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Buying Power June 2020 Environmental Claims · Any errors in this paper or presentation are...
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Buying Power – June 2020 Environmental Claims
Transcript of Buying Power June 2020 Environmental Claims · Any errors in this paper or presentation are...
Buying Power – June 2020
Environmental Claims
Background
Background
100% Renewable or Zero Net Carbon
• External & Internal stakeholders imagine it is simple
• “Vexed” issue - (of a problem or issue) difficult and much
debated; problematic.
• Additionality is multi-faceted
• No simple black and white solution for all organisations
Corporate Renewable Activity
Action Comments
Greenpower The original
Large scale solar or wind PPA &
Renewables Retail (PPA) agreements
1. Retire LGCs2. Don’t Retire LGCs3. Retire later to meet target (eg. 2025)
LGC contracts • Solar Trams (Vic Gov)• NSW Gov (Dubbo Solar Farm)
Investment in solar & renewables • Rooftop solar• Utility Scale Solar (UQ, SCC, SMZ)• Can include battery storage, EV Charging
All shades of Green!
Environmental claim options
for PPAs
An indication of the public claims that are possible under the different surrendering options are:
a) With voluntary LGC surrender: “Organisation X now procures enough renewable energy to meet 100% of its annual demand and has reduced its emissions by [insert figure].”
b) Without LGC surrender: “Organisation X has signed a PPA with XXX solar/wind farm which will generate the equivalent amount of electricity as [insert figure] of Organisation X’s operational demand.”
c) With later LGC surrender: “Organisation X has signed a PPA with XXX solar farm, which will currently generate the equivalent amount of electricity as [insert figure] of Organisation X’s operational demand. The PPA is part of an on-going strategy to meet [insert renewable or carbon target e.g. 100 per cent renewable, net zero carbon] by [insert date].”
Organisations must ensure that any environmental claims made are not misleading to the public and the market. The Australian Competition and Consumer Commission (ACCC) has published guidance on green marketing and related claims.
Current Scope 2 Emissions
Rooftop Solar Efficiency Remaining Emissions
Offsite PPA
New Demand
How much to buy?
Overall Annual Electricity Use
20% RET Supply via
Retailer
Self Supply & 100%
Renewable
Plus Scope 1 & 3 emissions
100%? 80%?
120%?
130%?
How much to buy?
Important not to stop action
Business Case doesn’t stack up
Doesn’t reduce organisational
emissions
Renewable Energy Procurement
Onsell LGCs
Retire LGCs
More Information
www.businessrenewables.org.au
or contact:
Jonathan Prendergast, Technical Director
Carbon claims and Scope 2 emissionsAccounting for a decarbonizing grid
Business Renewables Centre 10th June 2020
© Six Capitals Consulting 2020
Disclaimer
• The information provided in these slides is general in nature and may not be applicable to your specific application
• Anyone intending to use the GHG Protocol to guide the development and reporting of a carbon emissions account is encouraged to carefully review the standard to ensure it supports the claims that they aim to make
• Health warning: Market based carbon accounting can do your head in
The work to determine a better way to account for emissions from scope 2 sources was originally supported by GPT Group and Stockland and now by members of the Property Council of Australia:
• Stockland
• AMP Capital
• Vicinity
• Cromwell
• GPT
• ISPT
With particular thanks to Davina Rooney, Frankie Muskovic and Steve Ford
Any errors in this paper or presentation are entirely the work of the presenter
Property sector: targets zero emissions & 100% renewables
2020 2030 20402025
• GPT Wholesale Office Fund
• City of Sydney (100% renewables)
• Lend Lease APPFC
• GPT• DEXUS• AMP Capital Wholesale Office Fund• Frasers Property (new)• CBUS• Vicinity
• Investa
Typical emissions profile
AMP Capital Wholesale Office Portfolio
Cbus Property Group
Commonwealth Bank of Australia
DEXUS
Frasers Property Australia
GPT Wholesale Office Fund
Local Government Super
Monash University
Nightingale Housing
Stockland Retirement Living and Logistics
Sydney Opera House
City of Melbourne
City of Sydney
Workplace6Pyrmont NSW
Certified net zero emissions by NABERS using the Climate Active (NCOS) Buildings Standard
8 Exhibition St
Melbourne
Certified net zero emissions by NABERS using the Climate Active (NCOS) Buildings Standard
zero emission buildings = efficient buildings powered by renewable energy
Sorting out scope 2 emissions:
• If the ACT, in 2020, purchases enough renewable energy for everyone in the territory does that make everyone’s scope 2 emissions zero ?
• If renewable energy in the grid is now at more than 20% do I still need to buy 100% GreenPower to have zero scope 2 emissions ?
• Is 1 MWh electricity = 1 tonne CO2e ?
• If I purchase an renewable energy certificate from South Australia (Emission Factor = 0.51 kg/kWh) and retire it against a property in Victoria (Emission Factor = 1.07 kg/kWh) how much carbon did I save ?
• Does the 20% Renewable Energy Target ensure that an equivalent amount of renewable energy is generated in every state ?
https://www.abc.net.au/news/2019-05-17/canberra-to-run-on-100-per-cent-renewables-from-october-1/11121676
http://www.lowcarbonlivingcrc.com.au/resources/crc-publications/crclcl-project-reports/calculating-market-based-emissions-intensity
Adopting the market based method
GHG Protocol Scope 2 guidance
Ref: GHG Protocol Scope 2 Guidance: World Resources Institute
Location based reporting
100% of supplyState Emission factor = 1.25 kgCO2/kWh*
* For illustration only
70% of supplyEmission factor = 1.25 kgCO2/kWh
20% of supply via RETEmission factor = 0 kgCO2/kWh
10% of supply via voluntary measuresEmission factor = 0 kgCO2/kWh
Average grid factor = 0.875 kgCO2/kWh
Residual mix factor= 1.25 kgCO2/kWh
Case study buildingbuys 50% GreenPower
Compare an example
Electricity source MWh Emission factor Emissions
Total consumption 100 0.875 87.5
Electricity source MWh Emission factor Emissions
Renewable energy target
20 0 0
GreenPower 50 0 0
Residual 30 1.25 37.5
Total consumption 100 37.5
Green building purchases 50%
GreenPower or retires equivalent
LGCs/RECs
Location based reporting
Market based reporting
50% GreenPower but 70% renewables
Residual mix emission factor
Ref: GHG Protocol Scope 2 Guidance: World Resources Institute
On site solar
Ref: GHG Protocol Scope 2 Guidance: World Resources Institute
Renewable energy target
9.4.1 Achieving 100 percent renewable energy when supplier quotas apply
• For utilities under a supplier quota requirement (such as an RPS in the US) structuring a green power product that covers 100 percent of a customer’s electricity load may combine voluntary and compliance instruments up to the level of the quota, provided those compliance instruments convey energy use claims. For example, if a utility is required to procure and deliver renewables for 20 percent of its total retail load, then voluntary contractual instruments would be required to account for the remaining 80 percent of the delivered energy
Ref: GHG Protocol Scope 2 Guidance: World Resources Institute
http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/the-renewable-power-percentage
ISO14064:2018
E2.2 Additional information
When using contractual instruments in the procurement of its electricity, an organisation may use the market based approach, provided the contractual instruments comply with the following quality criteria:
- convey the information associated with the unit of electricity delivered together with the characteristics of the generator;
- is ensured with a unique claim
- is tracked and redeemed , retired, or cancelled on behalf of the reporting entity
- is as close as possible to the period to which the contractual instrument is applied and comprises a corresponding timespan
- is produced within the country or within the market boundaries where consumption occurs if the grid is interconnected
Enhancing your renewable energy claim
• Generate renewable electricity onsite
• Contract directly with new renewable energy projects
• Work with electricity suppliers for new projects
• Contract with specific generators and promote the connection
• Establish “eligibility criteria” for corporate energy procurement, specific energy generation features or social benefits (ala GreenPowerTM)
• Consumers purchasing and retiring LGC’s are encouraged to use factual statements such as “100% renewable electricity purchased for this facility”
https://www.industry.gov.au/sites/default/files/2020-05/expert-panel-report-examining-additional-sources-of-low-cost-abatement.pdf
Conclusion
The market based method of accounting for scope 2 emissions, as defined in the GHG Protocol, provides a reliable method for reporting the acquisition of renewable electricity relying on the principles of:
• Robust system of certificates
• Auditable voluntary retirement of certificates
• Retirement that is in addition to mandatory renewable energy targets
• Unique claims
From Australian Competition and Consumer Protection:
“Firms which make environmental or ‘green’ claims should ensure that their claims are scientifically sound and appropriately substantiated.
Consumers are entitled to rely on any environmental claims you make and to expect these claims to be truthful.
Not only is this good business practice; it is law.”
www.accc.gov.au
Bruce Precious
Principal Consultant
0418 430 586
www.sixcapitalsconsulting.com.au
zero emission buildings= efficient buildings powered by renewable energy
