Month: April 2021

Green-e® Energy certification provides important market value

Green-e energy

Green-e® is the leading independent certification and verification program for renewable energy in the North American retail electricity market. The program aims to uphold the integrity of renewable energy and climate products and advance clean energy policy and technology. At 3Degrees, we are committed to ensuring all renewable energy certificate (REC) sales help support a robust voluntary renewable electricity market, and therefore always advise our voluntary buyers to purchase Green-e® Energy certified RECs in North America. Recently, as the price of Green-e® Energy certified RECs has increased, it has become more common for some suppliers to offer RECs that do not meet Green-e® Energy standards to buyers.     

In this blog, we’ll explore how and why Green-e® Energy certification was developed and the role the certification continues to play in supporting strong standards for the voluntary renewable energy market.

Background about Green-e® Energy certification

When retail marketing of certificates started gaining popularity in 2000 and 2001, the risk of consumer confusion and the potential for misleading advertising quickly became apparent. In response, the NGO Center for Resource Solutions incorporated RECs into The Green-e® Energy Standard in 2002. From the start, Green-e® Energy has been based on a stakeholder-driven standard and guided by an independent governance board with representatives from environmental NGOs, renewable energy project developers, and other industry experts.  

Since 2002, the standard has been updated numerous times (at least every three years) to maintain relevance to voluntary market needs. This rigorous commitment to public process has led to the standard being referenced or required by a number of certification standards and reporting frameworks. 

Throughout this evolution, the mandate of Green-e® Energy has always remained the same: maintain credible standards for renewable energy products that support the growth of renewable energy development above and beyond state mandates, while also ensuring consumer protection and transparency. To do this work, Green-e® Energy requires:

  • Chain-of-custody audits of the REC supply chain to prevent double counting
  • Facility-level review of potential double claims 
  • Verification of the accuracy and transparency of suppliers’ marketing messages
  • Validation that the renewable energy is incremental to any government mandates for renewable energy, which also helps customers maximize their impact
  • Additional steps to address potential interactions with state policies that could limit the ability of voluntary customers to claim custody of purchased RECs

Clear, credible REC specifications support a robust voluntary market

3Degrees firmly believes that markets have the power to lead meaningful environmental change. The Greenhouse Gas Protocol reaffirms this concept of change by including a market-based methodology in its Scope 2 Guidance. Demand for specific attributes of electricity generation — in this case, renewable attributes — push up prices and can stimulate supply.

While a REC is created for each MWh of renewable energy generated, the type of renewable energy generation, the age or location of the facility, and other information about renewable energy represented by a REC can vary considerably. Green-e® Energy certification defines baseline criteria for renewable energy generation, which adds value to RECs that qualify for certification. For example, the certification stipulates that facilities supplying a certified product must be newer than 15 years old and that RECs must be generated close in time to a buyer’s electricity consumption. When RECs that meet these criteria increase in price, it signals to the market that more buyers value the attributes defined in the Green-e® standard and more generation that meets this standard should be built. This is the outcome that NGOs, 3Degrees, and most voluntary buyers want to support.     

A supplier offering non-certified RECs significantly below Green-e® market price is likely offering RECs that are not eligible to be Green-e® certified, which undermines the integrity of the market. Many factors can contribute to ineligibility, including the facility being older than Green-e® Energy online date requirements, the facility not meeting sustainability criteria for hydro and biomass, or double claims issues that arise when multiple parties aren’t clear in public statements about REC ownership. RECs that are not eligible for Green-e® and are not eligible for a renewable portfolio standard (RPS) are typically thought to have little to no environmental value and have not been salable. Buyers and sellers who insist on Green-e® Energy certified RECs will ensure this continues to be true.    

Occasionally, there may be older projects that warrant voluntary market support, such as when a project requires funding in order to continue to operate or to complete upgrades to key generation equipment. If a supplier is marketing RECs in this way, we recommend that clients ask the supplier to substantiate the claim that REC revenue is needed to properly maintain the facility. 

Voluntary renewable energy markets can have an even greater positive impact

Voluntary REC buyers support the development of renewable energy projects of all sizes and types across the country. As a leading supplier of Green-e® certified RECs, 3Degrees has sent tens of millions of our customers’ dollars to project developers. As the price of energy from new renewable generation has declined and an increasing percentage of new projects represent the lowest-cost option, many voluntary buyers are thinking about how to ensure their purchase remains meaningful beyond simply reducing their Scope 2 emissions.     

The good news is that there are many options. One recent paper we recommend reading was authored by Megan Lorenzen and Max Scher at Salesforce. Entitled More than a MW: Embedding social and environmental impact in the renewable energy procurement process, this paper discusses a list of values, such as being located in regions with higher-than-average emissions, that can be supported by projects which also generate RECs. The REBA Institute has since launched a program to further explore the findings of this paper. 

3Degrees is doing its part to push the market toward higher impact REC products. We continue to expand our portfolio to include products that improve the integrity and impact of renewable energy purchases, including products that are certified through the Green-e® Energy, EKOenergy, and Peace REC programs.  Even as we focus on product differentiation, our commitment to helping maintain clear, credible standards for the majority of voluntary RECs purchased remains unwavering.

Supporting the longevity of Green-e® Energy Certification and other global ecolabels is vital to safeguarding these standards and promoting the continued growth of the renewable energy market in North America and around the world.

 

Getting Serious About Net Zero: Extraordinary Possibilities for Climate Action

Net Zero Banner

Last week, we celebrated the 51st Earth Day with our offices still shuttered due to a global pandemic. Yet, I see signs of hope that we are turning a corner. Vaccination rates continue to climb in the U.S., spring’s telltale signs are emerging, including baseball with masked fans actually in the seats, and the ongoing commitment from businesses to climate action just received a strong bolster of support from the U.S. government.

At a global virtual Earth Day summit on April 22, U.S. President Joe Biden announced that the United States would cut its global warming emissions at least in half by the end of the decade. The scope of this ambition is impressive as is the clear signal that global collaboration among governments and businesses is required to achieve this goal. Case in point: it was incredibly encouraging to see Japan, Canada, Britain, and the European Union committing to steeper emission reductions.

Pathways to net zero

The transition to net zero emissions continues to be a vital concern for organizations and governments. Net zero emissions are achieved when anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period, according to the Intergovernmental Panel on Climate Change (IPCC). The 2018 IPCC special report highlighted the need to achieve net zero emissions by 2050, at the latest, to limit global warming to 1.5°C.

Since then, an increasing number of organizations around the world have been making net zero climate commitments and enlisting support in getting there. To date, more than 1,000 businesses are working with the Science Based Targets initiative (SBTi) to reduce their emissions. Meanwhile, 509 cities, 23 regions, 2,162 businesses, 127 of the biggest investors, and 571 Higher Education Institutions have signed on to achieving net zero carbon emissions by 2050 at the latest as part of the UNFCCC’s Race to Zero campaign. And over 800 B Corps including 3Degrees have pledged to reach net zero by 2030 (20 years ahead of the target set in the Paris Agreement).  

All of this activity around corporate climate commitments is an encouraging sign and is incredibly necessary. It is also not enough. We have to do more.

A moment for extraordinary possibilities

As the 3Degrees team assesses the announcement from the Biden Administration, we appreciate that achieving this goal will be a tremendous economic and political challenge. The scope of changes to the power and transportation sectors are monumental. It’s a refreshing and humbling reminder for all of us: addressing climate change requires ambition as well as the resolve and determination to make it happen. 

“This is a moral imperative, an economic imperative,” noted President Biden. “A moment of peril, but also a moment of extraordinary possibilities.”

At 3Degrees, our daily work with clients who are stepping up and taking bold action to address climate change inspires us. How will you and your organization rise to the occasion for extraordinary possibilities?

Setting an RE100 Target in 2021: What You Need to Know

RE100 2021 Guidance

Across the world, the private sector is increasingly doing its part to support the energy transition. In fact, as of Q2 2021, approximately 300 global companies are now members of the RE10o initiative, which means they have committed to using 100% renewable electricity across their global operations. To join, companies must meet RE100’s eligibility criteria and must commit to reaching a 100% target by 2050, though many companies have committed to reaching their target earlier. RE100 supports renewable electricity development by giving companies a public platform to make ambitious commitments, by setting technical criteria to ensure these targets are met with integrity, and by giving companies access to a community of peers to aggregate demand and share best practices.

Changes to RE100 reporting for 2021

When companies sign on to an RE100 commitment, they must ensure they are up to date with the initiative’s reporting guidance, which is reviewed and updated on an annual basis. To that end, there were some notable recent changes to RE100’s technical criteria. The most significant updates are listed below and apply to the 2021 reporting year:

  • Standard delivery of renewable electricity is now eligible to be counted toward an RE100 target, provided that it is substantiated by renewable energy attribute certificates (EACs). This update is in line with recent efforts to better align clean energy targets of energy users and suppliers, including a report from Center for Resource Solutions’ Clean Energy Accounting Project (CEAP) and a white paper from the Renewable Energy Buyers Alliance (REBA).
  • Average grid mix can now be counted toward an RE100 target, provided that it is greater than 95% renewable, and that there is no mechanism for actively sourcing renewable electricity in that market.
  • New language clarifies that contractual instruments other than EACs may be used for voluntary procurement, provided that they meet Scope 2 Quality Criteria.
  • Third-party verification of RE100 submissions is now required; chain-of-custody certification, such as Green-e®, or third-party auditing of Scope 2 emissions, such as for CDP reporting, will satisfy this requirement, provided that other RE100 technical criteria are met.
  • Third-party certification, such as Green-e®, is recommended to ensure the environmental sustainability of hydropower and biomass.
  • Companies are now requested to report the commissioning date of the facilities they source from, although there are not yet any requirements regarding the “new date” of power plants.
  • New references have been made to the RE100 Materiality Threshold and Market Boundary criteria.

Understanding the importance of renewable energy market boundaries

RE100 requires that, outside of the regional markets that exist in the United States and Canada, as well as in Europe, all renewable energy must be sourced from the same country in which a company is claiming the consumption of that renewable energy. In other words, in most parts of the world, a country’s market boundary is its own geographic borders. In defining what constitutes a market boundary, RE100 aligns with the Greenhouse Gas Protocol’s guidance for market-based instruments and considers: 1) physical grid connection and coordination, 2) regulatory consistency across electricity sectors, and 3) mutual recognition of renewable energy instruments between countries. Adhering to market boundaries is a critical component of a credible renewable energy claim.

Addressing challenges associated with market boundaries and supply limitations

The greatest challenges to meeting a global RE100 target are often associated with geographic restrictions around procurement. There are many countries around the world — primarily in Latin America, Africa, and Asia — that have limited or virtually no market-based options for purchasing renewable energy. Although financially attractive and impactful, on-site generation is not always a realistic option due to either limited space, local regulations, or complications associated with facility ownership. 

Companies faced with geographic eligibility challenges may do the following:

  1. Companies are encouraged to report these barriers through the RE100 initiative, and if possible, communicate their demand for renewable energy options to local stakeholders. This allows buyers to demonstrate aggregated demand for renewable energy in these markets and strengthens the message sent to local policymakers and NGOs to remove obstacles to in-market procurement. 
  2. Companies may choose to purchase from adjacent countries while in-country options are being developed. This sends demand signals for renewables regionally, however, it is not compliant with RE100 technical criteria and will affect the nature of renewable energy claims a company can make. When considering whether to source renewable energy regionally, buyers must be aware of the limitations imposed by market boundaries. Furthermore, buyers who do choose to source EACs from outside of a market boundary should consider where their purchase will have the greatest impact on market development.

Navigating the path to 100% renewable electricity

Understanding how to reach a global 100% renewable electricity target that balances impact, cost effectiveness, and compliance with reporting requirements can be complicated and is especially challenging for companies with operations across multiple continents. Companies committing to RE100 must first ensure they understand the current reporting criteria and should identify the greatest barriers to reaching their target. Additionally, companies that want to follow RE100 recommendations should consider adding ecolabels, such as the Green-e®, EKOenergy, and Peace REC programs, to their renewable energy purchases to improve the integrity and impact of their procurement. 

If your company is seeking to understand and address barriers to achieving an RE100 target, or is interested in maximizing the environmental and social impact of your renewable energy purchases, please feel free to reach out to us. We’re happy to help.

(Improved Forest Management) Winston Creek

 

Project type: Improved forest management

Emission reduction type: Carbon removals

Standard: American Carbon Registry

Washington’s Winston Creek project is sequestering carbon and improving local air quality

The Winston Creek Forest Project is a 10,000-acre forest located in Lewis County, Washington, owned and managed by Port Blakely, a family-owned company dating back five generations. The forest is located between two separate blocks of the Gifford Pinchot National Forest and serves as a bridge for owls traveling from nesting locations, which forms the basis of the Safe Harbor Agreement with the U.S. Fish and Wildlife Service.

Port Blakely Winston Creek Forest Carbon Project from Port Blakely on Vimeo.

Because a forest’s abilities to capture carbon from the atmosphere increases exponentially between 35 and 60 years of growth, trees in the Winston Creek forest project are only harvested after they’ve had a chance to mature and add considerable mass. Many forests in the industry are harvested after 35 years of growth, but at Winston Creek, Port Blakely waits almost twice as long. Adding almost two decades to the tree’s life exponentially increases its ability to sequester carbon and improve local air quality for the surrounding communities. The project also harvests less than 1.5% of the acreage each year, creating long-term sustainable forest management.

Project type: Improved forest management

Emission reduction type: Carbon removals

Standard: American Carbon Registry

The Winston Creek Forest Project is a 10,000-acre forest located in Lewis County, Washington, owned and managed by Port Blakely, a family-owned company dating back five generations. The forest is located between two separate blocks of the Gifford Pinchot National Forest and serves as a bridge for owls traveling from nesting locations, which forms the basis of the Safe Harbor Agreement with the U.S. Fish and Wildlife Service.

Port Blakely Winston Creek Forest Carbon Project from Port Blakely on Vimeo.

Because a forest’s abilities to capture carbon from the atmosphere increases exponentially between 35 and 60 years of growth, trees in the Winston Creek forest project are only harvested after they’ve had a chance to mature and add considerable mass. Many forests in the industry are harvested after 35 years of growth, but at Winston Creek, Port Blakely waits almost twice as long. Adding almost two decades to the tree’s life exponentially increases its ability to sequester carbon and improve local air quality for the surrounding communities. The project also harvests less than 1.5% of the acreage each year, creating long-term sustainable forest management.

CO-BENEFITS

Environmental:

Clean Water

The streams that run through the protected area are under careful management, ensuring the continual flow of clean water. All stream crossings have been upgraded, meeting or exceeding the highest standards well ahead of state-sanctioned deadlines. The company also voluntarily upgraded its stream crossings in Oregon to meet the stricter Washington state standards.

Wildlife Habitat

A mosaic approach to forest management allows this project to provide a diversity of trees and plant life, offering a safe habitat for several endangered species.

 

Social:

Education/Recreation

Those who visit the forest can see first-hand the many benefits of improved forest management. In a nearby forest over 80,000 4th graders have been through the company’s environmental education program, helping students learn about sustainable forestry. The forest area also provides recreational opportunities for local communities and visitors such as hiking, hunting, fishing, biking, berry picking and bird watching.

 

Relevant SDGs:

  • Quality Education: Port Blakely’s Environmental Education program helps build the sustainability leaders and outdoor enthusiasts of our next generation.
  • Clean Water: Clean water and fish habitat are enhanced through forestry best management practices used throughout the project such as protection of aquatic habitats and slope stabilization.
  • Climate Action: The trees in the Winston Creek Project help fight climate change by actively sequestering carbon for nearly twice as long as in many industrial forests.
  • Life on Land: The project is designed taking a landscape-wide approach with the habitat needs of native wildlife taken into consideration, including terrestrial and aquatic forest species.

Photos Courtesy of Port Blakely

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To learn more about the Winston Creek project and how your organization can support this initiative and address its GHG emissions with verified emissions reductions, get in touch.