‘The pace of growth is breaking us’: Utilities, corporations grapple with grid decarbonization

The Nature Conservancy

Power with Purpose, A Framework

Bringing Solar to the U.S. South

Why BU Looked Beyond New England for Its First Wind Power Purchase

Emissionality and the Pursuit of Green Steel

Embedding Environmental Impact in Renewables Procurement

WattTime and its partners celebrate one billion watts of emissionality as more renewable energy buyers prioritize avoided emissions impacts

More renewable energy buyers than ever before are intentionally siting wind and solar projects in locations where they will push more dirty energy off the grid.

Oakland, Calif. — 14 September 2023 — Environmental tech nonprofit WattTime today announced that at least one billion watts of renewable energy have now been procured through an emissionality-based approach. In other words, these wind and solar projects have been selected based partially on their potential to avoid more emissions due to their location and the emissions intensity of the power grid in that region. 

“Clean energy projects only reduce emissions by replacing fossil fuel plants, and siting them in particularly high-emitting, fossil fuel-heavy regions can greatly amplify their climate benefits by pushing dirtier sources of electricity off the grid,” said Gavin McCormick, founder and executive director of WattTime. “That’s the power of emissionality — a simple approach that can result in bigger benefits for the planet.” 

This billion watt milestone is based on WattTime’s analysis of both publicly available and additional confidential market information. Partners of the organization which have publicly listed emissionality as part of their renewable energy procurement strategy include SalesforceNucorBoston UniversityClearloop, Rivian, and others. 

Most recently, Rivian and The Nature Conservancy partnered with Brightnight on a project which will transform a Kentucky coal mine into an 800-megawatt solar facility. The site was selected, in part, through an emissionality lens to ensure a heftier decarbonization effect for the grid. 

"In July, Rivian announced a partnership with BrightNight and The Nature Conservancy to be the largest offtaker (100MW) of solar power from phase 1 of the Starfire project in Kentucky — soon to be built at the site of what was once one of the largest coal mines in the US,” said Andrew Peterman, director of renewable energy at Rivian. “We worked closely with The Nature Conservancy to develop a rigorous evaluation framework and set of resources (Power with Purpose) to help select renewable energy projects that prioritize positive benefits for climate, conservation, and communities. WattTime’s analysis and input allowed us to integrate an emissionality-based approach and ensure we were maximizing the climate benefits of our decision.”

Thanks to emissionality, the 14 wind and solar projects included in WattTime’s billion watt milestone will reduce an estimated 10 million tonnes more emissions than they otherwise would have. All of the renewable energy sites included in the analysis are located in coal-heavy regions in the US or overseas. 

“It took years of work with like-minded partners to reach a billion watts of emissionality, but we are now seeing a dramatic acceleration. We estimate the next billion watts may happen in mere months, now that momentum is building at what seems to be an exponential pace and other buyers are catching on,” said McCormick.   

“As a longtime partner of WattTime, together we’ve pioneered the importance of making sure renewable energy projects get more done when it comes to tackling carbon emissions,” said Laura Zapata, CEO and co-founder of Clearloop. “At Clearloop, we’re fully focused on finding innovative ways to fund and launch new solar projects where they can do the most good — both by cleaning up the grid and expanding access to clean energy, as well as investing in underserved American communities. With support from WattTime, we’ve built Clearloop to help organizations of all sizes embrace emissionality as a key grid decarbonization solution.” 

white paper originally drafted in 2009 by Meredith Fowlie at UC Berkeley first floated the concept that one could, in theory, detect where building renewable energy would reduce more emissions, and then deliberately select these locations. McCormick and the WattTime team built on this theory and coined the term emissionality in 2017. 

Today, WattTime works with institutions of all kinds to support them in selecting more impactful projects, whether by providing avoided emissions analysis, connecting them with like-minded groups, or otherwise assisting them in their sustainability efforts. WattTime’s analyses are based on marginal emissions data, which assess the real-world impacts of consuming or generating power at a specific time and location. 

Today’s billion watt milestone includes only projects that evaluated avoided emissions with WattTime data — the details of which were readily available to the analysis team. But WattTime would like to hear about (and celebrate) other renewable energy projects with locations that were chosen because they avoided more emissions.  

To share information about your projects, learn more about emissionality, or discuss renewable energy project selection support, contact the WattTime team here

###

About WattTime

WattTime is an environmental tech nonprofit that empowers all people, companies, policymakers, and countries to slash emissions and choose cleaner energy. Founded by UC Berkeley researchers, we develop data-driven tools and policies that increase environmental and social good. During the energy transition from a fossil-fueled past to a zero-carbon future, WattTime ‘bends the curve’ of emissions reductions to realize deeper, faster benefits for people and planet. Learn more at www.WattTime.org

You can't avoid emissions without additionality

To beat climate change, humanity needs to massively expand the global supply of renewable electricity to rapidly wean our power grids off existing fossil-fueled power plants. Here at WattTime, our goal is to support and cheer on anyone aiming to build those renewables in ways that drive more impact, faster. We call this “emissionality.”

We’re perhaps best known for pointing out that you can drive more impact by building new renewables in areas where each new clean kilowatt-hour replaces a greater amount of dirty fossil-fueled marginal emissions. But we recently received a gentle critique that we think is a good and fair point: why has WattTime never said much about additionality? 

After all, using data to invest in and build renewables where there are higher marginal emissions rates doesn’t much matter if you’re not building new renewable capacity in the first place. Which is the main thrust of additionality. You can’t avoid emissions without additionality.

Using emissions data can help multiply the beneficial impacts of building new renewables via an emissionality approach, but it’s nothing without the additionality foundation. In the absence of additionality, quantifying avoided emissions amounts to multiplying by zero. Additionality is a key part of emissionality, and the former is more important than ever in 2023.

GHG Accounting and Impact Are Misaligned

Scope 2 of the Greenhouse Gas Protocol (GHG Protocol) — covering the emissions associated with purchased electricity, along with how to account for renewable energy procurement — has been a key tool for driving corporate investment in renewables. But the protocol has a glaring hole.

Currently, a corporation can technically reduce their GHG Protocol carbon footprint without necessarily achieving a corresponding reduction in atmospheric emissions. In other words, they can decarbonize themselves on paper, without actually moving the decarbonizing needle for the world in reality.

As climate analyst Kumar Venkat explains in a recent column, with current GHG Protocol Scope 2 accounting methodologies, "if some businesses reduce their carbon footprints, then others will be saddled with higher footprints (this is explicit in the market-based accounting rules for electricity purchases and is implicit in other cases such as material purchases in the value chain).” This flawed approach means sustainability teams waste precious time, energy, and resources shuffling around claimed responsibility for emissions, without necessarily causing global emissions to actually go down.

Additionality Keeps the Focus on Impact

While some companies might procure renewable energy for purely economic reasons — such as for a fixed-price economic hedge to guard against energy price volatility — most corporations are going green with their energy as a way to reduce their own emissions and help move the world toward net-zero.

Making progress toward global net-zero emissions comes down to two fundamental questions: 1) Did we CAUSE MORE renewable energy to get built (vs. merely taking credit for something that was already there and/or taking credit for renewables that would have been built anyway, with or without your action)? 2) HOW MUCH fossil emissions did the extra clean renewable energy we caused displace? This brings us back to the fundamental importance of additionality: if we aren’t first causing more renewable energy to get built, the second question regarding avoided emissions becomes pretty irrelevant.

We begin to address the latter issue in our recent Impact Accounting whitepaper. In it, we call for the GHG Protocol to more-directly measure the Scope 2 emissions benefit of different interventions, such as renewables procurement, instead of counting proxy megawatt-hours. Merely adding additional attributes and/or granularity to unbundled renewable energy certificates (RECs) is insufficient.

But this is just half of the equation. The other critical missing feature for better-aligning with real world impact is an assessment of whether the reporting organization caused those interventions. In other words, did they have a material impact on the additionality of interventions such as renewable energy capacity. 

Additionality must be present for an organization to have an authentic impact on global emissions. Using good marginal emissions data allows us to amplify and optimize those impacts via emissionality-style strategies.

How RECs Lost Their Way and Divorced From Additionality

So why are we having a renewed conversation about additionality? The current GHG Protocol Scope 2 market-based method defines a purchasing mechanism that allows corporations to reduce their GHG footprint by retiring energy attribute certificates (EACs) like RECs and guarantees of origin (GOs). And so it follows that EACs have become the accepted “proof of purchase receipt” for green energy.

When EACs were first created, this made sense because renewable energy was rare and came with a significant price premium, and so essentially all renewable energy projects were additional. But a lot has changed since then.

Partly because the market-based standard defined EACs as the primary mechanism to reduce an organization's footprint, companies began purchasing EACs in volume. For example, in the U.S. the voluntary REC market roughly tripled during the decade 2010–2020. This is good news for the planet. BUT, unbundled RECs have comprised the largest share of that market, and there has been growing recognition and criticism that unbundled EACs alone are far too often not actually causing new renewable energy to be built. By extension, they also too often don’t genuinely represent material emissions reductions.

Of course, in 2023 unbundled EACs are not the only mechanism organizations use to procure renewable energy. There are now a diversity of procurement options, including both direct / physical and virtual power purchase agreements (PPAs) as well as utility green tariffs. Not all of these renewable energy procurement options have the same impact on renewable energy development. This is why more and more corporations are shifting to power purchase agreements to procure renewable energy, as they are generally accepted to have a systematically higher level of additionality.

Additionality Comes Back Into Focus

And so, additionality has become a goal or prerequisite for many organizations pursuing authentic action that drives investment in new renewable energy. For example, it is a prerequisite in Salesforce’s procurement approach, which the company articulated in its 2018 Clean Energy Strategy and its October 2020 white paper More Than A Megawatt

"The purpose of our 100% Renewable Energy program is to increase the proportion of renewable energy on the grid. Therefore, we only count new renewable energy generation that we’ve helped catalyze or that our suppliers have catalyzed on our behalf. Often this means providing enough financial certainty to a project's developer or financier to guarantee the return on investment necessary to justify large upfront capital investment."

Google also acknowledges the importance of additionality in its 24x7 approach to renewable energy procurement.

"To ensure that Google is the driver for bringing new clean energy onto the grid, we insist that all projects be “additional.” This means that we seek to purchase energy from not-yet-constructed generation facilities that will be built above and beyond what’s required by existing energy regulations."

At WattTime, we’ve concluded a key barrier holding back more organizations from following suit is that — let’s face it — precisely and accurately quantifying additionality can be difficult. We have rarely brought it up because we didn’t have answers ourselves. But we’ve come to agree with the many organizations who have been saying that we as a field must find some reasonable, objective way to quantify it. 

One reason for doing so is because, in reality, various parties each have partial claims to any given project and its additionality... the renewable energy developer, the bank / financier, the corporate offtaker, the tax equity investor, and the REC purchaser.

But perhaps more important, doing so can also pave the way for EACs to once again map to real-world impact. Renewable energy is part of a blended supply chain of electrons, in which "good" and "bad" inputs get mixed and spat out the other end without differentiation. Yet the market needs a mechanism and signal for buyers to show (and pay for) demand for "clean" versions of the “thing.” That's where book-and-claim approaches, such as EACs, come into play. We need a way for the voluntary market to continue sending signals, while having those signals better map to REAL impact.

A Path Forward on EACs and Additionality

WattTime’s expertise is in measuring the effect a change in energy consumption or generation has on emissions from the electricity sector. There are going to be other organizations that do a better job than us at quantifying additionality. But we view the success of this work as fundamental to what we and so many others really care about: seeing atmospheric emissions go down in reality. So, we’ve been working hard at figuring out who can get the job done, and what it might take. 

To do it, we’ve been having an increasing number of conversations with renewables developers to understand what drives the construction of new renewable energy and therefore who takes credit for getting projects built.

Most seem to agree with what the team from Schneider Electric wrote in a white paper for Smart Energy Decisions“Most renewable energy projects cannot be financed and built without a secured, creditworthy off-taker like a utility or corporation… which makes the role of additionality very straightforward: without that long-term commitment, the project wouldn’t get built.”

The world is no longer so black and white. GHG Protocol should recognize that additionality is a spectrum. All EACs are not equal. Procurement mechanisms and project specifics cause different effects on development, but this is currently obscured, in part because the GHG Protocol treats all EACs equally under current methodology — whether bundled as part of a PPA, required in a regulatory environment, or unbundled.

On this front, progress is being made to assess impact empirically and create more transparency for offtakers. For example, we’ve seen a few proposals that try to quantify this differential impact of various procurement options. RMI has proposed a “procurement factor” that could be used to compare the value different procurement options provide to renewable energy projects.

We are intrigued by this proposed methodology because it shifts from a binary test for additionality towards a spectrum that different procurement actions would fall on. The European Union recently released rules for renewable hydrogen that only allow renewable energy developed onsite or through a PPA and recently constructed and unsubsidized to count towards compliance with the rules. We encourage other organizations to explore these approaches to additionality as well as provide potential alternative additionality tests. 

Implications for Decarbonizing Other Sectors Beyond Electricity

The certificate question has broader implications beyond electricity accounting as well. Today, other sectors are considering implementing market measures for accounting, including steelaviation fuelshipping, and natural gas. These could potentially be powerful new mechanisms in the fight against climate change. But only if we can learn from the past and design them better this time to ensure authenticity.

Before the GHG Protocol considers allowing certificates in these sectors in addition to electricity, they should understand how certificates and procurement options drive development of new clean resources and ensure they are not just rearranging who is responsible for emissions with no actual net reduction in global atmospheric emissions. 

Overall, we think that Scope 2, if it retains the market-based method in some form or expands market mechanisms to other scopes, must include some assessment of whether the organization’s action caused the reported reduction in emissions inventory. For Scope 2 and EACs we put out a call to the industry to suggest potential tests. 

Henry Richardson is a senior analyst at WattTime. Please contact Henry if you have questions, comments, critiques, or proposals regarding additionality.

How Salesforce used emissionality to inform its groundbreaking D-Recs procurement

Less than two weeks ago at a sold out GreenBiz 23, tech giant Salesforce announced the procurement of 280,000 megawatt-hours (MWh) of renewable energy certificates. But this was not your classic announcement of large-scale clean energy secured through long-term contracts such as power purchase agreements (PPAs) — often focused on renewables projects in North America — which have continued to set new records year over year.

Instead, Salesforce set its sights on “high-impact renewables” in emerging markets such as Southeast Asia, Sub-Saharan Africa, and South America. They partnered with Powertrust to source Distributed Renewable Energy Certificates (D-RECs), a financial mechanism that enables organizations to accelerate deployment of capital for small-scale, distributed renewable projects.

Renewables procurement with social impact

D-REC projects can have important social impacts, by helping alleviate energy poverty through financing of projects that focus on electrifying schools, hospitals, and small businesses in less-developed and under-electrified regions of the world.

For example, in India, one Salesforce-connected project will build a solar-powered microgrid in Nagaland, an eastern state in India, for the first time bringing electricity to an isolated mountain community.

For another, in Sub-Saharan Africa, a solar-and-storage installation at a hospital will help improve electricity reliability while controlling rising electricity costs. The system will power ventilators, organ support equipment, and operating rooms.

Overall, these and other projects like that are designed to deliver on UN Sustainable Development Goals related to climate resilience (goals 9 and 11), universal energy access (goal 7), and gender equality (goal 5).

Putting emissionality into practice

Looking beyond North America to source renewable energy can also have a magnified beneficial impact on global greenhouse gas (GHG) emissions, by displacing fossil-fueled generation on dirtier grids around the world. It’s a procurement strategy known as emissionality, which Powertrust calls out as one of their four pillars. They identify “grids with the highest emissions factors and deliver projects that are positioned to have the greatest potential to reduce carbon emissions in the region.”

Case in point from the recent Salesforce announcement: a project in Brazil will replace old, dirty diesel generators with a solar-powered microgrid for a remote community along the Amazon River, reducing fuel consumption by more than 50% while slashing emissions.

This was not Salesforce’s first experience with emissionality. In late 2020, the company unveiled a strategic shift in its approach to renewable energy procurement, captured in the white paper More Than A Megawatt: Embedding Social & Environmental Impact in the Renewable Energy Procurement Process.

“As a company, we’ve been taking a hard look at what makes ‘the best’ renewable energy project,” explained Megan Lorenzen at the time. She’s a senior sustainability manager at Salesforce. “Purchasing renewable energy is about much more than adding new megawatts of renewable energy to the grid. It's about improving the state of the world, which includes considering a number of factors such as land use impacts, wildlife impacts, equity issues, community benefits, and WattTime’s emissionality work, which spans both avoided emissions from a climate perspective and human health considerations for air pollution.”

The time is now for renewables procurement to do more

Salesforce’s leadership on this front comes at a time when corporate renewable procurement can and must do more to help actually reduce global emissions, and not merely “zero out” a company’s GHG emissions footprint on paper.

Beyond North America and Europe, we’re seeing alarming examples of a potential rise in dirty fossil-fueled electricity generation. Pakistan is considering quadrupling its coal-fired power generation in a move away from natural gas, per Reuters, a move that comes ironically and tragically in the wake of devastating flooding worsened by climate change. India says it might build 28 GW of new coal power plants by 2032 to meet that country’s growing electricity demand.

Last year saw record levels of fossil fuel subsidies, according to the International Energy Agency (IEA). Most were applied in developing or ‘emerging market’ economies. The two largest categories of fossil fuel subsidies were in electricity (#1) and natural gas (#2).

A global approach to corporate renewables procurement — and especially one that incorporates an emissionality lens — can unlock dual climate and social benefits, helping to stem the tide of a pendulum swing back toward emissions-intensive fossil-fueled electricity generation.

Yes, renewable energy buildout via capacity additions worldwide has “unprecedented  momentum.” Global renewable power capacity is now expected to grow by 2,400 gigawatts (GW) over the 2022–2027 period, an amount equal to the entire power capacity of China today, according to IEA’s Renewables 2022. 
But the real impact metric will be not how many GW of clean generation get built, but rather how much fossil emissions it displaces and how many lives are beneficially impacted. Emissionality can help those same GW of renewable energy do more. Salesforce’s example is a promising start.