Some 55 ski area operators as of late February were claiming to get at least a portion of their energy from wind and other renewable sources, and 26 stretched even further to claim complete offset of their consumption of carbon-based energy.

But are areas truly offsetting their energy emissions? To use the phrase of one energy activist, are ski area operators truly “moving the needle” for production of electricity?


THE RENEWABLE ENERGY MARKET
Very few ski area managers are directly cutting use of electricity generated from traditional sources. Only a few have, or will soon have, wind turbines or solar panels on their premises. Instead, most clean-energy purchases are technically of renewable energy certificates, or RECs. In a way, these RECs are like any currency, a medium of exchange, but with one critical difference: the RECs are good only for energy from wind, solar, and other renewable sources.

In this way, RECs, which are sometimes called “green tags,” create a flexibility in the market. Because the electric grid is all interconnected anyway, it matters little where a resort’s electricity is produced. A ski area in Colorado could, for example, buy electricity (via RECs) from wind farms in Texas, but instead consume electricity produced locally by burning coal. On a more global scale, the total impact is the same as if the area had bought wind power directly: fewer emissions of carbon dioxide, a key greenhouse gas, as well as sulfur dioxide and mercury.

A ski area operator, however, might well wish for a local connection. For example, coal-fired power plants are notorious for their emissions of mercury. If mercury deposition in high-mountain lakes around your ski area has been noted, it might matter where your alternative energy is produced.

The flexibility of RECs in assembling supplies to meet demand makes them important in the emerging market for renewable energy, says Matt Clouse, program director for the Environmental Protection Agency’s Green Power Partnership. “The flexibility that RECs offer has really meant a big growth in demand in the marketplace,” he says. He cites the example of a Kinko’s manager, trying to buy alternative energy for a string of stores, working with a variety of utilities. It was, he says, just very hard to do, and the creation of RECs made large purchases possible.

This pairing of buyers and sellers of alternative energy is usually done by brokers, whose expertise allows them to line up quantities of electricity and also to know various sources. Some market observers say the expertise of the brokers has actually brought down the price of alternative energy.


POWERFUL CONCERNS
But many questions linger about this energy market. For example, what’s to make sure that somebody isn’t selling RECs to gullible ski area managers, then putting them into his or her dresser drawer and selling the ski area operator electricity produced at a coal-fired power plant? Coal-fired power is, in most cases, cheaper than electricity made from wind, and always cheaper than solar. The ski area operator in that case ends up with a green package and nothing inside.

This makes verification an important part of any plan for buying renewable energy. San Francisco-based Green-e, a non-profit group, audits transactions and tracks sales of RECs to make sure the electricity isn’t being double-sold or double-claimed. For example, Green-e certifies that renewable energy sold to meet mandated renewable energy requirements is not then also sold to voluntary buyers, like a ski area operator. But Green-e doesn’t certify all sales, and those that aren’t monitored . . .

In the absence of a formal government monitoring of the market, various regions of the United States are assembling tracking systems. For example, the Western Governors’ Association and the California Energy Commission are working collaboratively to develop a system for tracking renewable energy generation, RECs, and transactions. More than 340 stakeholders, including participants from 11 Western states and two Canadian provinces, have participated in the development process. That system is expected to be operational this year. At some point, these regional registries are expected to be connected.

In theory, there’s still room for abuse. But Crouse discounts any major shenanigans. “None that are so egregious that they are worth mentioning,” he says.

But absent national standards, it’s important to have as much transparency as possible, says Pat Nye, director of sales for the Bonneville Environmental Foundation’s Ski Green program. “There is a lot of skepticism out there, as this is a new industry. So it is possible for somebody to come out and do something to mislead the consumer.”


SEEDS OF SKEPTICISM
After getting lavish attention for its major purchase of RECs last year, Vail Resorts this year was prodded by Business Week, which wanted to know the price and the source of the wind being claimed by the company. It got no answers (although VR’s broker, Renewable Choices, vaguely told this reporter last summer of wind farms in the Dakotas and possibly Kansas). “This kind of secretiveness provokes skepticism,” concluded the magazine in a March 26 story that studied the broader issue of carbon offsets.

Some activists believe RECs are ineffectual in ramping up demand. Colorado resident Randy Udall, who helped create the original concept of RECs in 1997, argues stridently that RECs are failing to expand the wind-power infrastructure. “The key to financing a new wind farm is a long-term power purchase agreement with a utility,” he wrote on a blog last year. “Developers need to be assured of $50 to $70 a megawatt-hour for 20 years. Selling a REC for $4 a megawatt-hour from a wind farm built five years ago doesn’t move the needle.”

Bonneville’s Nye agrees, in part. Long-term commitments are important, he says, and he prefers to see five- to 10-year contracts. At least some of the most notable ski company contracts are for three years. Bonneville, which works with 21 ski area operators, also tries to ensure that some of the RECs it handles are earmarked for specific projects.

But Nye also believes uncommitted RECs play an important role in development of new energy sources. “The truth of it is that it really takes a lot of different components to make a project happen. It also takes a good wind site, institutional investors, and federal tax credits.” A developer, he says, must also assemble RECs to make new projects work. “If we remove that market, less risk will be taken, and less development will occur.”

Prices of RECs, says Nye, vary a great deal, from less than $1 for giant wind purchases in the West, to more than $100 for solar, which is more expensive. Locational demands can also increase the costs. The key point, says Nye, is that buyers should be aware of the broad range of potential beneficiaries.

While production of alternative energy has grown rapidly—a thirteenfold increase from 2001 to 2005, according to the National Renewable Energy Laboratory—expectations are also rising. And there’s only so much that RECs can do. They are “a piece of the solution, but certainly not a silver bullet,” says Susan Innis, green power marketing director for Western Resource Advocates. There are other significant steps that areas can take to reduce fossil fuel consumption. To put RECs in perspective, as some energy experts have put it, energy conservation vegetables should come before the dessert of alternative energy.