GHGP scope 2 calculation training (Part 2).pdf
- 1. www.ghgprotocol.org 1. Introduction: Background on Scope 2 and the need for Guidance 2. Boundary: How do I determine what are my scope 2 emissions and how do I set my scope 2 boundary? 3. Background: What are “energy attribute certificates” like RECs? 4. Methods: What are the two scope 2 accounting methods? 5. Calculation: How do I calculate emissions based on both methods? 6. Requirements: What are the new accounting and reporting requirements? 7. Targets: How do I set reduction targets with the new methods and track emissions over time ? 8. Impact: How can I drive bigger impacts on new low-carbon projects that reduce emissions beyond BAU? 9. Examples: Calculation examples Outline
- 2. www.ghgprotocol.org • How to identify and calculate emissions • Where to find relevant emission factors • How to choose which emission factors are most appropriate for your inventory For further reading, see: GHG Protocol Scope 2 Guidance Chapter 6: Calculating Emissions. Learning objectives
- 3. www.ghgprotocol.org 1. Identify GHG emission sources for scope 2 emissions 2. Determine whether the market-based approach applies 3. Collect activity data and choose emission factors for each method 4. Calculate emissions 5. Roll up GHG emissions data to corporate level Steps to calculating emissions
- 4. www.ghgprotocol.org Scope 2 = Activity x Emission Emissions Data Factor (EF) MWh mt CO2e/ MWh How do I calculate scope 2 emissions? MWh Market-based Location-based For every MWh… Need an EF for each method. EF represents what’s generating on the grid EF derived from contractual information, applied on a MWh basis
- 5. www.ghgprotocol.org • Metered electricity consumption or utility bills specifying consumption in MWh or kWh • If not available, estimations may be used such as allocating an entire building’s electricity usage to all tenants on the basis of the reporter’s square footage and the building’s occupancy rate (called the Area Method). Activity data
- 6. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments?
- 7. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments? For location-based scope 2: calculate using grid average emission factor types in Table 6.2. If no You will report one scope 2, location- based method.
- 8. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments? You will report two scope 2 totals for the overall corporate inventory: one market-based and one location-based. For location-based scope 2: calculate using grid average emission factor types in Table 6.2. If yes If no You will report one scope 2, location- based method.
- 9. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments? You will report two scope 2 totals for the overall corporate inventory: one market-based and one location-based. For location-based scope 2: calculate using grid average emission factor types in Table 6.2. If yes If no If no For market-based scope 2: data that meet the Quality Criteria? You will report one scope 2, location- based method. Calculate using residual mix or location-based emission factors
- 10. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments? You will report two scope 2 totals for the overall corporate inventory: one market-based and one location-based. Calculate using residual mix or location-based emission factors Calculate using the emission factors derived from contractual instrument For location-based scope 2: calculate using grid average emission factor types in Table 6.2. If yes If no If yes If no For market-based scope 2: data that meet the Quality Criteria? You will report one scope 2, location- based method.
- 11. www.ghgprotocol.org FLOW CHART VISUAL? Are any of your energy-consuming facilities located in areas where grid customers can be provided with product or supplier-specific data in the form of contractual instruments? You will report two scope 2 totals for the overall corporate inventory: one market-based and one location-based. Calculate using residual mix or location-based emission factors Calculate using the emission factors derived from contractual instrument For location-based scope 2: calculate using grid average emission factor types in Table 6.2. If yes If no If yes If no For market-based scope 2: data that meet the Quality Criteria? You will report one scope 2, location- based method.
- 12. www.ghgprotocol.org 1. Multiply activity data from each operation by the emission factor for that activity for each applicable GHG. Some electricity emission factor sets may include emission rates for CO2, CH4 and N2O; others may only provide CO2 emission rates (see Box 7.1) 2. Multiply Global Warming Potential (GWP) values by the GHG emissions totals to calculate total emissions in CO2equivalent (CO2e). 3. Report final scope 2 by each method in metric tons of each GHG (where available) and in metric tons of CO2e. Match emission factors to each unit of electricity consumption
- 13. www.ghgprotocol.org Already in scope 1 Effectively, it’s already in scope 1 Effectively, it’s “grid” MWhs now, reported in scope 2
- 14. www.ghgprotocol.org Note: can’t apply certificates to source- specific consumption (e.g. no RECs for electricity portion of a CHP facility )
- 15. www.ghgprotocol.org Most of the training is on this grid- distributed scenario
- 16. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Regional or sub-national emission factors eGRID total output emission rates (US) Defra annual grid average emission factor (UK) National production emission factors IEA national electricity emission factors Location-based Method Emission Factor Hierarchy Data forms listed here should convey combustion-only (direct) GHG emission rates, expressed in metric tons per MWh or kWh.
- 17. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Regional or sub-national emission factors eGRID total output emission rates (US) Defra annual grid average emission factor (UK) National production emission factors IEA national electricity emission factors Location-based Method Emission Factor Hierarchy Data forms listed here should convey combustion-only (direct) GHG emission rates, expressed in metric tons per MWh or kWh.
- 18. www.ghgprotocol.org • Location-based is not supplier-specific. • Grid average emission factors do not factor out contractual purchases • Grid average emission factors are different from marginal grid emission factors – Spatial boundaries: Approximate regions of energy distribution and use, such as balancing areas. All generation and emissions data within this boundary should be aggregated and any net physical energy imports/exports and their related emissions should be taken into account. – Other data quality: Companies can evaluate emission factor data based on quality indicators including their reliability, completeness, and geographic, temporal, and technological representativeness. Guidance on location-based method emission factors
- 20. www.ghgprotocol.org Example location-based calculation Sites Annual Consumption eGRID subregion and EF1 LB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 669,230 California 500 MWh grid 652.72 CAMX 326,360 500 onsite leased solar (RECs retained) N/A source-specific 0 Indiana 500 MWh 1,386.55 RFCW 693,275 New York 100 MWh 140.31 NYUP 14,031 Florida 100 MWh 1,129.86 FRCC 112,986 Total 1,872,006 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 22. www.ghgprotocol.org Can I use the Clean Development Mechanism (CDM) country-published emission factors for the location-based method calculation? - No. These emission factors are designed for estimating emission reductions from renewable energy or energy efficiency carbon offset projects. They reflect the marginal emission rate on the grid, not the grid average emission rate required for scope 2 accounting. - In the absence of better information, stick with International Energy Agency national emission factors. Frequently Asked Question
- 23. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Electricity attribute certificates or equivalent instruments Renewable Energy Certificates (US, Canada, Australia and others) Generator Declarations (UK) for fuel mix disclosure Guarantees of Origin (EU) Any other certificate instruments meeting the Quality Criteria Contracts for electricity, such as power purchase agreements (PPAs ) • In the US, contracts for electricity from specified non-renewable sources like coal in regions other than NEPOOL and PJM Contracts that convey attributes to the entity consuming the power where certificates do not exist. Supplier/Utility emission rates Emission rate allocated and disclosed to retail electricity users Green energy tariffs Voluntary renewable electricity program or product Residual mix (sub-national or national) Calculated by EU country under RE-DISS project , Other grid-average emission factors (sub-national or national) – see location-based data eGRID total output emission rates (US). In many regions this approximates a consumption-boundary, as eGRID regions are drawn to minimize imports/exports Defra annual grid average emission factor (UK) IEA national electricity emission factors Market-based Method Emission Factor Hierarchy
- 24. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Electricity attribute certificates or equivalent instruments Renewable Energy Certificates (US, Canada, Australia and others) Generator Declarations (UK) for fuel mix disclosure Guarantees of Origin (EU) Any other certificate instruments meeting the Quality Criteria Contracts for electricity, such as power purchase agreements (PPAs ) • In the US, contracts for electricity from specified non-renewable sources like coal in regions other than NEPOOL and PJM Contracts that convey attributes to the entity consuming the power where certificates do not exist. Supplier/Utility emission rates Emission rate allocated and disclosed to retail electricity users Green energy tariffs Voluntary renewable electricity program or product Residual mix (sub-national or national) Calculated by EU country under RE-DISS project , Other grid-average emission factors (sub-national or national) – see location-based data eGRID total output emission rates (US). In many regions this approximates a consumption-boundary, as eGRID regions are drawn to minimize imports/exports Defra annual grid average emission factor (UK) IEA national electricity emission factors Market-based Method Emission Factor Hierarchy
- 25. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Electricity attribute certificates or equivalent instruments Renewable Energy Certificates (US, Canada, Australia and others) Generator Declarations (UK) for fuel mix disclosure Guarantees of Origin (EU) Any other certificate instruments meeting the Quality Criteria Contracts for electricity, such as power purchase agreements (PPAs ) • In the US, contracts for electricity from specified non-renewable sources like coal in regions other than NEPOOL and PJM Contracts that convey attributes to the entity consuming the power where certificates do not exist. Supplier/Utility emission rates Emission rate allocated and disclosed to retail electricity users Green energy tariffs Voluntary renewable electricity program or product Residual mix (sub-national or national) Calculated by EU country under RE-DISS project , Other grid-average emission factors (sub-national or national) – see location-based data eGRID total output emission rates (US). In many regions this approximates a consumption-boundary, as eGRID regions are drawn to minimize imports/exports Defra annual grid average emission factor (UK) IEA national electricity emission factors Market-based Method Emission Factor Hierarchy
- 26. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Electricity attribute certificates or equivalent instruments Renewable Energy Certificates (US, Canada, Australia and others) Generator Declarations (UK) for fuel mix disclosure Guarantees of Origin (EU) Any other certificate instruments meeting the Quality Criteria Contracts for electricity, such as power purchase agreements (PPAs ) • In the US, contracts for electricity from specified non-renewable sources like coal in regions other than NEPOOL and PJM Contracts that convey attributes to the entity consuming the power where certificates do not exist. Supplier/Utility emission rates Emission rate allocated and disclosed to retail electricity users Green energy tariffs Voluntary renewable electricity program or product Residual mix (sub-national or national) Calculated by EU country under RE-DISS project , Other grid-average emission factors (sub-national or national) – see location-based data eGRID total output emission rates (US). In many regions this approximates a consumption-boundary, as eGRID regions are drawn to minimize imports/exports Defra annual grid average emission factor (UK) IEA national electricity emission factors Market-based Method Emission Factor Hierarchy
- 27. www.ghgprotocol.org EMISSION FACTORS INDICATIVE EXAMPLES Electricity attribute certificates or equivalent instruments Renewable Energy Certificates (US, Canada, Australia and others) Generator Declarations (UK) for fuel mix disclosure Guarantees of Origin (EU) Any other certificate instruments meeting the Quality Criteria Contracts for electricity, such as power purchase agreements (PPAs ) • In the US, contracts for electricity from specified non-renewable sources like coal in regions other than NEPOOL and PJM Contracts that convey attributes to the entity consuming the power where certificates do not exist. Supplier/Utility emission rates Emission rate allocated and disclosed to retail electricity users Green energy tariffs Voluntary renewable electricity program or product Residual mix (sub-national or national) Calculated by EU country under RE-DISS project Other grid-average emission factors (sub-national or national) – see location-based data eGRID total output emission rates (US). In many regions this approximates a consumption-boundary, as eGRID regions are drawn to minimize imports/exports Defra annual grid average emission factor (UK) IEA national electricity emission factors Market-based Method Emission Factor Hierarchy
- 28. www.ghgprotocol.org What is a REC swap? How do I account for it? - Definition: where a company acts as an off-taker to a renewable energy project, entering into a power purchase agreement, but the RECs from the generation are sold to another party, typically a utility. The offtaker then buys unbundled “replacement” RECs so that a green power usage and scope 2 claim can still be made. - The scope 2 accounting looks at the replacement RECs. The sold RECs are out of the picture. - See Federal Trade Commission guidelines on how to describe renewable energy usage (e.g. can only refer to features of replacement RECs, not the power purchase agreement project). Frequently Asked Question
- 29. www.ghgprotocol.org Supplier emission factor disclosure ? Owned asset, purchased power Power purchase agreement or contract Supplier • An emissions factor/rate for every MWh supplied to customers • For energy generation that has certificates – must have + retire on behalf of customers • Unbundled certificates possible – must apply transparently to delivered energy (either for whole product or just green power program)
- 30. www.ghgprotocol.org Differentiated Products COAL NAT GAS Supplier Grid mix (un- defined) Generation sources Customers EF
- 31. www.ghgprotocol.org Differentiated Products COAL NAT GAS Supplier Grid mix (un- defined) Generation sources Customers Green power subscribers Standard offer EF
- 32. www.ghgprotocol.org Differentiated Products COAL NAT GAS Supplier Grid mix (un- defined) Generation sources Customers Green power subscribers Standard offer REC REC REC EF REC ?
- 33. www.ghgprotocol.org Differentiated Products COAL NAT GAS Supplier Grid mix (un- defined) Generation sources Customers Green power subscribers Standard offer REC REC REC EF REC ? 0 tons CO2e/MWh 0.5 tons CO2e/MWh
- 34. www.ghgprotocol.org Example market-based method calculation Sites Annual Consumption eGRID subregion and EF1 Contractual information? MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 750 lbs CO2e/MWh (utility emission factor) 750,000 California 500 MWh 652.72 CAMX Green pricing program for 100% of consumption 0 Indiana 500 MWh 1,386.55 RFCW 250 MWh RECs 346,638 New York 100 MWh 140.31 NYUP No information 14,031 Florida 100 MWh 1,129.86 FRCC 1,580 lbs CO2e/MWh (utility emission factor) 158,000 Total 0
- 35. www.ghgprotocol.org Why is it hard to get supplier specific factors? What amount of effort should I put in? - Possible reasons: - Suppliers lack knowledge of Scope 2 consumer requirements - Complex reporting for complex utility/holding company structures and multiple customer classes - Reporting overload: permitting, GHG reporting, EIA forms, state environmental labels/power source disclosure (usually only owned assets) - Staff turnover - Data acquisition should not overtake inventory process –other data available on the emission factor hierarchy. Frequently Asked Question
- 36. www.ghgprotocol.org • Definition: The mix of energy generation resources and associated attributes such as GHG emissions in a defined geographic boundary left after contractual instruments have been claimed/ retired/canceled. The residual mix can provide an emission factor for companies without contractual instruments to use in a market-based method calculation. Residual Mix Only available in EU currently
- 37. www.ghgprotocol.org • Definition: The mix of energy generation resources and associated attributes such as GHG emissions in a defined geographic boundary left after contractual instruments have been claimed/ retired/canceled. The residual mix can provide an emission factor for companies without contractual instruments to use in a market-based method calculation. Residual Mix Market boundary REC Generation Mix Generation Mix REC Unclaimed attributes Residual mix for a state or country = State or country generation mix (grid average factor) – sold attributes (e.g. RECs) + unclaimed attributes from other regions in the market boundary (in portion to sold attributes)
- 38. www.ghgprotocol.org • Guidance does not prescribe how to allocate certificates to consumption sites within a market boundary • Companies should clarify method they use • Example: One 100 MW wind project in Texas generates enough RECs for half of a company’s U.S. footprint (offices in five states). The company can decide how RECs are allocated to each office on a MWh basis. How to “apply” certificates if decentralized
- 39. www.ghgprotocol.org Why can’t we treat RECs like offsets, and deduct avoided emissions? • RECs are not offsets, do not convey tons avoided global emissions that can be deducted form the inventory. Secondary avoided emissions attribute can be reported separately for context. • Avoided emissions/”offset” approach would treat renewables differently from other labeled electricity. Not consistent with how suppliers calculate and disclose emissions. • Reductions approach more relevant for new and additional projects, not able to be consistently applied across scope 2. Would require time limit/eligibility decisions. Frequently Asked Question
- 40. www.ghgprotocol.org 1. Introduction: Background on Scope 2 and the need for Guidance 2. Boundary: How do I determine what are my scope 2 emissions and how do I set my scope 2 boundary? 3. Background: What are “energy attribute certificates” like RECs? 4. Methods: What are the two scope 2 accounting methods? 5. Calculation: How do I calculate emissions based on both methods? 6. Requirements: What are the new accounting and reporting requirements? 7. Targets: How do I set reduction targets with the new methods and track emissions over time ? 8. Impact: How can I drive bigger impacts on new low-carbon projects that reduce emissions beyond BAU? 9. Examples: Calculation examples Outline
- 41. www.ghgprotocol.org • Which information must reported in a GHG inventory • Which information may be reported optionally • Each market-based method Scope 2 Quality Criteria and how to apply it to contractual data For further reading, see: GHG Protocol Scope 2 Guidance Chapter 7: Accounting and Reporting Requirements and Chapter 8: Recommended Reporting on Instrument Features and Policy Context. Learning objectives
- 42. www.ghgprotocol.org For companies with operations only in markets without information or choice about electricity product or supplier No change. Only one scope 2 total will be reported based on the location-based method.
- 43. www.ghgprotocol.org For companies with operations in markets with information about their electricity product or supplier: 1. Dual reporting • Methodology disclosure • Method in base year • Method basis for goal setting 2. Scope 2 Quality Criteria 3. Recommended additional disclosures
- 44. www.ghgprotocol.org Country Location- Based Total (mtCO2e) Market- Based Total (mtCO2e) Instrument Types USA 650 0 RECs to cover 100% of consumption Norway 100 500 Residual mix China 800 800 N/A India 850 400 Collaborative solar PPA to cover 50% consumption Mexico 400 0 PPA to cover 100% of consumption TOTAL 2,800 mtCO2e 1,700 mtCO2e
- 45. www.ghgprotocol.org Contractual instruments shall: 1. Convey GHG information 2. Be an exclusive claim 3. Be retired 4. Match up to inventory period 5. Be sourced from same market as company Utility emission factors shall be: 6. Calculated based on delivered electricity Direct purchases shall: 7. Convey GHG claims to the purchaser Using any instruments requires: 8. Adjusted residual mix, or disclose its absence Scope 2 Quality Criteria (for market-based method)
- 46. www.ghgprotocol.org • Why this criteria? Scope 2 accounting requires emission rate (tons Co2e/MWh) so certificate must convey this. Ensures it is designed and intended for consumer claims. • If certificates do not specify attributes: Certificates that do not currently specify what, if any, energy attribute claims are conveyed, may still convey a claim implicitly through proving the second point: that no consumer is claiming the same energy generation attributes. Evidence of this may be achieved through attestations from each owner in the chain of custody or equivalent procedures providing the same information. • If the attribute emission rate itself is not specified and the technology is not zero emissions, the reporting organization should seek from the generating entity a specific emission rate from that generation facility. Otherwise, a default factor from IPCC or other government publications may be used and disclosed. Criteria 1: Conveying GHG emission rate attribute and claims
- 47. www.ghgprotocol.org Criteria 2: Unique claims • Why this criteria? Ensure no double counting in scope 2 across multiple instruments. • Where multiple instruments carry the GHG emission rate attribute claim, some jurisdictions or programs may require acquisition and “pairing” of the multiple certificates to support a voluntary consumer GHG emission rate claim.
- 48. www.ghgprotocol.org Criteria 3: Retirement for claims • Why this criteria? Ensure only consumers make a claim, even as instrument may change hands through trading. • Terminology: Retired/redeemed/claimed/canceled • Achieved through tracking system, audit of contracts, 3rd party certification, or other disclosure registries, systems or mechanisms.
- 49. www.ghgprotocol.org Criteria 4: Vintage • Why this criteria? Ensure temporal accuracy (as much as possible) in scope 2 accounting in market-based method. The generation on which the emission factors are based occurs close in time to the reporting period for which the certificates (or emissions) are claimed. • Date of energy generation from which the contractual instrument is • derived. (This is different from the age of the facility.) • Should be consistent with existing standards for the market where the contractual instruments exist.
- 50. www.ghgprotocol.org Criteria 4: Vintage • Why this criteria? Ensure temporal accuracy (as much as possible) in scope 2 accounting in market-based method. The generation on which the emission factors are based occurs close in time to the reporting period for which the certificates (or emissions) are claimed. • Date of energy generation from which the contractual instrument is • derived. (This is different from the age of the facility.) • Should be consistent with existing standards for the market where the contractual instruments exist.
- 51. www.ghgprotocol.org • Why this criteria? Ensure certificates are used as intended by electricity suppliers and regulators, and consumers direct demand to market reasonably linked to their usage. • Why limit it to a regional market? No globally liquid market for certificates, because no single electricity market. Boundary for usage should be “reasonable for an RE usage claim.” • Why not make it grid region? Definition of a tradable instrument already necessitates a separation from “physical” flows, so any further restrictions would simply be policy/program choices rather than “inherent accounting” restrictions. • If the market boundary is not specified or not clear: • Assume political (country) or regulatory boundaries, not just physical interconnection. Over time can be group of countries that recognize each other’s certificates as fungible and available to any consumers located therein, and create common tracking system and residual mix. Criteria 5: Market Boundary
- 52. www.ghgprotocol.org • US as single market - United by overarching federal laws (FERC) despite state regulation of sector - Argument to provide flexibility in sourcing, build RE where most cost-effective
- 53. www.ghgprotocol.org • “Internal/Common market” - Electricity is a product, and trading of electricity and its attributes should be permitted throughout EU and EEA (EFTA) - Legal cases on “discriminating against non-national production”
- 54. www.ghgprotocol.org Why can’t we apply a certificate from one country to another? What if there are no certificates/contracts/supplier programs available in the countries where I have operations? • Goal is to address company’s electricity emissions where they occur. • Markets take time to develop. Electricity consumers demanding disclosure, tracking and procurement options can help build market, change supply and reduce emissions over time. • In the meantime, use other scope 2 emission factor sources. Frequently Asked Question
- 55. www.ghgprotocol.org 1. Annual electricity consumption (in kWh, MWh, BTU, etc.) 2. Method basis for upstream scope 3 3. Instrument features 4. Other instrument retirement 5. Role of corporate procurement in driving Recommended reporting (1 of 2)
- 56. www.ghgprotocol.org To distinguish differences in purchases between markets, and enhance transparency, Guidance recommends disclosing: • Instrument labels • Power plant features – resource type, facility location, facility age • Policy context – Supplier quotas like RPS? – Cap and trade? – Funding/subsidy receipt? Recommended reporting (2 of 2)
- 57. www.ghgprotocol.org 1. Scope 2 totals disaggregated by country 2. Avoided emissions estimation 3. Advanced grid study estimation 4. Scope 2 results calculated by other methods 5. Purchases that did not meet S2 Quality Criteria Optional reporting
- 58. www.ghgprotocol.org 1. Introduction: Background on Scope 2 and the need for Guidance 2. Boundary: How do I determine what are my scope 2 emissions and how do I set my scope 2 boundary? 3. Background: What are “energy attribute certificates” like RECs? 4. Methods: What are the two scope 2 accounting methods? 5. Calculation: How do I calculate emissions based on both methods? 6. Requirements: What are the new accounting and reporting requirements? 7. Targets: How do I set reduction targets with the new methods and track emissions over time ? 8. Impact: How can I drive bigger impacts on new low-carbon projects that reduce emissions beyond BAU? 9. Examples: Calculation examples Outline
- 59. www.ghgprotocol.org • How to assess your company’s emissions trends • How to choose a base year • How to clarify whether reduction targets reflect market-based method results, location-based method results, or both • When you may need to re-calculate base year emissions For further reading, see: GHG Protocol Scope 2 Guidance Chapter 9: Setting Reduction Targets and Tracking Emissions over Time. Learning objectives
- 60. www.ghgprotocol.org • Companies that have already set a base year for scope 2 shall specify which method was used to calculate it, in order to allow for clearer comparison over time. • For companies calculating a GHG inventory for the first time, the Corporate Standard guidance on choosing a base year applies (see Chapter 5 of the Corporate Standard). Selecting a base year
- 61. www.ghgprotocol.org • This guidance’s new requirement to report scope 2 according to two different methodologies—location-based and market-based—constitutes a change that could trigger base-year recalculation. • Companies should ensure that the base-year inventory includes both a location-based and market-based scope 2 total, if applicable and feasible. This ensures “like with like” comparison over time. • For most companies, location-based data was used in the base year and market-based contractual information was not likely available. Therefore, recalculation would only entail disclosing that the market-based figure for the base year is the same as location-based (using ‘proxy data’). Recalculating base year
- 62. www.ghgprotocol.org • If setting a target, companies shall specify which method is used in the goal calculation and progress tracking. • Two targets, one for each method’s results, can help prioritize new low-carbon energy projects that will reduce both totals’ emissions over time (if contractual instruments are retained from the project). • Renewable energy sourcing targets should follow market-based methodology – no double counting location-based levels of RE and certificates. • Supplier-specific emission factors and RE product disclosure typically includes RE sourced to meet quota (e.g. RPS in US), and forms a portion of all customers’ electricity. Programs recognizing corporate leadership differ as to how this is counted towards corporate targets. Targets
- 63. www.ghgprotocol.org 1. Introduction: Background on Scope 2 and the need for Guidance 2. Boundary: How do I determine what are my scope 2 emissions and how do I set my scope 2 boundary? 3. Background: What are “energy attribute certificates” like RECs? 4. Methods: What are the two scope 2 accounting methods? 5. Calculation: How do I calculate emissions based on both methods? 6. Requirements: What are the new accounting and reporting requirements? 7. Targets: How do I set reduction targets with the new methods and track emissions over time ? 8. Impact: How can I drive bigger impacts on new low-carbon projects that reduce emissions beyond BAU? 9. Examples: Calculation examples Outline
- 64. www.ghgprotocol.org • The difference between corporate accounting and project-level accounting • The term “additionality” in offset accounting and its application to energy accounting in scope 2 • Different ways to achieve impact For further reading, see: GHG Protocol Scope 2 Guidance Chapter 11: How Companies can drive Electricity Supply Changes over Time with the Market-Based Method. Learning objectives
- 65. www.ghgprotocol.org • Definition: A criterion often applied to GHG project activities, stipulating that project-based GHG reductions should only be quantified if the project activity “would not have happened anyway”—i.e., that the project activity (or the same technologies or practices that it employs) would not have been implemented in its baseline scenario. • Why not require? – The market-based method for scope 2 accounting applies to all energy generation in a defined grid, not just “low-carbon” or renewable energy from projects supported by a specific company’s financial support. – Suppliers and companies can make energy procurement choices that can shift a company’s impact from “aggregate” to more directly spurring an increase in new, low-carbon energy generation facilities in a short period of time, consistent with the ambition needed to avoid dangerous climate change. Concept of Additionality
- 66. www.ghgprotocol.org Corporate accounting vs. consequential (project-level) accounting
- 67. www.ghgprotocol.org • Contributing to aggregate demand over long-term Spectrum of impact • New low-carbon generation you helped come online this year Period of Time (Short to Long) Attribution (Direct to aggregate) • Supplier green tariff subscription from existing facilities, will build more if more demand
- 68. www.ghgprotocol.org 1. Contract directly with new low-carbon energy projects 2. Work with electricity suppliers for new projects 3. Establish “eligibility criteria” for corporate procurement 4. Provide incremental funding or donations Jurisdictional policy Certification schemes Utility/ supplier labels Corporate policy and decisions Choices by all players in the market can have an impact Companies can: WRI papers on Additionality and policy interactions (like Clean Power Plan) coming in Fall/Winter 2016-2017
- 69. www.ghgprotocol.org 1. Introduction: Background on Scope 2 and the need for Guidance 2. Boundary: How do I determine what are my scope 2 emissions and how do I set my scope 2 boundary? 3. Background: What are “energy attribute certificates” like RECs? 4. Methods: What are the two scope 2 accounting methods? 5. Calculation: How do I calculate emissions based on both methods? 6. Requirements: What are the new accounting and reporting requirements? 7. Targets: How do I set reduction targets with the new methods and track emissions over time ? 8. Impact: How can I drive bigger impacts on new low-carbon projects that reduce emissions beyond BAU? 9. Examples: Calculation examples Outline
- 70. www.ghgprotocol.org Example 1. No U.S. contractual purchases or information at all Level: Easier Sites Annual Consumption eGRID subregion and EF1 Contractual information ? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP None, no residual mix California 500 MWh 652.72 CAMX “ Indiana 500 MWh 1,386.55 RFCW “ New York 100 MWh 140.31 NYUP “ Florida 100 MWh 1,129.86 FRCC “ Total 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 71. www.ghgprotocol.org Example 1. No U.S. contractual purchases or information at all Level: Easier Sites Annual Consumption eGRID subregion and EF1 Contractual information ? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP None, no residual mix 669,230 California 500 MWh 652.72 CAMX “ 326,360 Indiana 500 MWh 1,386.55 RFCW “ 693,275 New York 100 MWh 140.31 NYUP “ 14,031 Florida 100 MWh 1,129.86 FRCC “ 112,986 Total 1,815,882 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 72. www.ghgprotocol.org Example 1. No U.S. contractual purchases or information at all Level: Easier Sites Annual Consumption eGRID subregion and EF1 Contractual information ? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP None, no residual mix 669,230 669,230 California 500 MWh 652.72 CAMX “ 326,360 326,360 Indiana 500 MWh 1,386.55 RFCW “ 693,275 693,275 New York 100 MWh 140.31 NYUP “ 14,031 14,031 Florida 100 MWh 1,129.86 FRCC “ 112,986 112,986 Total 1,815,882 1,815,882 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 73. www.ghgprotocol.org Example 2. RECs to match all U.S. consumption Level: Easier Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 1,000 MWh RECs @ 0 lbs CO2e/MWh 669,230 California 500 MWh 652.72 CAMX 1,000 MWh RECs @ 0 lbs CO2e/MWh 326,360 Indiana 500 MWh 1,386.55 RFCW 500 MWh RECs @ 0 lbs CO2e/MWh 693,275 New York 100 MWh 140.31 NYUP 100 MWh RECs @ 0 lbs CO2e/MWh 14,031 Florida 100 MWh 1,129.86 FRCC 100 MWh RECs @ 0 lbs CO2e/MWh 112,986 Total 1,815,882 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 74. www.ghgprotocol.org Example 2. RECs to match all U.S. consumption Level: Easier Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 1,000 MWh RECs @ 0 lbs CO2e/MWh 669,230 0 California 500 MWh 652.72 CAMX 1,000 MWh RECs @ 0 lbs CO2e/MWh 326,360 0 Indiana 500 MWh 1,386.55 RFCW 500 MWh RECs @ 0 lbs CO2e/MWh 693,275 0 New York 100 MWh 140.31 NYUP 100 MWh RECs @ 0 lbs CO2e/MWh 14,031 0 Florida 100 MWh 1,129.86 FRCC 100 MWh RECs @ 0 lbs CO2e/MWh 112,986 0 Total 1,815,882 0 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory.
- 75. www.ghgprotocol.org Example 3. 1,000 MWhs RECs purchased Level: Moderate Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 669,230 California 500 MWh 652.72 CAMX 326,360 Indiana 500 MWh 1,386.55 RFCW 693,275 New York 100 MWh 140.31 NYUP 14,031 Florida 100 MWh 1,129.86 FRCC 112,986 Total 1,815,882 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. Allocation to sites is up to you!
- 76. www.ghgprotocol.org Example 3. 1,000 MWhs RECs purchased Level: Moderate Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 1,000 MWh RECs 669,230 0 California 500 MWh 652.72 CAMX No information 326,360 326,360 Indiana 500 MWh 1,386.55 RFCW No information 693,275 693,275 New York 100 MWh 140.31 NYUP No information 14,031 14,031 Florida 100 MWh 1,129.86 FRCC No information 112,986 112,986 Total 1,815,882 1,146,652 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. Allocation to sites is up to you! – All allocated to Nevada site
- 77. www.ghgprotocol.org Example 3. 1,000 MWhs RECs purchased Level: Moderate Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP No information 669,230 669,230 California 500 MWh 652.72 CAMX 300 MWh RECs (200 MWhs with no information) 326,360 130,544 Indiana 500 MWh 1,386.55 RFCW 500 MWh RECs 693,275 0 New York 100 MWh 140.31 NYUP 100 MWh RECs 14,031 0 Florida 100 MWh 1,129.86 FRCC 100 MWh RECs 112,986 0 Total 1,815,882 912,760 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. Allocation to sites is up to you! – allocated to multiple sites
- 78. www.ghgprotocol.org Example 4. Partial supplier specific information Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 750 lbs CO2e/MWh (utility emission factor) 669,230 California 500 MWh 652.72 CAMX Green pricing program for 100% of consumption 326,360 Indiana 500 MWh 1,386.55 RFCW 250 MWh RECs 693,275 New York 100 MWh 140.31 NYUP No information 14,031 Florida 100 MWh 1,129.86 FRCC 1,580 lbs CO2e/MWh (utility emission factor) 112,986 Total 1,815,882 0 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. Level: Moderate
- 79. www.ghgprotocol.org Example 4. Partial supplier specific information Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e Nevada 1,000 MWh 669.23 NWPP 750 lbs CO2e/MWh (utility emission factor) 669,230 750,000 California 500 MWh 652.72 CAMX Green pricing program for 100% of consumption 326,360 0 Indiana 500 MWh 1,386.55 RFCW 250 MWh RECs 693,275 346,638 New York 100 MWh 140.31 NYUP No information 14,031 14,031 Florida 100 MWh 1,129.86 FRCC 1,580 lbs CO2e/MWh (utility emission factor) 112,986 158,000 Total 1,815,882 1,268,669 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. Level: Moderate
- 80. www.ghgprotocol.org Example 5. Asia Pacific Sites Sites Annual Consumption National EF1 Contractual information? LB in tons CO2e MB in tons CO2e Japan 1,000 MWh 0.55 Supplier specific factor, 0.45 tCO2e/MWh Australia 500 MWh 0.79 green power program for 100% consumption India A 500 MWh 0.82 Wind contract for 50% consumption India B 100 MWh 0.82 No information India C 100 MWh 0.82 No information Total 1. International Energy Agency, reported here in tonnes CO2e/mWh Level: Moderate
- 81. www.ghgprotocol.org Example 5. Asia Pacific Sites Sites Annual Consumption National EF1 Contractual information? LB in tons CO2e MB in tons CO2e Japan 1,000 MWh 0.55 Supplier specific factor, 0.45 tCO2e/MWh 550 Australia 500 MWh 0.79 green power program for 100% consumption 395 India A 500 MWh 0.82 Wind contract for 50% consumption 410 India B 100 MWh 0.82 No information 82 India C 100 MWh 0.82 No information 82 Total 1,519 1. International Energy Agency, reported here in tonnes CO2e/mWh Level: Moderate
- 82. www.ghgprotocol.org Example 5. Asia Pacific Sites Sites Annual Consumption National EF1 Contractual information? LB in tons CO2e MB in tons CO2e Japan 1,000 MWh 0.55 Supplier specific factor, 0.45 tCO2e/MWh 550 450 Australia 500 MWh 0.79 green power program for 100% consumption 395 0 India A 500 MWh 0.82 Wind contract for 50% consumption 410 205 India B 100 MWh 0.82 No information 82 82 India C 100 MWh 0.82 No information 82 82 Total 1,519 819 1. International Energy Agency, reported here in tonnes CO2e/mWh Level: Moderate
- 83. www.ghgprotocol.org Example 6. U.S. onsite/Off-site combination Level: Difficult Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e California Site A 100 MWh electricity from CHP2 N/A for eGRID – source specific is 600 lbs CO2e/MWh Source specific is 600 lbs CO2e/MWh California Site B 100 MWh onsite leased solar consumption with REC retention N/A, onsite source-specific N/A, onsite source- specific 100 MWh grid consumption 652.72 CAMX 100 MWh REC purchase New Jersey 100 MWh onsite leased solar consumption with REC sales 862.86 RFCE REC sales, treat as grid delivered – no additional contractual information Total 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. 2. CHP owned/operated by outside organization. Only consuming electricity output.
- 84. www.ghgprotocol.org Example 6. U.S. onsite/Off-site combination Level: Difficult Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e California Site A 100 MWh electricity from CHP2 N/A for eGRID – source specific is 600 lbs CO2e/MWh Source specific is 600 lbs CO2e/MWh 60,000 California Site B 100 MWh onsite leased solar consumption with REC retention N/A, onsite source-specific N/A, onsite source- specific 0 100 MWh grid consumption 652.72 CAMX 100 MWh outside REC purchase 65,272 New Jersey 100 MWh onsite leased solar consumption with REC sales 862.86 RFCE REC sales, treat as grid delivered – no additional contractual information 86,286 Total 211,558 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. 2. CHP owned/operated by outside organization. Only consuming electricity output.
- 85. www.ghgprotocol.org Example 6. U.S. onsite/Off-site combination Level: Difficult Sites Annual Consumption eGRID subregion and EF1 Contractual information? LB in lbs CO2e MB in lbs CO2e California Site A 100 MWh electricity from CHP2 N/A for eGRID – source specific is 600 lbs CO2e/MWh Source specific is 600 lbs CO2e/MWh 60,000 60,000 California Site B 100 MWh onsite leased solar consumption with REC retention N/A, onsite source-specific N/A, onsite source- specific 0 0 100 MWh grid consumption 652.72 CAMX 100 MWh outside REC purchase 65,272 0 New Jersey 100 MWh onsite leased solar consumption with REC sales 862.86 RFCE REC sales, treat as grid delivered – no additional contractual information 86,286 86,286 Total 211,558 146,286 1. EGRID 2012, reported here in lbs CO2e/MWh only, for simplicity. Full reporting by gas, and in metric tons, required for complete inventory. 2. CHP owned/operated by outside organization. Only consuming electricity output.
- 86. www.ghgprotocol.org • Download the Guidance, Executive Summary, other materials at: http://www.ghgprotocol.org/scope_2_gui dance Thanks! Mary Sotos Mary.sotos@wri.org 202-729-7627