Struggling to meet a self-imposed goal of running city government operations on 100% clean electricity by 2030, Louisville Metro officials are suggesting a somewhat controversial approach to get there — they want to buy renewable energy certificates.
The certificates — or RECs — can be bought by governments or corporations to stake a claim to the green energy produced by a specific project, like a solar farm. Even if they won't directly receive that energy to light up their own buildings, they can claim it as part of their power usage.
Louisville Mayor Craig Greenberg’s team wants Metro Council to approve spending up to $700,000 a year on RECs from a future solar energy project in western Kentucky. But a council committee rejected the proposal last week. The full council is expected to vote on the matter on Thursday.
RECs get criticized as a form of greenwashing when groups use misleading tactics to market their operations as more sustainable than they actually are. Buying RECs for a project several counties or even states away isn’t the same as a business directly powering its headquarters with solar panels spread over the building’s roof, for example.
Louisville Metro Council Member Khalil Batshon, a District 25 Republican, likened the RECs to being the "crypto of energy” at Metro Council’s Labor and Economic Development Committee last week.
“I am not in support of writing a $700,000 check for a piece of paper that says we are clean of this energy that we're never going to use,” he said
But local sustainability advocates say buying RECs is a good way to hit the city’s 2030 sustainability goal.
“When it comes to greenhouse gases, a pound of greenhouse gases removed from the atmosphere, anywhere in the world, helps the whole world,” said Sarah Lynn Cunningham, the executive director of the Louisville Climate Action Network. “So it doesn't matter if the solar panels are in western Kentucky or downtown Louisville. … If the city signing a contract for those solar panels in western Kentucky leads them to build new solar panels and bring them online, that is a net gain to society.”
Often, RECs are offered for renewable energy projects in other states, said Sumedha Rao, the outgoing executive director of Mayor’s Office of Sustainability.
“But to have a Kentucky-based project that is meaningful, that has the local community buy-in, is very rare,” she said.
How they work
RECs are the American renewable electricity market’s widely accepted method of validating claims of energy generation and use, according to the U.S. Environmental Protection Agency.
Once power is generated by solar panels and sent to the regional electric grid, it’s mixed in with electricity made by other sources, including fossil fuels. It’s impossible to track a specific source of electricity to the customers that receive it, said Zachary Tyler, Louisville Metro’s energy manager, at last week’s committee meeting. That’s where RECs come in.
“The renewable attributes of clean energy are bought and sold and traded separately from the delivery of electricity to a facility,” Tyler said. “Any entity, anywhere, that is claiming meeting a 100% clean energy goal has done so through … RECs. And that's true even if that energy were generated on-site or sold directly by their local utility.”
The city would be buying credits from a solar field in Henderson County, to be built on a reclaimed coal mine. The Kentucky Center for Investigative Reporting asked for the name of the project, but Rao wouldn’t say, citing concerns about confidentiality rules for deals like this.
A 10-year contract for the RECs would cost up to $700,000 annually, according to the proposed Metro Council resolution that, if passed, would encourage the mayor to make the deal.
Rao said RECs like these, bought before a facility is built, have higher value because they’re considered a contribution to bringing a renewable energy project online.
Powering city operations with 100% clean electricity is the first of three big sustainability targets Metro Government set in 2020.
She told KyCIR via email that the city hopes to buy RECs representing enough electricity generation to fully meet its 2030 goal of running city operations using 100% clean electricity.
Then the city could pursue other options to increase its local renewable energy usage and reduce its reliance on the Henderson County RECs over time, perhaps even selling off ones it no longer needs.
Slowing the pace of climate change requires investing in renewable energy and relying less on fossil fuels. In Kentucky, most electricity is still made by burning coal and natural gas.
City officials say it’s tough to meet 2030 green goal with other strategies
At last week’s committee meeting, Rao told council members that buying RECs in a non-city renewable energy project isn’t the best way to meet that goal. However, she said the city faces barriers to pursuing other strategies.
They’re working to make city operations more energy-efficient, reducing “overall energy usage from baseline by about 15 percent” so far and saving about $1 million annually.
Another approach is installing rooftop solar arrays, but she said many Louisville buildings aren’t good candidates. For example, roofs that get too much shade won’t work.
Batshon, the District 25 Republican, questioned spending $700,000 a year on RECs instead of using the funds to buy solar panels for local use. But Rao said the money goes farther if it’s invested in a large solar project like the one in Henderson County.
“The $700,000 would maybe help us put solar panels on, say, like five buildings,” she said. “Versus in this situation, it's helping bring online about 35 megawatts of solar, which is a much larger quantity, and would help us get to our 100% goals more efficiently.”
Another option the city has considered is paying for utility-scale, local solar projects. But Rao said opportunities are limited, in part due to state regulations.
One option Louisville has is to go through Louisville Gas & Electric’s Green Tariff program. But there are cost concerns, and also the city isn’t a big-enough customer, by itself, to qualify for one of LG&E’s main solar offerings.
Wallace McMullen is an activist with the Renewable Energy Alliance of Louisville, the citizen group that proposed and pushed for the 2020 resolution that set the 2030 clean electricity goal.
“For me the driving force is: Climate change is going to destroy us all unless we move rapidly toward renewable energy,” he told KyCIR.
He said it’s not necessarily a bad idea for the city to buy the RECs, which are comparatively low-cost and can be done quickly. If the move comes with a strong promise from the city to keep working toward building local renewable energy options, that’s a positive sign.
However, he said investing in a project that’s over 100 miles away isn’t “quite within the intent of the spirit of the resolution.”
“We’re hoping to see a burst of solar installations and renewable energy development here in Jefferson County,” he said.
A ‘high-quality sustainability effort’ or just a ‘feel-good resolution’?
Some Metro Council members aren’t sold on the idea of buying renewable energy credits for a Henderson County solar farm.
“I have yet to hear a member of the Republican caucus that supports this. I think we may be unanimously against it,” said Metro Council Member Anthony Piagentini, a District 19 Republican and chair of the minority caucus.
Piagentini said he doesn’t support the “feel-good resolution” to buy RECs.
“If there is skepticism of the green energy movement, this is why. It is not because people are necessarily anti-solar or anti-renewable and clean energy. I think those are all laudable things,” he said. “But when you start playing these games where we're going to buy – or we're going to finance, essentially – solar panels in a completely different rural area of Kentucky, and therefore we are going to claim that we are a clean city or renewable city … This is a joke.”
He suggested the city ditch the “arbitrary” 2030 deadline as it works to make its operations more sustainable.
Metro Council Member Andrew Owen, a District 9 Democrat, is sponsoring the RECs proposal and he was skeptical, too, when he first heard the Greenberg administration’s proposal.
“RECs are not all created equal. And there are RECs that are, in my opinion, greenwashing,” he said.
But he said these are high-quality RECs and, by buying them, the city can help bring this Kentucky-based solar project online.
One question that came up in last week’s council committee meeting was: What’s the city’s return on investment?
Owen acknowledged RECs won’t yield a literal financial gain, whereas other eco-friendly moves, like making buildings more energy efficient, do. But that doesn’t mean there isn’t value, Owen said.
“Our return on investment is that we're helping bring more sustainable energy into the grid,” he said. “To me, that's a high-quality sustainability effort.”
