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Clean Energy Accounting Project: Standard Delivery Renewable Energy

Clean Energy Accounting Project: Standard Delivery Renewable Energy

Consumers working to meet renewable energy and greenhouse gas emissions targets find many challenges when accounting for renewable energy that they do not actively procure. This webinar will present the newly defined consensus position on credible use claims for Standard Delivery Renewable Energy, explore variability across current data sources, and propose a new set of data credibility criteria and quality considerations to guide consumers. We will also explore how leadership criteria may go beyond credibility and examine a real-world case study.

SPEAKERS
• Holly Lahd, Lead Energy Program Manager, Target
• James Critchfield Director, Green Power Partnership Program, U.S. EPA
• Todd Jones, Director, Policy, Center for Resource Solutions
• Peggy Kellen, Director, Policy, Center for Resource Solutions

This webinar is part of Center for Resource Solutions’ new Clean Energy Accounting Project (CEAP), which develops standardized, stakeholder-reviewed clean energy and GHG emissions accounting guidance to address outstanding questions in voluntary and regulatory markets.

Transcript

  1. Accounting for Standard Delivery Renewable Energy March 16, 2021 ©

    2021 Center for Resource Solutions. All rights reserved.
  2. PAGE 2 Today’s Agenda © 2021 Center for Resource Solutions.

    All rights reserved. • Welcome • Project and Report Overview • Speakers: • Todd Jones, Center for Resource Solutions • James Critchfield, US Environmental Protection Agency • Holly Lahd, Target Corporation • Q&A
  3. PAGE 3 Nongovernmental Organization (NGO) creating policy and market solutions

    to advance sustainable energy since 1997. • Education, including the Renewable Energy Markets annual conference • Green-e® certification for suppliers and users of renewable energy and carbon offsets in the voluntary market • Renewable energy policy and market development Center for Resource Solutions © 2021 Center for Resource Solutions. All rights reserved.
  4. Develops standardized, stakeholder-reviewed clean energy and GHG emissions accounting guidance

    and best practices Addresses outstanding questions in voluntary and regulatory markets Focus areas include: • Accounting for Clean Energy Use • Hourly Renewable Energy Accounting • Renewable Energy Impact Metrics • Clean Energy Storage • Regulatory Policy Clean Energy Accounting Project (CEAP) PAGE 4 © 2021 Center for Resource Solutions. All rights reserved. To Learn More: www.resource-solutions.org/CEAP
  5. Accounting for Standard Delivery Renewable Energy. PAGE 5 © 2021

    Center for Resource Solutions. All rights reserved.
  6. Voluntary PAGE 6 © 2021 Center for Resource Solutions. All

    rights reserved. • Active purchases of renewable energy • Driven by consumer preference for certain types of renewables • Allows customers to reduce impact of their electricity use • Reduces available REC supply, providing an indirect signal to the market to develop new renewable generation • Provides opportunities for consumers directly impact new renewable energy development • No active procurement • Provided on behalf of all customers • Delivery typically driven by government mandate, utility targets, or where renewables are a cost- effective resource • As renewable energy targets grow toward 100%, ability to include Standard Delivery Renewable Energy avoids over procurement • Can be difficult to identify credible data • Use is not directly impactful Standard Delivery
  7. • Different accounting approaches creating uncertainty and limiting voluntary commitments

    • Lack of clarity around what is needed and available to support credible claims Problem Statement PAGE 7 © 2021 Center for Resource Solutions. All rights reserved. Objectives • Clarify when the use of Standard Delivery Renewable Energy may be credibly reported by customers • Identify existing and needed resources that may help companies account for Standard Delivery Renewable Energy and associated GHG emissions
  8. Survey Workshop 1: Identify Consensus • Supporting Document: Recognition of

    Standard Delivery Renewable Energy in Different Programs and Standards Workshop 2: Data Focus • Supporting Document: Data Sources: Accounting for Standard Delivery Renewable Energy Final Report Approach PAGE 8 © 2021 Center for Resource Solutions. All rights reserved.
  9. Stakeholders PAGE 9 • Maya Kelty, 3Degrees • Chris Roe,

    Amazon • Matt Panopio, Amazon • Devon Walton, APX • Charles Eley, Architecture 2030 • Pedro Faria, CDP • Ed Holt, Ed Holt & Assoc. • Adam Cooper, Edison Electric Institute • James Critchfield, US Environmental Protection Agency • Travis Johnson, US Environmental Protection Agency • Ben Gerber, M-RETS Inc. • Jenny Heeter, National Renewable Energy Lab • Andrew Glumac, RE100 • Priya Barua, Renewable Energy Buyers Alliance • Holly Lahd, Target Corporation • Chelsea Hasenauer, The Climate Registry • Michelle Zilinskas, The Climate Registry • Jeff Deyette, Union of Concerned Scientists • Lori Bird, World Resources Institute • Heidi Ratz, World Resources Institute • Norma Hutchinson, World Resources Institute • Dan Sobrisnki, WSP • Katie Eisenbrown, WSP • Dara Ward, Xcel Energy • Lauren Quillian, Xcel Energy • Nick Martin, Xcel Energy © 2021 Center for Resource Solutions. All rights reserved.
  10. Supporters PAGE 10 © 2021 Center for Resource Solutions. All

    rights reserved. The findings outlined in this report are supported by:
  11. About the report. PAGE 11 © 2021 Center for Resource

    Solutions. All rights reserved.
  12. • Accounting for Consumption of Renewable Energy • Standard Delivery

    Renewable Energy Data • Potential Data Criteria and Considerations • Reporting Actively Procured and Standard Delivery Renewable Energy What’s Included? PAGE 12 © 2021 Center for Resource Solutions. All rights reserved.
  13. Standard Delivery Renewable Energy may be credibly reported by a

    customer as consumed renewable energy and by a provider as delivered renewable energy when the attributes of the renewable energy are retained or retired on behalf of the customer (or a group including the customer), and other established requirements for credible renewable electricity usage claims are met. Consumers and leadership recognition programs may require that renewable energy consumption used to meet a target meet additional criteria. Consensus Statement: PAGE 13 © 2021 Center for Resource Solutions. All rights reserved.
  14. Todd Jones Center for Resource Solutions Standard Delivery Renewable Energy

    Data PAGE 14 © 2021 Center for Resource Solutions. All rights reserved.
  15. The data needed to substantiate credible claims to Standard Delivery

    Renewable Energy is inconsistent and often unavailable. PAGE 15 © 2021 Center for Resource Solutions. All rights reserved.
  16. Chapter 01. Data Categories PAGE 16 © 2021 Center for

    Resource Solutions. All rights reserved.
  17. 1. Supplier-specific data 2. Renewable Portfolio Standard (RPS) compliance data

    3. Residual mix data 4. Grid mix or grid average data For resource mix (fuel type) or GHG emissions (CO 2 or CO 2 e) or both. Data Source Categories PAGE 17 © 2021 Center for Resource Solutions. All rights reserved.
  18. Information about GHG emissions or the resource mix representing the

    portfolio of resources used (owned or procured) for retail customers or sales. Renewable energy included in a standard offer or default product may be considered Standard Delivery Renewable Energy. • Databases • Individual utility programs • Power source disclosure (PSD) • RPS compliance (separate category) Supplier-specific Data PAGE 18 © 2021 Center for Resource Solutions. All rights reserved.
  19. Information about load-serving entity (LSE) or state-wide compliance with state

    regulatory mandates that require LSEs to supply a percentage of retail sales with renewable resources. May represent a percentage of renewable energy delivered to, and that may be claimed by, all utility customers. RPS Data PAGE 19 © 2021 Center for Resource Solutions. All rights reserved.
  20. In general, “untracked or unclaimed energy and emissions,” or “publicly

    shared electricity.” In practice, residual mix may be calculated as: • Energy production/generation data that factors out voluntary renewable energy purchases; or • The generation attributes remaining after all specified power and renewable energy certificate (REC) purchases are removed from the system (i.e. “unsettled” generation). Residual Mix Data PAGE 20 © 2021 Center for Resource Solutions. All rights reserved.
  21. Production data for a certain area. Can account for imports

    and exports. Typically, does not represent delivered electricity. May include Standard Delivery Renewable Energy as well as all other renewable energy located in a certain area. Grid Mix Data PAGE 21 © 2021 Center for Resource Solutions. All rights reserved.
  22. Chapter 02. Variation Between and Within Data Categories PAGE 22

    © 2021 Center for Resource Solutions. All rights reserved.
  23. 1. Data format and unit. 2. Included energy resources. 3.

    Delivered vs. produced electricity. 4. Methodologies. 5. Verification. 6. Transparency. 7. Scope. 8. Frequency. Areas of Variability Across Data Categories PAGE 23 © 2021 Center for Resource Solutions. All rights reserved. To support a credible renewable energy use claim, data must represent delivered electricity, and reflect transactions of specified generation and attributes (e.g., RECs). Consumers with operations across service territories or regions may need to rely on multiple data sources with different characteristics.
  24. Variation within Data Categories PAGE 24 © 2021 Center for

    Resource Solutions. All rights reserved. Data Subcategory Areas of Inconsistency Supplier-specific Databases and Utility Program Data • Detail of the methodology • Verification requirements • Treatment of null power • Vintage requirements • Bundling requirements • Scope State-required Supplier-specific Data (e.g. PSD) • Electricity generated vs. delivered • Renewable energy definitions • Treatment of different types of procurement • Requirement for standardized methodology • Verification requirements
  25. PAGE 25 © 2021 Center for Resource Solutions. All rights

    reserved. Variation within Data Categories Data Subcategory Areas of Inconsistency Supplier-specific RPS Compliance Data • Renewable energy definitions • Whether use of multipliers, deferred obligations, alternative compliance are included or can be broken out separately • Vintage and banking requirements • Treatment of distributed generation • Calculation of RPS obligations Regional Residual Mix Data • Scope/coverage • Remove all specified vs. voluntary renewable energy Regional Grid Average Data • Not delivered electricity data
  26. Chapter 03. Data Credibility Criteria and Quality Considerations PAGE 26

    © 2021 Center for Resource Solutions. All rights reserved.
  27. 1. The data describes delivered electricity. 2. Generation information within

    the data is accurate. 3. All ownable attributes that define the generation being claimed are aggregated. 4. Attributes are exclusively owned by or retired on behalf of the consumer (or a group including the customer) and not double counted. 5. Attributes are not double claimed. 6. Generation occurs in the same market and relative timeframe as consumption. Credibility Criteria for Data Sources PAGE 27 © 2021 Center for Resource Solutions. All rights reserved.
  28. • Oversight. • Transparency of methodology. • Data scope and

    specificity. • Environmental quality of renewable resources included. • Publication frequency/age. • Consistency with other data sources. Additional Data Quality Considerations PAGE 28 © 2021 Center for Resource Solutions. All rights reserved.
  29. Accounting for Standard Delivery Renewable Energy Center for Resource Solution’s

    Clean Energy Accounting Project Webinar James Critchfield, US EPA March 16, 2021
  30. Reducing The Impact of Purchased Electricity • How do consumers

    get their electricity? • Self-generate • Purchase electricity • Electricity use is a significant source of emissions and air pollution • Consumers can reduce the environmental and health impacts associated with electricity consumption by proactively choosing how their power is generated 30
  31. Choice • Choice is a powerful driver for change •

    Consumers are increasingly making a choice in how their electricity demand is met to address a range of issues including: • Acheive RE targets • Climate concerns • Sustainability interests • Cost considerations • A consumer’s voluntary and proactive choice for how their power demand is generated has shown itself to be a significant influence in evolving the grid towards cleaner sources of generation 31
  32. Voluntary Consumer Action 32 0 100 200 300 400 500

    600 2010 2011 2012 2013 2014 2015 2016 2017 2018 (e) 2019 (e) Million MWh Year Voluntary Green Power Is An Important Market Driver 34% 10% 35% 20% Compliance New Compliance Existing Adapted from: NREL & LBNL (e): estimated Note: Does not include large hydro
  33. Claims • Both electricity providers and consumers seek to make

    claims regarding the electricity products they supply or consume • Because physical electricity tells us little about its source or origin across a shared utility grid, a parallel market instrument-based system is used to track, allocate and substantiate generation and use of [renewable] electricity • The energy attribute instrument used to substantiate renewable generation and use is called a renewable energy certificate (REC) • RECs underpin generation, delivery and usage claims and are used to reduce a consumer’s emissions footprint under greenhouse gas accounting practices • The “claimable” portions of the standard delivery grid mix are those that can be substantiated based on market instruments and are available to the consumer • A provider’s generation portfolio is not the same a delivery for claims and GHG reporting purposes 33
  34. Standard Delivery “Mix” 34 Conventional Emitting Sources Conventional Zero-Emitting Sources

    Existing Renewables State Renewable Energy Mandates Utility Renewable Economic Investments Consumption of a utility’s standard default delivered electricity product may include power from a “mix” of sources
  35. Standard Delivery RE Considerations • Are electricity providers conveying the

    energy attributes to consumers from their above compliance utility economic investments? • Does the standard delivery mix of renewable resources meet nationally accepted environmental standards in terms of resource quality? • Is the electricity provider meeting the state renewable energy portfolio standards through “banked” renewable energy certificates? • Is the electricity provider meeting the state renewable portfolio standard by way of alternative compliance payments, rather than delivery of generated renewable electricity? • Can consumers credibly claim energy attributes from existing renewables components of the standard delivery mix, such as utility-scale hydropower, which are not often issued energy attribute instruments (e.g., RECs)? • How should a consumer align their procurement strategy when the standard delivery mix includes non-renewable zero-emitting generation, such as nuclear power, when the consumer has both a renewable energy and GHG reduction target? 35
  36. Consumer Leadership • Voluntary consumers seek to make a difference

    through their proactive actions and preferences for specific sources of electricity • To credibly make a difference, voluntary consumers should: • Make a proactive choice for using green power • Substantiate use of electricity from renewable resources with RECs • Avoid double claims and double counting • Ensure consumption of renewable generation is incremental and surplus to what would have otherwise been available to the consumer (e.g., regulatory surplus) • Ensure the quality and content of a consumed resources meets national standards for resource quality and content 36
  37. Green Power Leadership Awards EPA Areas of Leadership and Impact

    • Intention and Ambition – Organization’s intention and ambition to establish and achieve a renewable energy or emissions reduction target using green power. ➢ Green Power Use – Organization’s voluntary and proactive green power use demonstrates leadership, drives demand, and increases market impact. • Communication – Organization’s communications related to green power use help raise awareness, provide social proof, inspire others, and support market principles and best practices. • Influence – Organization’s concrete actions to influence green power access and use within various communities. These communities could include competitors, suppliers, employees, customers, and load-serving entities; communities disproportionately burdened by environmental harms and risks, such as minority, low-income, and tribal communities; and others. • Transparency – Organization’s willingness to collaborate, share information, report data, and advance best practices and market principles. • Innovation, Sustainability, and Grid Improvements – Organization’s innovative actions help create a more sustainable and improved grid to help accelerate the transition to a clean energy future. This includes actions around the deployment of storage, electrification of operations, support of resilient grid infrastructure, and supporting market principles and best practices 37 https://www.epa.gov/greenpower/green-power-leadership-awards
  38. Questions James Critchfield critchfield.james@epa.gov 202-343-9442 38

  39. EPA’s Green Power Partnership 39 +700 Partners +70 billion kWh

    used annually The equivalent electricity use of 6.6 million average American homes Partnership accounts for 43% of Voluntary Market 2% of total US annual retail sales +100 Green Power Communities https://www.epa.gov/greenpower
  40. CASE STUDY: RENEWABLES FROM UTILITIES IN TARGET’S 100% RENEWABLE ELECTRICITY

    GOAL CRS Clean Energy Accounting Project Webinar March 16, 2021
  41. 41 41 Target’s Clean Energy Strategy and Journey Energy efficiency,

    Demand response Rooftop solar Large-scale renewable energy purchases Renewable partnerships with utilities Electric vehicle charging Renewable energy in supply chain 2003 -> 2016 -> 2017 ->
  42. 42 42 Renewable Electricity Projects Contribute to Corporate Goals Behind-the-Meter

    Onsite Solar Utility Green Tariff Agreements Utility Generation Supply Virtual Power Purchase Agreements 100% Renewable Electricity Goal Scope 2 GHG Emissions Reduction Goal Company Goals Renewable Energy Sources (w/ RECs) Scope 3 GHG Emissions Reduction Goal
  43. 43 43 Target is served by hundreds of U.S. utilities

  44. 44 44 Values of RE Accounting Guidance Clean Energy Standards

    Utility RE procurement Voluntary RE procurement Aligns Accounting and Public Policy Value of RE Procurement Complementary not Competitive • Begins to connect load, supply, and RE project location in accounting guidance • for reporters with multiple facilities across regions • Provides consistency among reporting companies • Reduces uncertainty => more goal adoption?
  45. 45 45 Q & A Holly Lahd Target Corporation

  46. PAGE 46 © 2021 Center for Resource Solutions. All rights

    reserved.
  47. Thank You. Peggy Kellen POLICY DIRECTOR peggy.kellen@resource-solutions.org 415-568-4289 Todd Jones

    POLICY DIRECTOR todd.jones@resource-solutions.org 415-561-2118 www.resource-solutions.org © 2021 Center for Resource Solutions. All rights reserved.