Scope 2 Accounting

Clarifying the treatment of green power instruments.


Background

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:

  • Attributes and Intended Uses
    • 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 (see below), approval for use by reporting or governmental program, appropriately matching vintage of instrument with annual scope 2 calculation, etc.
  • Double Counting
    • 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 consumers 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

Internationally-Applicable Guidelines

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. Final publication of the Guidelines is scheduled for Fall 2014.

If you are interested in learning more about the work or joining a Technical Working Group, please contact Mary Sotos at mary.sotos@wri.org.

Documents

Document Date Created
Public Comment Period  
GHG Protocol Scope 2 Guidance March 2014
Scope 2 Guidance Review Template March 2014
Working Documents for Technical Working Group  
December 2013 TWG on remaining technical questions Dec 2013
Summary of written TWG feedback from October 2013 webinars Nov 2013
Summary of October 2013 TWG webinars Oct 2013
Proposal No. 5 (Required Dual Reporting) October 2013 Oct 2013
Summary of June 2013 TWG webinars June 2013
Proposal No. 4 (Company Choice) June 2013 June 2013
Summary of February 2013 TWG webinars Feb 2013
Proposal No. 3 (Dual Reporting) Feb 2013 Feb 2013
Summary of December 2012 webinars Dec 2012
Background Information  
Objective/Background Document July 2012
Presentations  
CRS Renewable Energy Markets Conference Nov 2012
PCF World Forum Summit April 2012
RECs International Annual Market Meeting March 2012
CRS Renewable Energy Markets Conference Nov 2011
AWMA conference Nov 2011
Scoping Workshops  
(Mexico workshop) Agenda for Mexico Workshop May 2011
(Mexico workshop) Concept Note for Mexico Workshop – May 2011 May 2011
(London workshop) Brief Summary from London Workshop Jan 2011
(London workshop) Agenda for London Workshop Jan 2011
(London workshop) Slides from London Workshop Jan 2011
(London workshop) Concept Note for London Workshop Jan 2011
(DC workshop) Brief Summary of DC Workshop Dec 2010
(DC workshop) Agenda for DC Workshop Dec 2010
(DC workshop) Discussion Draft for DC Workshop Dec 2010

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