to monetize you know, every kilowatt hour that those systems generated we'd sell those certificates to a corporate and then money would be used to actually support the OPEX contract on an hour basis.
And so that's how we've structured that particular project. And that resonated with a lot of donors and other GFIs, because as you said tomorrow there's, you know, they put the money up front, but there's no guarantee that the systems will be operating in five years. Right? But we would provide that incentive through a D-REC contract to ensure that the systems are made up. We also do think that there's value in having these offtake agreements to help bring new capacity online so much like how utility scale developers have used a multi-year REC agreement as a firm offtake to help get financing. We think that's also a role that the D-REC optic agreement can pay. And even in some instances we may think that there's value in providing a bit of the money front. So say you have an eight year off agreement, perhaps intermediary like ourselves, or might say, well, we'll pay two years front.
And that will offset the owner's equity requirement, help crowd and senior debt. It's something we're testing right now with some of our partners, including the IFC and CDC group which is to really test the hypothesis that, you know, does that really help big projects become viable? You know, where before, our developer would have difficulty sourcing 30% owner's equity, but if we're able to pay for a year or two upfront that reduces that burden and brings in additional debt financing. So that's something that we're testing right now, but we think there's many models in which the D-REC can help bring new capacity online.
Tamara:
That's really big news. This is really exciting stuff. Are you hoping for, or maybe you've already planned for this that the buyers of D-RECs could assign a higher value to the D-REC because the impact is that much higher, for example if I understand correctly, the D-REC right now doesn't do that. It doesn't assign a higher value depending on where it's coming from, but the PREC does - it's a different kind of I-REC. And again, please correct me if I'm a little bit off on that. But will the D-REC also be able to do this? Is that something you're planning for kind of saying, like, look, because it's coming from this particular area, it has a higher value.
Ricky:
That's certainly the way we've been positioning the D-REC and our conversation with funders. We've been saying that this is helping to support projects that have very high social co-benefits. Okay. So it's not just providing clean electricity, it's also providing reliable power to a hospital or to a school. Okay. And as we know, oftentimes those projects are much more financially marginal. And so having an offtake agreement and for D-REC can be that much more impactful. But the buyer should realize that they're not just paying for electricity, they're also paying to support the additional co benefits. So that's certainly how we position the D-REC as an instrument, but I will say we've designed it not to be just specific to the off-grid sector. It's one that we think is broadly applicable to distributed energy overall. So we intend to use this as an instrument to help support CNI projects, in addition to some of the higher impact off-grid installations.
Tamara:
Okay. So let's say I own a mini grid company or a solar home system company. I'm hearing what you're telling me. And I'm like, wow, this sounds really exciting. You know, I wanna be involved in this and I've got a big staff of people. I've got super smart developers who have the skills to do just about anything. Right. And so I say to them, all right go ahead, connect to the D-REC. I wanna be in on this. Can they do that today and how do they get started? What is step one?
Ricky:
Yeah, absolutely. So I would say that in general, we are early days in establishing the market. And so, we at Positive.Capital are working very closely with South Pole to be the leaders in terms of really trying to facilitate this market foundation from starting to grow. So if you're a developer, I would say the first step is really to get in touch with us. And tell us about your project pipeline. What are you operating on right now? What do you tend to build over the next 12 or 24 months? Because on the flip side, what we're also doing is having conversations with, with early corporate buyers. These tend to be the climate leaders that have really pushed the envelope in terms of addressing their footprint address, not just their direct footprint, but in many cases, the footprint of the suppliers, many of whom happen to be in places like Southeast Asia or Sub-Saharan Africa.
Ricky:
And so we're looking to pilot direct transactions with some of these corporate buyers. And we're in the process of assembling a pipeline of opportunities that we can present to them. So we're in the early days of a market. So you know, what we'd like to envision is we have multiple intermediaries competing for business, talking to developers you know, finding ways to engage and solicit pipeline that they can then sell to, to off-takers, but we're not there yet. We're early in the market. So that's where we at PCP (Positive.Capital Partners) and South Pole are looking to collaborate and really build this bridge between the buyers and project developers. So, the first step is: tell us about your pipeline. We will then, you know, engage with, with the leads that we have on the buy side to see if they would be interested in buying the D-RECs from those projects.
Ricky:
This is where the narrative really has a focal point ensuring that we're focused on high impact projects, that the buyer sees the value that the projects will provide on the ground. In addition to, you know, getting the REC that they can use against their greenhouse gas targets. Okay. If we find an agreement and the, the corporate buyer says, yes, I will buy, you know, these D-RECs from these projects at, at $30 a megawatt hour for seven or eight years you, we will then turn around and contract with that set developer and this next step after that is to really connect those projects into the digital platform that we have built to help traceability and certification. So we've built an open source platform in partnership with the energy web foundation. And what this essentially does is it, it takes in data in real time from projects validates that data and creates a digital certificate that represents, you know, a kilo hour megawatt hour of clean energy and that what we will then sell to the corporate and what the corporate then retires all that's tracked on the, on a public ledger.
Ricky:
So from an audit standpoint, the corporate can simply point to that record and say, look, this is how much energy we actually bought from these different sources. But effectively that's how we enable that traceability. And so when the corporate buys that certificate, they pay us and we then pay the project developer.
Tamara:
So you're going to once the company kind of connects to you, they send you an email, you've looked at all the pipelines, you sign a contract with them, like come some kind of exclusivity contract, or we can talk about that in a second, but just to get the stuff. Yeah. And then once everything is working, they're basically sending you their live data. They're sending you how many kilowatt hours of distributed, renewable energy they are creating.
Ricky:
That's right. Okay. Yeah. The open source platform has a public API that essentially allows a developer to register their projects on the platform. And then to send in data in real time at, at any frequency, really the platform actually issues certificates on a daily basis. But you know, we know that connectivity can be unreliable. It can sometimes be costly. And so it really, you know it, it's more driven by what the buyer would like to see than, than anything else, but you know, there's definitely that flexibility of sending in data as frequently as, as necessary as needed or as wanted. Okay. And then the platform will create the certificates based on that.
Tamara:
Okay. you know, if you'd like to share anyone who has already, maybe reached out to you or any companies that you'd like to work with this is, of course, we're not setting this in stone. We're not committing to this, but is there anyone out there that you'd like to kind of mention as like, yeah, this would be an interesting company to work with, or we've already started exploring options with this company, just to kind of tell the developers out there, give them some examples, you know, if they're wondering, is this something for me? Am I the right sort of operation setup? Why don't you clarify that a little bit?
Ricky:
Yeah. Yeah. I would say we're very open to developers who are looking at all sorts of applications and configurations. You know, we've had discussions with companies like Okra that have, and VBO that have proprietary hardware and software. They built we have conversations with, with companies like Engie that are looking at what the solar home system market and the mini group market. We've also had conversations with CNI developers that work in places, India, for example, Candy Solar and you know, many of them have looked at the platform and are actively trying to either in the process of doing so or have done. So figuring out how they can actually use public APIs and send in data and get the generated data validated from those assets to create certificates.
Tamara:
Okay. So they're waiting for you basically, they're kind of getting, or, you know, potentially getting set up and they're waiting to have those corporate buyers come on board to start spending or, or where are we in late April, 2022. So anything could change, but they're basically their idea getting involved now, what's, what's the advantage of getting involved now, if they're not able to yet see the money come in to be, yeah pretty clear.
Ricky:
The platform that we've built is really a proof of concept platform. So I think for us you know, speaking sort of selfishly as the D-REC initiative, what we're really keen to do is get feedback from developers, right. And so you know, one of the benefits of being an early adopter for the platform is to help us shape what this platform looks like so that it can suit, you know, your needs. So if you have a particular tech configuration or use a particular OEM, or you have this certain topology, we can ensure that the platform is designed to incorporate that. So that's really the value in working with us at this stage. And then certainly, you know, we are in the process of engaging these corporate buyers and part of the way we're doing that is by highlighting projects. Okay. So, you know, engaging with us now, particularly if we're able to work on the technical integration side, it would help us highlight and promote the projects that, you know, these are doing? And frankly, we just have a higher likelihood of getting the corporate interested in purchasing D-RECs from those projects.
Tamara:
Okay. Well, that's - I mean, if you ask someone who works at a foundation that supports open source innovation that sounds like music to my ears. I mean, we at EnAccess, we also want to encourage people to get involved in this because we want to see that feedback. We want to see the community - we know that with the feedback, with the saying “Hey, you know, we do it like this, it doesn't look like you've considered that aspect” - we know how much that kind of thing helps out. So I also encourage people for so many reasons to become an early adopter of the D-REC platform. And especially because it gets you to be part of this open source community. And actually, why don't we talk about that, just laid out really clearly what we mean by open source, because you're talking about this platform. It's an open source platform.
So my understanding is that I could, then if I had the correct skillset, I could basically just copy everything, right? I could tweak it, if I feel like tweaking it, I could give it a new name and I could start generating D-RECs. I could hook up with different developers. I could find corporate buyers and I could just go off and do this. Of course, it would maybe take years of work to get there, but is it that open source? Is that what we're talking about here?
Ricky:
Yes. What we've done is the D-REC platform that we've designed in partnership with EWF is public knowledge, public code. So anyone can go in and see how the system actually operates. There's two components. I would say there's an off chain piece, which is a registry more like a database, and there is an on chain piece. So the off chain piece is what keeps the metadata for the projects and the organizations and the users. And then the on chain piece is really where the certificate life cycle is tracked. So when it's certificate is created, when it's traded and particularly important for the buyer when it's retired so they can have that audit trail from where it was generated to when they retired it. And so the off chain piece is, is like I mentioned, just a database and anyone can really replicate that.
What we're really focused on is the public ledger element. You want a single source of, for how those environments are attributes were monetized because there is a risk that buyers will sometimes mention of double counting ensuring that a developer did not monetize the same unit electricity two ways, say with a REC and a carbon offset, or maybe, you know, two re schemes for that same time period and having a public ledger built on the energy web chain allows us to do that because it is publicly accessible public queryable. It is that even if you were to replicate the registry piece of it and copy it and run your own registry, it's still connecting to the smart contracts that connect to the public ledger for that single source of truth. And so that was a key for us, which is to, we wanted to ensure there was transparency and trust in the process.
And the way we felt we did that would do that would be through, through an open source approach. The other thing I'll mention is that there is a validation phase to this. When data comes into the platform, we don't take it just as is we do run some, some checks on it, and we wanted to be very transparent with the community on how those checks were done. And so it's clear that, you know, when a, a, if data is sent in and fails the validation, it's clear why it failed because it ran through these set of equations. The other benefit for us as the D-REC is that we get to crowdsource in intelligence on how to make the verification more robust. So if the community essentially agrees that this is the right approach for how to validate data, so we ensure a level playing field, a fair playing field for everyone. Then we know that that will, again, further engender trust with the corporate buyers, because they see again fully how this is all done end to end.
Tamara:
So then you would ask for a company to sign some kind of exclusivity deal to only - well, let me ask the question, instead of leading you into the answer, would you ask a company to sign some kind of contract, some kind of exclusivity deal? And is this something that you think that we need to explain for the donors, for the funders? You know, what should they kind of, what should they know about this? If they, if they're like, oh yeah, you know, I'm, you know, talking to this company, who's selling solar home systems, and they're telling me that they're, they've just signed a contract with the D-REC Initiative, what does this mean for them?
Ricky:
Yes. So from a developer's perspective, when you signed a contract with say Positive.Capital or South Pole, you are saying that you are selling the attributes from a particular project or set of projects to us, which means that you cannot turn around and sell those same attributes to someone else because fair of double counting risk. So what we essentially say is you are exclusive when we do enter a contract with you for the environmental attributes from a donor's perspective, and this is really about de-risking project, because what we are essentially offering is a guaranteed offtake, not on the financial performance of the project or payment from an end user, it's about how much electricity you generate. And we offer that payment in hard currency, like US dollars. So, a lot of the developers we talk to see this as, again, a way to source some additional financing to provide a foreign exchange hedges and can myriad other ways that a hard currency offtake can provide.
The other thing we'll note is that this is not mutually exclusive to say an RBF program is okay. That these can coexist together that a donor could put in RBF program. And at the same time you know, we can come in as an, as an offtaker for the D-RECs And from the developer's perspective, we essentially have two guarantees now that you can work with; one around performance and how much electricity is generated and one based on maybe additional criteria, like having the project commissioned. So we think there's definitely value in combining those together to further catalyze development.
Tamara:
All right. Well then let me come to the last question because you know, maybe someone who's watching this right now, and they're a developer and they're like, all right, you know, I'm pretty excited about this. You know, I'm gonna look into it and, you know, we're all busy people. We don't have tons and tons of time to invest in every new thing that comes our way. And, you know, I've been in energy access now for about 10 years. It's not something that I knew I was gonna stick around in for so long. And I hope I'm here for a lot longer, but in the time that I've been in energy access, I've seen so many ideas and so many you know, companies and projects that sounded really, really promising and they fail.
And, you know, speaking from the EnAccess perspective, failure is not the worst thing in the world. That's one of the reasons why we open source everything, because if something does fail well, we hope that we can put the lessons out there for others to learn. But besides that, what reassurance do I have as a developer that this is something that I should put my time into? Why is the D-REC the most promising way to monetize my environmental attributes in the DRE space? Why D-REC and not Solstroem, or the P-REC or anything else that’s not the same, but there are other options that are in the same space. So why go D-REC?
Ricky:
So yeah, let me answer that question by taking a step back. I think a lot of developers sometimes today are weighing their options in terms of monetizing re attributes. And it primarily comes down to: Do I monetize my projects through the carbon markets, or do I do this REC instrument and we'll get into different flavors of the REC. But that's sort of fundamentally that binary choice, the tricky part with carbon markets is that there's a lot of upfront investment that's required because you have to prove a baseline that's not going to happen. So my project is moving forward and it's gonna reduce carbon by this much. Well, some has to come and validate that, oh, you know, is the community using kerosene right now? Are there diesel generators on site? How much carbon would those be emitting?
What would this project then do in terms of reducing that there's a lot of upfront investment that has to happen. It's not unexpected to see an upfront cost of 25 or $30,000 for an assessment like that. With a D-REC it's very binary, it's zero-one it's “did the electricity get generated or not”. And buyers buy the D-REC for that clean electricity that's been generated. So you're not trying to prove a counterfactual of emissions. Would've been this, but, you know, they're at X, but now they're, Y it's really just this much electricity was produced. So the transaction costs on the REC side are significantly lower. So we say that when it comes to large renewable projects and by large, basically anything above a kilowatt of 200, it makes sense to go the REC route.
For very small projects, the mechanisms that are used to convert from electricity to carbon potential are favorable for very small projects. So, okay. If you have a 200 watt solar panel going the route of what Solstroem offers is probably more appealing because the carbon equivalent is much higher for the initial allotment of electricity. But as you start getting to a kilowatt, two kilowatts and beyond that, the value of the REC becomes much higher. Okay. so that's generally how we would see those two options. Now within the REC, there are a variety of flavors. We think that the D-REC is, as a common denominator, that can enable the other REC frameworks. So it's not again an “either or” it's really an “and” situation.
So the P-REC for example you know, they've done energy piece partners has done a great job in establishing an, an additional label around quality to say that this particular, you know, renewable asset is addressing humanitarian need, or is in a very fragile conflict written area. And they have tremendous experience in working in those regions. So they understand the on ground realities. So you could have a D-REC that comes from a project in those regions that then energy, peace partners goes and validates and says, actually, you know, there's some additional humanitarian co-benefits to this particular D-REC. And so we see that as a way to enhance the value of a DREC, because there can be additional labels that are applied to those kind of projects. But we also know, you know, ultimately this all is all going to work only if we have buyers, right?
If buyers are willing to buy these D-REC certificates and they, of course, and you mentioned sort of this sort of the, the problem of how do we know this is gonna be around in a few years? And that's the first question we often get from buyers - if we're going to enter into a 10 year agreement, how do we know this is gonna be around that this instrument will be valid? And so what we've decided to do is not introduce our own state standard with the DREC, but to really work closely with existing established environmental standards. So we've been working very closely with the international REC standard with the gold standard with Vera and ensuring that the D-REC instrument is fungible in that it can be transposed into an I-REC or to, into a gold standard REC.
And so a developer who works with the D-REC framework automatically gets that. So in the unlikely event that, you know, all the D-REC kind of infrastructure goes away, there's still that tie to the existing standards that corporates have supported and acknowledged you know, and have been around for, for many years. So that's one way we've ensured that we can provide confidence to the corporate buyers that indeed this instrument's gonna be around because we are very closely aligned with, with the standards that they know, and that they recognize today.
Tamara:
You know, and it's not just assurance for the corporate buyers. It is assurance for the developers too. I mean, it absolutely works both ways. And so I'm really glad that you answered the question that way, because it's a concrete answer. It's not just, you know, “we're planning and the idea is…” I mean, this is let's say - it’s done enough. It's time to invite developers to come on board as early adopters. Where things still might get a little bit bumpy, but it's ready.
Ricky:
Right. And we, as the recognition, you know, us at PCP and South Pole, are looking to transition from a multi-stakeholder task force to a more permanent organization that will oversee the software platform and the alignment with the standards and engaging with corporate buyers. And so one of our goals this year is to help either stand up a new organization or to align right closely with an existing organization and essentially establish a D-REC initiative organization or foundation that will continue the work moving forward. You know, as we at the secretariat, you know, as a Positive.Capital and South Pole, look to commercialize the D-REC instrument with corporate buyers.
Tamara:
All right, well, as always, I feel like we could talk forever. And I hope that, you know, we can catch up again in another six months or so, you know, see how things have changed from there. Talk about the lessons that we've learned along the way. Again, always trying to let developers know that you can look to Positive.Capital for the answers. You can look to EnAccess to ask the questions that are still out there. So if there are questions that you have, perhaps you have more after you've seen this, let us know. So I'll put the email address that they can contact you, and will also have the email address for EnAccess. And we can create an FAQ. We can contribute as much as we possibly can, we want to help people get involved with the D-REC initiative and get on the D-REC platform.
And we wanna start seeing that kind of revenue stream flow into the D-REC space. And yeah, we'll keep you updated with all of that. So all the contact information will be below. If you are watching this again, my ask for you is to contact Ricky, tell him that “ I'd like to be involved, I want to tell you about my pipeline”. And my next Ask is that you check it out, even if you are not the person that makes those decisions, educate yourself about it, learn what the D-REC Initiative is about, so that you can tell your friends, so that we can get the word out so that this can become a household name. And thanks again for your time Ricky, it's always a pleasure to talk to you and thank you.
Ricky:
Thank you for the opportunity.
Tamara:
I look forward to keeping the conversation going, so this doesn't have to be the end and yeah, thanks for your time. I never quite know how to say it to end it. See you later! That's actually the best way to end Ricky. Do you have anything else that you'd like to say?
Ricky:
And if I could just say one thing. Well, I just wanted to say that EnAccess has been a strong partner from the very beginning. And so we're very appreciative for all the work and support through the years. And we are looking forward to the next steps.
Tami:
Thank you. And I did not ask Ricky: could you say that? So thank you for not only saving the outro of this, but also giving a shoutout. It's been a great experience the whole way. So until we talk again! My name is Tamara. This is Ricky, and thanks for watching Open Energy Access. Go ahead and share this with everyone who needs to be a part of it. Thanks, Goodbye!