2020-03-03
Can I Green X with Certificate Y?
What can corporations learn from the Red Army when waging climate war?
This series of blog posts discusses the various aspects of using tradable energy attribute certificates to green the energy usage and reduce the carbon footprint. This post is the first in the series and introduces the topic.
Apart from saving energy and improving physical processes, companies can use energy certificates to become a greener. In some markets and sectors, this is easy. For example, if I want to tell my customers that I use green power in Finland and many other EU countries, I have two options: 1) buy green power from a power supplier, or 2) cancel guarantees of origin. In other cases, it becomes more complicated. For example, if I also want to use renewable heating/cooling, there are no guarantees of origin, neither are there regulations to support this claim.
District heating companies have green products available, but how do I know how green their products really are? If they sell green heat to me, can I be sure that they deduct this green consumption and savings in CO2 from their standard product? What if I have operations, e.g., in India and I want to use green power there? Should I use domestic green certificates, I-RECs, green PPAs, or just cancel European guarantees of origin relating to power consumption there? What would be the best option from the perspective of my customers, the authorities or environmental NGOs?
This blog series is my attempt at building a framework to evaluate different options. If you decide to stop reading here, just remember this: doing something is better than doing nothing! Use some certificates or choose an established service provider that you can trust. If you want to know more, continue reading and learn how to evaluate energy certification schemes in 3 dimensions: Uniqueness, Regulation and Additionality. Each of them will be covered in detail in the next instalments of this blog series but here is a sneak preview:
Marko Lehtovaara
I have spent the last 20 years studying, building and fixing energy certification systems in Europe and abroad. I have discussed the topic with leaders from the industry, politics and NGOs trying to advance energy certification by evangelizing, teaching, changing my mind and sometimes just praying. This blog is my attempts to share with you what I have learned along the way. You can find me on Linkedin as marko-lehtovaara or on twitter as @mlehtova.
Uniqueness
represents the degree of ownership of a production attribute. Certificate usually claim to carry a certain set of production attributes, such as original energy source or CO2 content, so the owner of the certificate should be the sole owner of these production attributes. The same underlying energy should not be sold as green, no other certificate should be issued for the same unit of production and the same attribute should not be included in averages and residual mixes that can legally, or by industry practice, be used to disclose the origin of energy to consumers.
Regulation can make a certification scheme more legitimate or totally ineffective, depending on how well it supports the certificates and how energy disclosure is defined. It is imperative to check 1) whether the use of certain certificates is permitted for disclosure, 2) how, if at all, energy origin is defined and 3) whether energy disclosure is mandatory. Even in the case of a governmental certification scheme, such as the EU Guarantee of Origin scheme, it is still advisable to evaluate the robustness of the regulation, by checking the loopholes for double counting, e.g., by verifying whether the certificates are the exclusive way provide evidence of energy origin and confirming the existence or status of a residual mix in the regulation.
Additionality: Do you remove a dent from the universe by cancelling this certificate? Will there be more production from renewable sources and less CO2 emitted? The question of additionality is far from being binary, rather it has at least 50 shades and the whole rainbow to choose from. We’ll come back to rainbows and greys later, but for now, it is sufficient just to consider the use of energy attribute certificates, in the same way as choosing between travelling by train or by plane. Both will depart regardless of your choice, but if large numbers travel by train, flights may be cancelled.
As mentioned previously, there will be more detailed posts on each dimension of URA (Uniqueness, Regulation and Additionality) in the coming weeks. So, what was it about the Red Army? Just listen to the traditional war cry of the Russian infantry for example in this You Tube video. I guess they want to emphasize additionality. Can’t blame them. And if that wasn’t far-fetched, just wait for the coming episodes.
