This article was originally published by BusinessGreen
Corporates will soon be able to purchase certificates geared at financing clean energy projects in off-grid communities, following the creation of a landmark distributed renewable energy platform by a clutch of financial institutions, corporate foundations, and clean energy and lighting specialists.
Climate finance specialist South Pole and fund manager Positive.Capital Partners are among the organisations behind the new initiative, which will allow corporates to support their sustainability goals by buying distributed renewable energy certificates (D-RECs) that help finance the development of small-scale clean energy projects in emerging economies - initiatives that have historically struggled to access to climate finance.
The first limited issuance of D-RECs is anticipated to be available from the final quarter of this year, according to the not-for-profit D-REC Initiative, which also comprises several philanthropies, including the Shell Foundation, the Good Energies Foundation, EnAccess Foundation, and Signify Foundation.
Patrick Burgi, director of innovation and cofounder of South Pole, said the creation of a new market for distributed renewable energy will help private companies deliver on their corporate sustainability ambitions while channelling investment to clean energy projects that can deliver significant emissions reductions while improving energy access for rural communities.
"With the D-REC platform, we're putting this transformational power in the hands of companies that want to push their renewable energy engagement to the next level," he said. "This is an opportunity to empower the private sector to bring us closer to achieving SDG7 [UN Sustainable Development Goal 7, for universal access to clean, affordable and reliable energy] and sustainable energy for all."
D-RECs will operate similarly to the standard renewable energy certificates already in broad circulation today, the D-Rec Initiative said. However, they will apply only be issued by distributed, small scale and off-grid renewables projects that are seeking to capture the associated social and environmental benefits from renewable energy, the group said.
"The private sector has been leading the energy transition in developed markets, driving the deployment of clean energy through investment and clean energy procurement activities," explained Paul Needham, managing director at Positive.Capital Partners. "The D-REC Initiative now provides global corporations and climate investors new tools to extend and accelerate the energy transition in emerging markets, delivering clean energy where it's needed most."