Kiwash Electric Cooperative Unveils Wind Energy Marketing Program
The WindWorks TM retail marketing program was officially unveiled by Kiwash Electric Cooperative in May. WindWorks TM is a new program that allows cooperative members to participate in Oklahoma wind power by purchasing unbundled Renewable Energy Certificates (RECs) equal to a portion or their entire monthly energy bill.
This program is being administered through Western Farmers Electric Cooperatives (WFEC), the power supplier for 19 rural electric cooperatives, including Kiwash Cooperative. WFEC is purchasing 74.25-megawatts of wind energy from the Blue Canyon Wind Farm, near Lawton . This site went into commercial operation in December of 2003.
An REC is a receipt generated when power from a renewable energy source such as the Blue Canyon Wind Farm is delivered to the transmission grid. Each REC represents the environmental benefits of 100 kilowatt hours (kwh) of electricity produced at the wind farm. RECs make it possible for families and businesses that want to support the development of renewable energy to participate in these historic projects by matching up some or all of their monthly electricity consumption with RECs from the wind farm.
WindWorks’ TM unbundled RECs have a retail price of 50 cents per 100 kwh block. So, a typical Oklahoma family that consumes 1,200 kwhs of electricity each month could match 100 percent of their use with WindWorks TM RECs for an additional $6.00 per month.
Power generated at the Blue Canyon Wind Farm enters the transmission grid along with power from all other sources utilized by WFEC. On average, about five percent of the energy flowing into the meters of cooperative members, on an annual basis, originates from the Blue Canyon site. Members participating in WindWorks TM receive the same blend of electrons that every other member on the system receives, but they become owners of the environmental benefits associated with the unbundled RECs that they have purchased.
The following gives a more in-depth overview of the program:
What is a Renewable Energy Certificate (REC)?
- An unbundled REC is, in effect, a receipt for a specific amount of renewable energy placed on the grid and represents the environmental advantages of that renewable energy.
- Every electron generated from a renewable resource and placed on the grid is, in fact, more valuable in the marketplace than electrons from traditional sources. This value comes not from the energy itself (an electron is an electron), but from the specific environmental advantages that the “green” electron has over other sources. The additional value brought by the “green electron” to the market is represented by an REC that is issued when the “green electron” is placed on the grid. The value of the REC is based then, not on the tariff or work value of the electron but on the value of the environmental attributes in the marketplace.
- An REC provides a mechanism whereby; the environmental attributes of renewable energy can be sold in the marketplace. RECs may be tied directly to an energy sale in a “Green Power” tariff, such as the programs currently offered by Oklahoma Gas & Electric (OG&E), and sold as a bundled product or unbundled and sold independently.
Why would People/Businesses Buy RECs?
- To Support Renewable Energy: By participating in WindWorks TM and purchasing unbundled RECs, supporters of renewable energy are able to purchase the actual commodity they value (the environmental benefits created by renewable energy) and actively demonstrate their support of renewable energy. WindWorks TM gives cooperative members an opportunity to participate in developing future renewable energy by exercising demand in the market.
- To Encourage Development of an Oklahoma Resource: There is a growing demand for value-added products and services that are “Made in Oklahoma .” WindWorks TM takes an Oklahoma commodity – wind – and adds value by delivering to the marketplace the environmental benefits of wind when used to generate electricity. Many consumers will see their purchase of unbundled RECs through WindWorks TM as an opportunity to financially support the development of an “ Oklahoma commodity.”
A regional and national demand for RECs is driven by mandated requirements and a desire by commercial/industrial customers to support “green energy” and the environment. When local consumers participate in WindWorks TM, their added demand removes RECs from the market, creating incentive for further development to meet the regional/national need.
- To “Own” the Environmental Benefits: There is a growing trend among a segment of consumers to support environmentally friendly programs and to become more conscious of the environmental impact of household and business operations. By purchasing unbundled RECs, consumers are able to tangibly prove that they are taking proactive measures to improve the environment and encourage the development of environmentally sound energy sources. This class of consumer is not seeking to own the actual “green electrons,” their interest is in the environmental benefits that electrons from a renewable source bring to the system. Those attributes are delivered via an unbundled REC.