New report finds changing how large electricity buyers are incentivized and rewarded for buying clean energy could greatly increase their role in grid decarbonization
New system of greenhouse gas accounting and sustainability leadership recognition would promote deeper GHG reductions and clean energy deployment through electricity procurement
BOSTON — A new report authored by Green Strategies and The NorthBridge Group, supported by Clean Air Task Force, calls for modernizing the current accounting system for GHG emissions from electricity procurement to better account for and recognize carbon impacts. The report provides recommendations to improve transparency, maximize effectiveness, and to better account for buyer electricity procurement actions that reduce carbon emissions. The goal of these new proposals is to stimulate faster and more GHG reductions while creating a market for clean energy technologies.
Read the report: Modernizing How Electricity Buyers Account and are Recognized for Decarbonization Impact and Climate Leadership
“Current standards have been successful in advancing the deployment of wind and solar, but we need every clean energy tool available to decarbonize the global economy to address climate change,” said Armond Cohen, President at Clean Air Task Force. “Modernizing current GHG accounting standards – as recommended by this report – can stimulate emission reductions by galvanizing large electricity buyers, including the federal government and corporations, to procure carbon free electricity.”
“The current system of accounting and being recognized for clean energy procurement simply doesn’t reflect or recognize today’s standard for climate leadership, and it is failing to keep up with what’s needed to decarbonize our economy,” said Roger Ballentine, President of Green Strategies. “Companies want to lead and have a greater role in fighting climate change. But we have a system that no longer encourages and rewards the most impactful decisions companies can make in procuring clean energy. We need to fix that.”
The report highlights how current accounting methods do not always reflect a company’s continued reliance on unabated fossil fuels for their actual electricity supply or the actual climate benefit of procurement transactions. The proposed new approach would provide to stakeholders and the marketplace more accurate information about the emissions arising from a buyer’s electricity consumption and the carbon impact of their electricity procurement through:
- Modifications to Scope 2 accounting methods to more accurately measure the emissions of a buyer’s electricity consumption;
- Increased disclosure regarding the electric generation resources that a buyer relies on and procures from its suppliers;
- Provisions for buyers to discuss and estimate the avoided emissions and climate impact of their procurements and other buyer actions;
- Encouragement for buyers to consider how well carbon-free electricity supplies match the timing and location of their electricity consumption;
- Opportunities for buyers to highlight efforts to deploy emerging carbon-free electricity technologies (distinguishing between variable and firm resources) necessary for fully decarbonizing the electric grid.
According to the report, these changes would provide a strong foundation for large electricity buyers to support and be recognized for the electricity sector investments needed to achieve net-zero emission goals, including a broadened focus beyond only wind and solar resources — encouraging the deployment of a full suite of existing and emerging firm carbon-free generation, energy storage, load management, and other technologies needed to achieve a carbon-free electricity sector.
“Study after study has found that we must develop and commercialize an expanded suite of carbon-free technologies and other solutions to achieve full decarbonization of the electricity grid in a cost-effective and reliable manner, yet our current system of evaluating a buyer’s climate-related procurement actions doesn’t adequately stimulate the development of firm, carbon-free generation, energy storage and other resources needed to balance carbon-free supply with demand in all locations and at all times,” said Neil Fisher, Partner of The NorthBridge Group. “The changes proposed in this report would help point the climate ambitions of large electricity buyers — which are significant — at the right goal, actions that will reduce carbon emissions and encourage the development of resources needed to decarbonize the electricity grid.”
About Green Strategies, Inc.
Green Strategies is a clean energy and sustainability management consulting firm founded in 2001. Green Strategies has worked with some of the world’s largest companies, financial institutions, and leading innovative solution providers to help them align their business strategies with sustainability and decarbonization best practices. Green Strategies has pioneered the concept of “climate capitalism” – the notion that sustained business value creation and competitive advantage are best achieved by incorporating climate considerations and emissions mitigation into business and investment strategies.
About The NorthBridge Group
The NorthBridge Group is a leading economic and strategic consulting firm serving the electricity and natural gas sectors, including regulated utilities, competitive generators and energy suppliers, and other companies and organizations active in the energy space. The Firm’s clients include some of the largest utilities in the United States, players in the fast-changing competitive markets, climate policy organizations, and very large power users. The foundation of NorthBridge’s work is a combination of market insights, policy and regulatory expertise, perspectives on the energy transition, and rigorous analytic and economic skills. NorthBridge is a leader in formulating and evaluating investment and operational strategies to satisfy climate-related goals.
About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
