Energy Attribute Certificates (EACs), like Renewable Energy Certificates (RECs) or Guarantees of Origin (GOs), certify that 1 MWh of renewable energy (e.g., solar, wind) was generated and added to the grid. These certificates, separate from the physical electricity, confirm the energy's renewable source. Each EAC includes key details about the energy's source, technology, origin, production time, date, and the name of the power production site.
AVAILABILITY AND TYPES OF EACS GLOBALLY
EACs are available in various countries, with markets and registries globally. Common types include GOs, RECs, and I-RECs. In the United States and Canada, the Renewable Energy Certificate System (RECs) is prevalent, serving both compliance and voluntary purposes. The International REC Standard (I-RECs) operates in Latin American, Asian, and African countries lacking local mechanisms. GOs, RECs, and I-RECs are recognized for reporting in the Carbon Disclosure Project (CDP), GHG Protocol, and the RE100 Initiative.
EACs AND CARBON FOOTPRINT MANAGEMENT
Scope 2 emissions are GHG emissions from purchased electricity, steam, heating, and cooling used by a company. They're significant globally, with electricity and heat generation contributing to a third of GHG emissions. EACs are key to reducing Scope 2 emissions, offering a flexible, cost-efficient means to claim energy use and meet sustainability goals.
COMPLIANCE AND REPORTING WITH EACS
The GHG Protocol Scope 2 quality criteria state that firms must purchase certificates equal to their electricity usage for a designated period at a particular site when acquiring EACs. After purchasing, the company or a supplier representing them must cancel or retire these certificates. This process validates their energy consumption claims, and they must openly disclose the details to maintain the authenticity of these claims.
CALCULATION METHODS FOR COMPANY EMISSIONS
Companies use two methods for emissions calculation: the 'location-based method' (emissions from their local power grid) and the 'market-based method' (emissions from electric utility and EAC contracts). The GHG Protocol mandates both methods. The location-based method measures direct emissions, while the market-based method accounts for emissions from purchasing decisions. These methods provide insights into a company's carbon footprint and reduction strategy. Purchasing unbundled EACs is a cost-effective approach for addressing scope 2 market-based emissions.
POST-CANCELLATION BENEFITS OF EACS
Companies can claim renewable energy usage and its environmental benefits after cancelling EACs that align with their energy consumption. These certificates play a crucial role in managing emissions. They indicate renewable energy use and show commitment to reducing scope 2 emissions and achieving renewable energy goals.
ADVANTAGES OF EACS FOR COMPANIES
A key benefit for companies buying EACs is that it's a low-cost strategy, requiring less investment than Power Purchase Agreements or on-site generation. By acquiring the certificates, purchasers contribute to the remuneration of power generated from renewable sources, demonstrating their commitment towards a decarbonized economy.
HOW CAN STRIVE BY STX HELP?
To learn more about EACs, understand relevant voluntary systems, and see if they fit your organization's sustainability strategy. Please fill out our form or email us at marketing@stxgroup.com to schedule a meeting.
