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:
- 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.
- 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.