Electricity Emissions Accounting Principles to Drive Climate Action
December 13, 2022
The global scientific consensus is clear: the world needs to drastically reduce greenhouse gas (GHG) emissions to avoid the increasing threats of climate change. A key contributor to reducing global carbon emissions is ensuring the rapid decarbonization of the world’s electricity grids.
To this end, since 2010, corporations have voluntarily purchased over 110 GW of renewable energy, and are not slowing down. The release of the Scope 2 Guidance in 2015 coincided with significant growth of corporate voluntary procurement, and helped provide the investment certainty needed to expand renewable energy deployment. The Scope 2 Guidance has been foundational to corporate decarbonization strategies for electricity ever since.
As climate action has accelerated over the last decade, our organizations are ready to embrace an accounting framework that moves beyond the current approach of megawatt-hour matching, and focuses on the heart of the matter, emissions impact. It is important to update the accounting standards for corporate emissions to improve emissions accounting accuracy and ensure clean energy investments maximize electricity decarbonization. The signatory organizations provide the following objectives and principles for consideration to update electricity GHG emissions accounting systems to accelerate grid decarbonization.
In 2010, when renewable energy penetrations were much lower, new renewable energy purchases were likely to make meaningful GHG emissions reductions. Today, as global renewable penetration grows, partly thanks to corporate purchases, the generation mixes of individual electric grids are much more variable, resulting in carbon emissions that vary substantially based on time and location. In the face of growing emissions rate variability, and improved data which allows more sophisticated decision making, the importance of electricity users making decisions that maximize emissions reduction impact is now more important than ever.
Emissions accounting systems should evolve to prioritize decarbonization actions by:
Giving electricity users, and their stakeholders, the most accurate view of the emissions impact of electricity use possible. This will in turn allow electricity users to make clear, high impact, demand-side GHG emission reduction decisions in their businesses (e.g., operating on cleaner electric grids, investing in energy efficiency, electric load shifting, optimizing the dispatch of electric vehicle fleets).
Giving clean energy buyers the best data possible to maximize the emissions reduction impact of their investments – prioritizing action where and when it matters most.
Giving stakeholders confidence that emission reduction claims made by organizations are accurate and impactful.
Emissions Accounting Principles
1. Recognize that the emissions impact of a megawatt-hour of electricity consumption or generation varies based on time and location. Move accounting beyond megawatt-hour matching to focus on the quantified emissions impact of each activity.
2. Take a global view recognizing that all GHG emissions impact the atmosphere and value clean energy procurement targeted to locations with maximum decarbonization impact irrespective of grid or market boundaries.
Value Grid Decarbonization Progress
3. Ensure that corporate clean energy procurement and utility-supplied clean energy are both quantified and incorporated in accounting systems.
Incentivize Innovation in the Emissions Data Ecosystem
4. Accommodate and favor continual improvements in data quality and availability.
5. Maintain the integrity and accuracy of the underlying emissions accounting data by embracing transparency and third party verification.
6. As data and measurement complexity increases, ensure all organizations can continue accounting for and reporting on electricity emissions to their stakeholders.
7. Avoid penalizing clean energy procurement and planning already made by buyers under the current guidance through methodology changes that could disqualify, or significantly devalue, these projects and investments.
8. Ensure guidance is applicable to real world scenarios by providing fair and consistent accounting treatment for all clean electricity technologies in addition to renewable energy procurement.