For most companies, emissions associated with electricity consumption (scope 2) represent a significant portion of the total GHG inventory. While companies can take action to reduce energy consumption through energy conservation and efficiency improvements, much potential lies in reducing the emissions associated with the underlying source of energy production. For some companies operating on fossil-fueled energy grids, this has meant installing on-site renewable energy and consuming the zero-emissions output, thereby lowering the MWh’s purchased from the grid. But many energy markets around the world provide opportunities to select suppliers with renewable energy offerings, or to purchase the rights and benefits of renewable energy independent of commodity electricity.
GHG accounting issues for purchased energy products
The variety of green power products available internationally reflects a diversity of national/regional electricity policies and voluntary approaches: within this range of choices, organizations have sought clarity regarding the GHG impact of different renewable energy products. Some of issues include:
- Identifying the emissions attributes contained in renewable energy instruments and purchasing mechanisms
- Identify intended uses of instrument, including as: means of impacting emissions calculation in end-user scope 2 inventories; mechanism for energy supplier disclosure; tracking instrument for supplier quotas, etc.
Quality Assurance of Renewable Energy Instruments
- Identifying requirements for renewable energy purchasing mechanisms such as clear statement of attributes, prevention of double counting, approval for use by reporting or governmental program, appropriately matching vintage of instrument with annual scope 2 calculation, etc.
- Preventing explicit double counting of emission attributes through use of certificate registries and tracking systems
- Preventing implicit double counting of emission attributes through adjustment of other calculation sources and mechanisms used in scope 2 accounting
- Identifying best practices for treatment of “null power” where certificates have been sold from generation
Overlapping Power Sector Policies
- Surveying regional approaches to accounting for renewable energy purchasing within an emissions- capped power sector
Additionality and Eligibility
- Identifying the range of reporting program and consumer’s expectations about the full environmental and market impacts of renewable energy purchasing mechanisms and their ability to drive new renewable development
- Distinguishing these expectations from the core criteria necessary
Calculation and Reporting
- Identifying appropriate calculation and reporting procedures for reflecting renewable energy attribute ownership in scope 2 of a GHG inventory
To answer the questions listed above and harmonize GHG accounting practices worldwide, the GHG Protocol has begun a process to develop Power Accounting Guidelines. These Guidelines are primarily designed to assist organizations preparing corporate inventories and mitigation strategies. Voluntary and mandatory GHG programs using GHG Protocol reporting standards can also integrate these Guidelines into the reporting practices for scope 2. The Guidelines will consist of internationally-relevant principles from the stakeholder development process with attention on how those principles apply to specific renewable energy purchasing products and certificates in different regions throughout the world.
Development Process and Timeline
The GHG Protocol began investigating these questions through initial scoping roundtables in December 2010 with energy experts in Washington DC, London, and Mexico City. Technical Working Groups have formed around specific issue areas, and are currently developing drafts which will be available for public comment. Final publication of the Guidelines is scheduled for February 2014. Relevant details and timelines available here.