How to measure and report electricity consumption

Most companies need to report on their purchased electricity in order to be compliant with the Greenhouse Gas Protocol. This document outlines a guidance on how to calculate and report Scope 2 emissions based on Position Green’s best practice.

Approaches to account Scope 2

According to the GHG Protocol, companies must quantify and report Scope 2 emissions using both the location-based and market-based methods. This is also termed “dual reporting”. These methods show two perspectives of the same electricity grid and enable comparability.

Location-based method quantifies emissions based on average energy generation in a defined geographic location, normally a country, where the consumption takes place and includes renewable and fossil fuel energy. All electricity generated in a country will be aggregated and the emissions will be divided among all of the kilowatt-hours used by the consumers, so that all companies within the country use the same emission factor for the location-based calculation.

Market-based method quantifies emissions based on the emissions generated in a specific region under which the reporting company purchases electricity from specific suppliers. The origin of the electricity is tracked through Energy Attribute Certificates (EACs). If no certificates are purchased, the residual mix should be used which refers to the mix of electricity that is left when the renewable energy has been sold to specific companies through EACs.

Energy Attribute Certificate (EAC) and Cancellation Statement

EACs are used as documentation and represent unique ownership of one megawatt-hour of renewable energy to make zero emission claims for market-based calculations. Each EAC has associated project information that specifies where the electricity has been generated. In order to use EACs for disclosure purposes a valid EAC must be cancelled through a cancellation statement. By cancelling, an electricity supplier proves to the customers that the corresponding amount of energy has originated from renewable resources. This cancellation makes sure that a certain amount of energy can be counted as such only once. The register of an EAC is locally managed by specific national bodies and companies can buy them from an electricity supplier or a broker*.

There are different types of EACs depending on geographical location:

  • Renewable Energy Certificate (REC) in North America
  • Guarantee of Origin (GO) in Europe
  • International Renewable Energy Certificate (I-REC) for a number of countries in Asia, Africa, the Middle East and Latin America
  • National Systems, separate certificate systems for some single countries

Best Practice at Position Green

In Position Green, companies track their performance according to both location-based and market-based methods  – and this must be disclosed in the inventory. When companies add their emissions together as a total amount, they can choose one of the options for the main table and report the other data on the side.

For location-based calculations, the grid average emission factor for a country is used regardless of where the reporting company is located within the country. The total amount of kilowatt-hours is multiplied by the country specific grid average emission factor.

To calculate the market-based emissions, the approach depends on the EAC. If the EAC exists in the market and it is purchased by the company, the emission factor equals zero and the company needs to prove the purchased electricity by a cancellation statement (see Checklist for a valid renewable electricity claim). When companies operate in markets where EACs are available but decide not to buy them, the residual mix emission factor will be used for the calculations. In some cases, EACs are purchased only for parts of the year. For the remaining kilowatt-hours not covered by the EAC, a residual mix emission factor should be used to calculate the market-based emissions. Therefore, it can be a combination of using residual mix and having a zero emission factor. If a company operates in a country where EACs cannot be issued, the country specific grid average emission factor is used for market-based emissions. 

At Position Green, emission factors from AIB are used for companies purchasing electricity within Europe. For companies outside Europe, IEA is the main source used. We avoid calculating Scope 2 emissions with supplier-specific data, we rely on public sources, like AIB and IEA, to increase comparability.

For more detailed information, please read Scope 2 Guidance by the GHG Protocol.

Checklist for a valid renewable electricity claim

  • An EAC including the exact amount of renewable electricity purchased
  • Cancellation statement with company and project information

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