In this video from VERGE 2020, Dave Meyer, 3Degrees’ Director of LCFS Programs, speaks with Katie Fehrenbacher, Sr. Transportation Writer at GreenBiz, about California’s Low Carbon Fuel Standard and how 3Degrees is helping organizations take advantage of this program to reduce their transportation footprint and subsidize further transportation decarbonization.
- Microsoft purchased P-RECs issued by Energy Peace Partners from Congolese solar developer Nuru’s newly commissioned 1.3MW commercial solar-plus-storage project in Goma, DRC.
- The P-REC purchase helped Nuru fund the recently completed construction of 35 mini-grid-connected streetlights in the Ndosho neighborhood of Goma.
- The streetlights: Improve quality of life with better nighttime visibility and road safety, and enhance neighborhood security; Support the local economy by allowing businesses to stay open at night; Improve air quality by reducing reliance on diesel generators, which are both expensive and highly polluting.
- This transaction unlocks a new renewable energy attribute option that other organizations can now leverage to drive renewable projects in underserved communities around the globe.
Microsoft has long been a leader in corporate sustainability. As part of its commitment to be carbon negative by 2030, Microsoft has pledged to have its operations run with 100% renewable electricity by 2025. The company has developed business models that further the transition to renewable energy, and it seeks opportunities to invest in high impact renewable energy products and stimulate development in under-resourced communities and regions of the world.
3Degrees had been in discussions with Energy Peace Partners (EPP) since 2017, exploring ways in which the two organizations could work together to help operationalize a new and innovative instrument developed by EPP, Peace Renewable Energy Credits (P-RECs).
So when Microsoft issued an RFP specifically geared to driving the adoption of renewables and maximizing associated environmental impacts, 3Degrees included P-RECs in the RFP response. The inaugural corporate purchase of P-RECs tests a new business model for the deployment of renewables in new geographies.
Creating a New Instrument for Renewable Energy Sourcing
In making this first-of-its-kind transaction a reality, there were some unique challenges that needed to be addressed.
- Because P-RECs are an entirely new instrument, there was little guidance on how they would fit into existing corporate sustainability reporting frameworks, including CDP and RE100.
- The P-REC pilot project is a 1.3 MW ground-mounted solar installation connected to a 520 kW/2.2 MWh battery energy storage system that introduces new electrification to the neighborhood of Ndosho in Goma, Democratic Republic of Congo (DRC) where no electrical grid infrastructure has previously existed. Like many developing nations in sub-Saharan Africa, DRC lacks widespread electrical interconnection, and this plant is not interconnected to other grids beyond Ndosho.
“With P-RECs, companies like Microsoft that are looking to procure renewable energy can invest in regions that are the most impacted by climate change and that are currently deprived of access to modern energy. Companies can maximize the impact of their investments not only from a carbon reduction perspective, but also from a climate equity perspective.”
– Vanessa Miler, Director, Energy Innovation and Impact, Microsoft
How We Helped
3Degrees, Energy Peace Partners, and project developer Nuru worked collaboratively to create the framework for scalable and accountable corporate sourcing. 3Degrees was key to this success by:
- Developing contractual mechanisms to implement project milestones to mitigate risks that could arise from unexpected issues related to construction of the solar plant and installation of the streetlights. This provided all parties with enough assurances to move forward and make this first-of-its-kind transaction a reality.
- Seeking guidance from leading renewable energy and GHG reporting initiatives to understand how these platforms could accommodate this new and unique instrument.
- Continuing to advocate for standardized guidance on how to report EACs that differ from standard renewable energy usage claims but do directly support market development in regions with limited electrical grid interconnection and renewable energy procurement options. The development of P-RECs has encouraged RE100 to consider P-RECs in the context of flexibility mechanisms for regions like sub-Saharan Africa, although no new guidance has yet been issued.
“We developed the P-REC in order to support new renewable energy projects in fragile, energy poor regions of the world. With this inaugural P-REC purchase, Microsoft is demonstrating that corporate renewable energy procurement can be high impact by making a difference in communities like Ndosho, where increased access to sustainable and affordable power will be transformative. Energy Peace Partners is proud of this groundbreaking collaboration with Microsoft, 3Degrees, and Nuru.”
– David Mozersky, President, Energy Peace Partners
P-REC Project profile
The Nuru solar energy project
The P-RECs for Microsoft’s transaction will be issued by Energy Peace Partners (EPP) and associated with Congolese solar developer Nuru’s newly commissioned 1.3MW commercial solar-plus-storage plant in Goma, eastern Democratic Republic of Congo, where less than 3% of residents have access to electricity. The system is one of sub-Saharan Africa’s largest solar-plus-storage off-grid mini-grids currently in operation and will provide power to more than 700 households and anchor enterprise clients.
Microsoft’s P-REC purchase assisted Nuru (which means light in Swahili) to fund the construction of mini-grid-connected streetlights in the Ndosho neighborhood of Goma, a community impact project co-designed with local stakeholders. The streetlights are improving night time safety and security in the community, allowing businesses to stay open at night, reducing reliance on diesel generators, and expanding renewable energy capacity in an area that has never had grid infrastructure.
Read more: Nuru Solar Energy Project Profile
Solar grid in DRC generates first-ever Peace Renewable Energy Credits (P-RECS)
The regions of the world most affected by crises tend to be those most vulnerable to climate change, and are largely excluded from climate finance flows and related investment. In addition, conflict-affected communities tend to experience high levels of energy poverty, and face issues like hunger, malnutrition and lack of basic human necessities. The effects of climate change are global, and fragile states, which have contributed least, should not have to bear these burdens alone.
Peace Renewable Energy Credits (P-RECs) have the potential to expand the renewable energy revolution to vulnerable regions, improve quality of life, and create economic opportunities. A P-REC is an International Renewable Energy Credit (I-REC) with an additional certification by Energy Peace Partners (EPP) of the social and economic co-benefits associated with the project.
In February 2020, the first sale of P-RECS delivered new funding in Goma, a region in eastern Democratic Republic of Congo. These P-RECs were issued from a 1.3MW solar mini-grid constructed by Congolese solar developer Nuru. Revenue from this transaction was used to finance the installation of 35 streetlights along the mini-grid.
SOLAR ARRAY IN GOMA
The DRC has one of the lowest rates of electrification and energy consumption in the world. Congolese citizens do not have an interconnected national grid. Hydropower is the country’s primary source of electricity, but it meets only one-third of the 3GW in unmet and growing demand. This project is one of Africa’s largest off-grid solar mini-grids.
The solar project is expected to serve over 750 households and small to medium-sized businesses. The sale of the first 1,000 P-RECs funded the first of three phases of street light installations.
Developer Nuru has used 100% of P-REC revenue to install public street lights in Goma’s Ndosho neighborhood. Prior to installation, the community identified the lack of streetlights as one of its top priorities.
As of March 20, 2020 an estimated 28,000 people – more than a third of Ndosho population – are seeing tangible improvements from the first stage of this project. With the continued sale of P-RECs, the second and third stage are planned to extend street lights across the entire neighborhood.
+ The solar array and connected street lights in Ndosho have reduced the need for carbon intensive diesel generators; this has a direct climate mitigation impact by reducing local air pollution and decreasing carbon emissions.
+ P-REC revenue provides the capital necessary to unlock project funding.
+ The street lights support the operation of night markets and enable businesses to stay open later, both of which have strong, positive impacts on the local community and economy.
+ The construction and maintenance of the solar array, batteries, and street lights have created, and will sustain, quality local jobs.
Health & Safety
+ More reliable access to electricity and reduced reliance on diesel generators will have a positive impact on human health in Goma.
+ Improving community lighting at night increases safety and security in densely populated areas where crime incidents have previously caused insecurity for residents and businesses.
project profiles or contact us.
As your organization works to reduce its international energy footprint (Scope 2 emissions) to meet corporate renewable energy goals, you need all the data and resources necessary to move the needle and fast.
Our I-RECs and GOs infographic illustrates the similarities and differences of these instruments and provides the quick resource you need to take action to address your organization’s environmental impact.
Darigold and the Northwest Dairy Association (NDA), have led the industry in environmental stewardship for years. In 2018, Darigold won the Community Impact Award for Sustainability from the Seattle Business Magazine. To build on this progress, Royal Dairy (a member of NDA) invested in a BioFiltro vermicomposting system which prevents the release of 34,000 tons of CO2-equivalent from their farm’s manure management lagoon.
Watch this video learn more about this innovative carbon reduction technology.
WATCH THE VIDEO
3Degrees’ Energy & Climate Practice Director Tyler Espinoza discusses the growing corporate demand for power purchase agreements (PPAs) in European markets.
Watch the video
Founded in Golden, Colorado in 2004, Proterra is a leader in the design and manufacture of zero-emission electric transit vehicles, charging infrastructure, and other electric vehicle technology solutions for heavy-duty applications. To date, Proterra has sold nearly 1,000 electric buses to over 43 states and provinces across the United States and Canada. At the core of its business, Proterra seeks to help transform the transportation industry by shifting away from loud, fossil-fuel powered vehicles, and toward quiet, purpose-built, clean energy-powered electric vehicles. To help enable this transformation, the organization tapped into California’s Low Carbon Fuel Standard (LCFS) program. Taking part in the program helps Proterra and its customers generate additional revenue to invest in EV and EV infrastructure manufacturing, and contributes toward the goal of reducing California’s transportation fuels by 20% by 2030.
Under California’s legislation, organizations that produce or use fuels with a carbon-intensity (CI) lower than the state benchmark, such as biodiesel, RNG, ethanol, and EV charging, can generate LCFS credits. The lower the CI of the fuel, the more LCFS credits can be generated. These LCFS credits are sold into the marketplace to generate revenue. With few exceptions, the credits generated through the LCFS from EV charging are ear-marked for reinvestment into further EV adoption within California’s transportation sector.
For Proterra’s customers, leveraging the LCFS market has a very clear upside. They are able to lower their operational costs and the total cost of ownership while pursuing long-term sustainability objectives to power their vehicles with electricity as opposed to fossil fuels. However, managing the eligibility and registration process, monthly reporting, program administration, and sale of the credits can be a time-consuming process.
How we helped
In partnership with Proterra, 3Degrees developed a full-service program that allows Proterra’s customers to generate revenue through the LCFS and spur additional investment into electric buses and clean charging infrastructure. 3Degrees helps Proterra manage the end-to-end LCFS program administration, from establishing pathway eligibility to quarterly and annual reporting, to implementation of eligible green power, and credit monetization.
The program is designed to build economies of scale by pooling together customers’ credits to achieve the highest possible market price. Proterra passes on the credit value to its customers, which lowers their total cost of ownership, driving further investment in EVs and EV infrastructure.
While using grid energy to charge EVs enables LCFS credit generation, using renewable energy, either in the form of on-site renewable power generation or through the use of a renewable energy product backed by Renewable Energy Certificates (RECs), increases credit generation by lowering the CI of the power used for charging to zero. Proterra’s partnership with 3Degrees also matches its customers’ charging activity with zero-CI renewable energy certificates, allowing them to match 100% of charging with renewable energy while increasing total LCFS credit generation.
It is very early in Proterra’s program, however, the benefit of this program to Proterra and its customers is clear and the company’s solution is scalable. Revenue generated through the state’s incentive program lowers costs for Proterra’s customers and allows for further investment in transportation decarbonization. This program provides a solution that benefits all parties while also working to help California meet its carbon reduction target, a triple-win for Proterra, its customers, and the state of California.
Learn how your organization can leverage the LCFS program to accelerate its transition to clean transportation. Get in touch with us.
Since the 2018 release of the Intergovernmental Panel on Climate Change (IPCC)’s special report on ways to limit global warming to 1.5°C, which stated the need to reach global “net zero” emissions by 2050, many organizations have either started or stepped up their carbon reduction commitments to take action to achieve this goal. But committing to reach net zero emissions and understanding how to undertake that effort are two very different things.
This Pathways to Net Zero Emissions white paper covers:
- A comprehensive assessment of net zero and why it’s important
- The variety of options available to address Scope 1, 2, and 3 emissions
- The actions that companies can take to get started immediately, no matter its size or budget
Explore this white paper to learn more about net zero and how your organization can reduce emissions as much as possible, as soon as possible.
Gas utility leaders can get a broad understanding of voluntary renewable programs in this webinar, featuring 3Degrees’ Amanda Mortlock and Center for Resource Solutions’ Rachael Terada.
The panelists discussed various program approaches including renewable natural gas and carbon offsets, strategic value for utilities with a well-designed program – including case studies from three major gas utility programs, and the latest on development of Green-e® certification standards for RNG.