LEED v4, Renewable Energy, and Carbon Offsets

The U.S. Green Building Council's (USGBC's) Leadership in Energy and Environmental Design (LEED) is the market-leading standard for green building design. The recent LEED v4 update includes the ability to earn points toward certification by purchasing Green-e certified renewable energy and carbon offsets. Join Alex Pennock, manager of Green-e Energy and Todd Jones, manager of Green-e Climate, as they review the new changes and answer common questions about the updated green power and carbon offset credit, along with the rationale for these changes and how they will affect the market. With Alex Pennock, manager of Green-e Energy, and Todd Jones, manager of Green-e Climate. Originally aired Wednesday, April 10, 2014.

Transcript

1. LEED, RENEWABLE ENERGY,
   AND CARBON OFFSETS
   HOW THE LEED v4 STANDARD
   IMPACTS YOUR RENEWABLE
   ENERGY AND OFFSET STRATEGY
   April 10, 2014
   

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3. Brief Intros to LEED and Green-e
   Green-e in the 2009 versions of LEED Rating
   Systems
   LEED v.4 Green Power and Carbon Offsets Point
   Green-e “equivalence”
   Other points for renewables
   Effect of LEED v4 on Renewable Energy and
   Carbon Offset Markets
   Summary/Conclusions
   Q&A
   OUTLINE
   

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4. 2 Standards
   Working Together
   Green-­‐e  is  a  family  of  independent  
   cer1fica1on  programs,  for  renewable  
   energy,  carbon  offsets,  and  the  
   companies  and  products  that  use  them  
   to  reduce  their  environmental  impact.  
   LEED  is  an  independent  cer1fica1on  
   for  green  building  design,  
   construc1on,  opera1ons  and  
   maintenance.  
   

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5. 2 Standards
   Working Together
   

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6. 2 Standards
   Working Together
   

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7. 2 Standards
   Working Together
   The  leading  cer2fica2on  for  renewable  energy  in  North  America.    
   Works  with  renewable  energy  sellers  to  offer  consumers  na1onwide  
   clean,  renewable  electricity  that  has  been  independently  verified,  as  a  
   viable  alterna1ve  to  conven1onal  electricity  and  the  impacts  of  its  
   genera1on.  
   Cer1fies  the  following  renewable  energy  products:  
   •  Renewable  Energy  Cer1ficates,  
   •  U1lity  Green  Pricing  Programs,  and    
   •  Compe11ve  Electricity  Products.  
   

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8. 2 Standards
   Working Together
   The  global  retail  standard  for  carbon  offsets.    
   Strengthens  the  market  for  voluntary  emissions  reduc1ons  by  cer1fying  
   that  carbon  offsets  sold  contain  real,  verified  reduc1ons  from  high-­‐quality  
   and  addi1onal  projects,  verifying  sales,  correct  delivery  of  the  offsets  and  
   exclusive  retail  ownership,  and  by  reviewing  the  informa1on  provided  to  
   offset  consumers  for  adequacy  and  accuracy.  
   

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9. LEED 2009
   Green Power and Green-e in
   NC,  C&S,  Schools,  Retail,  Healthcare  (1  pt)  –  EA  CREDIT:  GREEN  POWER  
   (maximum  2  points)    
   •  “as  defined  by  the  …  Green-­‐e  Energy  product  cer2fica2on  
   requirements  or  an  equivalent.”  
   •  “Engage  in  at  least  a  2-­‐year  renewable  energy  contract”  
   •  “at  least  35%  of  the  building’s  electricity  from  renewable  sources”  
   

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10. LEED 2009
    Green Power and Green-e in
    CI  –  EA  CREDIT:  GREEN  POWER  
    (maximum  5  points)    
    •  Op1on  1:  2-­‐year  renewable  energy  contract  to  provide  at  least  50%  of  
    the  tenant’s  electricity  from  renewable  sources”  
    •  Op1on  2:  “2-­‐year  renewable  energy  contract  to  purchase  at  least  8  
    kilowaU  hours  per  square  foot  per  year”  
    

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11. LEED 2009
    Green Power and Green-e in
    EBOM  –  EA  CREDIT:  ON-­‐SITE  AND  OFF-­‐SITE  RENEWABLE  ENERGY  
    (maximum  6  points)    
    •  “Off-­‐site  renewable  energy  sources  are  defined  by  the  …  Green-­‐e  
    Energy  program  …  or  the  equivalent.”  
    •  “…  purchase  RECs  for  a  minimum  of  2  years  and  must  also  make  a  
    commitment  to  purchase  RECs  on  an  ongoing  basis  beyond  that.”  
    •  Up  to  6  points  are  awarded  for  purchases  of  25%  to  100%  RE  per  year  
    

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12. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    •  Building  Design  and  Construc1on  
    (BD&C)  
    •  Exis1ng  Building  Opera1ons  and  
    Maintenance  (EBOM)  
    •  Interior  Design  and  Construc1on  
    (ID&C)  
    •  Homes  
    •  Neighborhood  Development  (ND)  
    LEED  2009  Ra2ng  Systems   LEED  v.4  Ra2ng  Systems  
    

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13. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    BD&C  and  ID&C  –  EA  CREDIT:  GREEN  POWER  AND  CARBON  OFFSETS    
    (maximum  2  points)    
    •  “resources  that  have  come  online  since  January  1,  2005”  
    •  “contract  […]  for  a  minimum  of  five  years,  […]  delivered  at  least  annually”  
    •  “provision  of  at  least  50%  or  100%  of  the  project’s  energy  from  green  
    power,  carbon  offsets,  or  renewable  energy  cer1ficates  (RECs)”  
    •  “Green  power  and  RECs  must  be  Green-­‐e  Energy  cer2fied  or  the  
    equivalent.  RECs  can  only  be  used  to  mi1gate  the  effects  of  Scope  2,  
    electricity  use.”  
    

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14. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    •  “Carbon  offsets  may  be  used  to  mi1gate  Scope  1  or  Scope  2  emissions  
    on  a  metric  ton  of  carbon  dioxide–equivalent  basis  and  must  be  Green-­‐
    e  Climate  cer2fied,  or  the  equivalent.”  
    •  “For  U.S.  projects,  the  offsets  must  be  from  […]  projects  within  the  
    United  States.”              
    BD&C  and  ID&C  –  EA  CREDIT:  GREEN  POWER  AND  CARBON  OFFSETS    
    (maximum  2  points)    
    

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15. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    Percentage  of  total  energy  addressed  by  green  power,  
    RECs  and/or  offsets Points
    50%   1  
    100%   2  
    “Determine  the  percentage  of  green  power  or  offsets  based  on  the  quan1ty  
    of  energy  consumed,  not  the  cost.  Points  are  awarded  according  to  Table  1.”    
    Table  1.  Points  for  energy  from  green  power  or  carbon  offsets  
    BD&C  and  ID&C  –  EA  CREDIT:  GREEN  POWER  AND  CARBON  OFFSETS    
    (maximum  2  points)    
    

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16. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    EBOM  –  EA  CREDIT:  RENEWABLE  ENERGY  AND  CARBON  OFFSETS  
    (maximum  5  points)    
    “Demonstrate  one  or  both  of  the  following  for  at  least  a  por2on  of  the  
    building’s  total  energy  use.    
    •  Total  energy  use  is  met  directly  with  renewable  energy  systems.    
    •  A  minimum  two-­‐year  contract  is  in  place,  with  the  commitment  to  
    renew  on  an  ongoing  basis,  to  purchase  qualified  resources  that  will  
    be  delivered  at  least  annually.  Resources  must  have  come  online  a_er  
    January  1,  2005.”    
    

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17. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    •  If  the  second  op1on,  then  “engage  in  a  contract  to  purchase  green  power,  
    carbon  offsets,  or  Renewable  Energy  Cer1ficates  (RECs).”  
    •  RECs  for  Scope  2  only;  offsets  for  Scopes  1  or  2  
    •  “Green  power  and  RECs  must  be  Green-­‐e  Energy  cer2fied  or  the  equivalent”  
    and  “Carbon  offsets  […]  must  be  Green-­‐e  Climate  cer2fied,  or  the  
    equivalent.”  
    •  “For  U.S.  projects,  the  offsets  must  be  from  […]  projects  within  the  United  
    States.”  
    EBOM  –  EA  CREDIT:  RENEWABLE  ENERGY  AND  CARBON  OFFSETS  
    (maximum  5  points)    
    

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18. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    EBOM  –  EA  CREDIT:  RENEWABLE  ENERGY  AND  CARBON  OFFSETS    
    “Use  the  following  equa1on  to  calculate  credit,  up  to  the  5-­‐point  limit:”    
    Points      =  
    Renewable  energy  
    generated  %  
    1.5%  
    Energy  purchased/offset  %  
    (Not  to  exceed  100%)  
    25%  
    +  
    

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19. LEED v4
    Stronger Green Power Obligations &
    Introducing Carbon Offsets
    •  Annual  electricity  and  non-­‐electricity  energy  use  calcula1ons    
    •  Calcula1ons  showing  required  REC,  green  power,  or  carbon  
    offsets  for  targeted  point  threshold      
    •  Purchase  contract  for  RECs,  green  power,  or  carbon  offsets    
    •  Green-­‐e  equivalency  documenta1on,  if  not  Green-­‐e  cer1fied  
    •  EBOM  on-­‐site:  RE  produc1on,  and  10-­‐year  contract  for  
    replacement  RECs  /  offset  if  on-­‐site  RECs  sold      
    REQUIRED  DOCUMENTATION  
    

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20. LEED v4
    Other Points for Renewables
    •  Credit  is  based  on  COST  of  electricity,  not  produc1on  and  use  
    •  Off-­‐site  “solar  gardens”  allowed    
    ND+C  and  ID+C  –  EA  CREDIT:  RENEWABLE  ENERGY  PRODUCTION  
    hUp://www.leeduser.com/credit/NC-­‐2009/EAc2  
    •  REC  reten1on  not  specified,  
    but  indicated  in:  
    •  USGBC  Forums    
    •  Reference  Guide  (for  
    EBOM  RE  point  e.g.)  
    •  LEEDuser.com  (for  2009  
    NC  EAc2):  
    

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21. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    LEED  v4  says:    
    “Green  power  and  RECs  must  be  Green-­‐e  
    Energy  cer2fied  or  the  equivalent.  RECs  can  
    only  be  used  to  mi1gate  the  effects  of  Scope  
    2,  electricity  use.  ”  
     
    

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22. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    •  Resource  eligibility  
    •  All  aUributes  included  
    •  Double  coun1ng  preven1on  
    •  Annual  verifica1on  
    •  Customer  disclosure  
    •  Claims  enforcement  
    Includes:  
    

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23. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    •  Standalone  tracking  system  REC  
    re1rement  
    •  ‘Green-­‐e  Energy  Eligible’  facility  
    •  ‘Cer1fiABLE’  RECs  
    •  RE  w/out  carbon  value  
    •  Null  power  claimed  as  RE  
    ≠
    

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24. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    •  Green-­‐e  Energy  US  RECs  s1ll  allowed,  though  USGBC  
    interested  in  suppor1ng  local  genera1on  
    •  EBOM  2009  EU  alterna1ve  compliance  paths    
    •  Offsets  allowed  for  electricity  emissions  in  any  country  
    •  Calcula1on  informa1on  in  Reference  Guide  
    INTERNATIONAL  TIPS  
    

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25. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    ≠
    American  Carbon  Registry  (ACR)  VERs  
    Clean  Development  Mechanism  (CDM)  CERs  
    Climate  Ac1on  Reserve  CRTs  
    Gold  Standard  VERs  
    Verified  Carbon  Standard  (VCS)  VCUs  
    …alone  
    

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26. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    Carbon  offset  
    project  
    Greenhouse  gas  
    emissions  reduc2on  
    Retail  carbon    
    offset  product  
    End-­‐use  
    consumer  
    Carbon  Offset  Market  -­‐  
    Oversight  
    

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27. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    The  American  Carbon  Registry  
    The  Climate  Ac2on  Reserve  
    The  Gold  Standard  
    The  Verified  Carbon  Standard  
    Carbon  offset  
    project  
    Greenhouse  gas  
    emissions  reduc2on  
    Retail  carbon    
    offset  product  
    End-­‐use  
    consumer  
    Carbon  Offset  Market  -­‐  Oversight  
    Registry  account-­‐
    holders/retailers  
    •  Permanence    
    •  Addi1onality  
    •  Verified  
    •  Enforceable    
    •  Real  
    

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28. ( =) What is
    “equivalent”
    to Green-e?
    or
     
    The  American  Carbon  Registry  
    The  Climate  Ac2on  Reserve  
    The  Gold  Standard  
    The  Verified  Carbon  Standard  
    Carbon  offset  
    project  
    Greenhouse  gas  
    emissions  reduc2on  
    Retail  carbon    
    offset  product  
    End-­‐use  
    consumer  
    Carbon  Offset  Market  -­‐  Oversight  
    Registry  account-­‐
    holders/retailers  
    •  Permanence    
    •  Addi1onality  
    •  Verified  
    •  Enforceable    
    •  Real  
    Looks  for  the  
    Green-­‐e  Logo  
    

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29. •  Permanence    
    •  Addi1onality  
    •  Verified  
    •  Enforceable    
    •  Real  
    The  American  Carbon  Registry  
    The  Climate  Ac2on  Reserve  
    The  Gold  Standard  
    The  Verified  Carbon  Standard  
    Carbon  offset  
    project  
    Greenhouse  gas  
    emissions  reduc2on  
    Retail  carbon    
    offset  product  
    End-­‐use  
    consumer  
    Registry  account-­‐
    holders/retailers  
    Looks  for  the  
    Green-­‐e  Logo  
    •  Cer1fies  the  retail  carbon  offset  product  
    •  Looks  back  at  the  chain  of  custody  to:  
    §  Set  a  standard  for  project  standard  eligibility  
    §  Verify  chain  of  custody  from  project  to  end  user  in  registries  
    •  Verifies  the  retail  transac1on  for  correct  delivery  and  unique  
    ownership  
    ( =) What is
    “equivalent”
    to Green-e?
    or
     
    

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30. LEED v4
    Effect on the Markets
    for Renewable Energy and
    Carbon Offsets
    •  Importance  of  long-­‐term  purchasing  is  addressed,  transi1on  may  
    not  be  smooth  
    •  Per-­‐MWh  prices  for  long-­‐term  REC  contracts  higher,  and  prices  
    already  likely  to  rise  as  market  demand  meets  supply  
    •  U1lity  green  electricity  programs  may  benefit,  as  long-­‐term  
    par1cipa1on  is  easier  and  poses  less  risk  
    •  Number  of  buildings  choosing  the  point  likely  to  decrease  vs  
    using  LEED  2009,  slowing  growth  of  RE  MWh  for  LEED  
    

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31. LEED v4
    Effect on the Markets
    for Renewable Energy and
    Carbon Offsets
    •  Compe11on  between  RE  and  offsets  for  electricity  emissions  
    •  Offset  markets  will  benefit  overall  
    •  Renewable  MWh  s1ll  chosen  for  electricity  due  to  price  
    •  Total  emissions  addressed  by  LEED  buildings,  and  purchases  of  
    offsets  and  renewable  MWh,  will  rise  overall  
    •  Interna1onal  projects  benefit,  as  point  can  be  met  with  offsets  
    rather  than  only  US  RECs  
    

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32. Summary
    and Conclusions
    •  Green  power/Renewable  Energy  and  Carbon  Offset  points  in  3  of  5  
    new  LEED  ra1ng  systems  
    •  2  possible  points  in  BD&C  and  ID&C,  and  4  possible  points  for  RE  
    or  offset  in  EBOM  (up  to  5  total  with  on-­‐site  RE)  
    •  50  or  100%  of  energy  use  in  BD&C  and  ID&C,  0-­‐100%  in  EBOM  
    •  2005  online  date  
    •  5-­‐year  commitments  in  BD&C  and  ID&C,  2-­‐year  commitment  with  
    renewal  in  EBOM  
    •  Green-­‐e  Energy  cer1fica1on  required  for  green  power  and  RECs  
    

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33. Summary
    and Conclusions
    •  Green-­‐e  Climate  cer1fica1on  required  for  carbon  offsets  
    •  Offsets  for  US  buildings  met  with  US  offsets  
    •  REC  ownership/re1rement  required  for  all  renewable  energy  usage  
    claims  in  the  US  
    •  There  is  no  “equivalent”  of  Green-­‐e;  purchasers  of  uncer1fied  
    products  will  need  to  demonstrate  assurances;  project  cer1fica1ons  
    alone  are  not  equivalent  
    •  RE  and  offset  markets  likely  to  grow;  RE  perhaps  more  slowly  
    •  Cost  of  RE  in  point  will  increase,  likely  to  remain  below  offset  prices  
    

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34. ?
    ?
    Todd Jones
    Green-e Climate Manager
    Center for Resource Solutions
    todd@resource-solutions.org
    CONTACT
    @greenemarktplc
    facebook.com/CenterForResourceSolutions  
    Alex Pennock
    Green-e Energy Manager
    Center for Resource Solutions
    alex@resource-solutions.org
    

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