The TREC mechanism is essentially a ‘source-of-origin’ certification process for energy (usually electricity) which allows the market to differentiate electricity service offerings. It enables customers to choose between electricity which is generated from different sources of primary energy (renewable or non-renewable) and in different specific locations.

One TREC represents 1MWh of Green Power, which is roughly equivalent to the electricity consumption of a typical middle income suburban home in South Africa, and it is sold separately by GreenX Energy in addition to the actual (undifferentiated) electrons which are sold by the local electricity supplier. Because the TREC mechanism is essentially a certification process it does not require any hardware investments or changes on a customer’s premises or operations. TREC contracts are transferrable and flexible in terms of volume, term of commitment and energy mix profile.

The TRECs are issued, registered and redeemed within an established independent regulatory framework which is currently being formalized by the Department of Minerals and Energy as a mechanism for trading energy derived from renewable sources (biomass, hydro, wind, solar, wave, geothermal energy) and stimulating the transformation of the South African energy economy to a more sustainable mix of generation systems.