by Will Vooght

Increasingly businesses are faced with the need to demonstrate not only the quality or effectiveness of their products or services, but their corporate and social responsibility; how they treat their customers, staff and what they’re doing to improve themselves. One way a business can demonstrate this (if they aren’t already obliged to do so) is by reporting on their environmental impact; namely, their carbon emissions. Not only is this a way for a business to communicate their environmental performance, but creates scope for improving processes, reducing costs and taking advantage of new markets or new market opportunities. 

Defra produces annual guidance for businesses on how to report their emissions; providing all the numbers on how to convert business activity into carbon emissions (the conversion-factors) and suggesting the best approach – what should be included, what not, which sectors of business operations to focus on, etc. But part of their approach has become rather controversial: how renewable electricity is reported.

In summary, it contravenes some other policy, reduces/removes incentives to generate your own and may even make renewable electricity tariffs (or ‘greener’ suppliers) superfluous. 

Obviously, we think this is no good.

The newest incarnation of the emission-reporting guidance states that if you’re generating and using renewable electricity on-site, you must calculate the emissions from the electricity using a ‘grid average’ emission-factor. Grid-average is basically the carbon-intensive end result of all the coal, gas, and nuclear used to generate the bulk of the UK’s electricity.

For example, instead of saying that for every kilowatt-hour used, renewable electricity has no emissions (which is, quite clearly, accurate) – the generator would have to count every kilowatt-hour as having caused approximately half a kilogram of Carbon Dioxide emissions in its generation – the grid average. So, magically, renewable electricity – that has never physically had any chance to mix with carbon-packed grid electricity – has obtained a phantom carbon ‘attachment’.

We need to clarify a few things.

Renewable Obligation Certificates (ROCs) provide a financial incentive for renewable generators to produce electricity – they give renewable generators a better rate of return for their generation so that potential investors can compete on a more level playing-field with the economies of scale achieved through fossil-fuel generation. As a result, and being a financial mechanism, they don’t relate directly to emissions. Defra say differently; as renewable electricity generators are claiming ROCs, they shouldn’t be allowed to claim zero emissions.

Defra’s solution to this;

Count renewable electricity as zero-emission, but don’t receive any financial support (making the investment considerably more difficult to finance).
Receive financial support through the Renewable Obligation – but count the renewable electricity as non-renewable (which is imprecise).

Good Energy is proud to be the only UK electricity supplier with a 100% renewable fuel-mix. This means that, for every kWh of electricity we buy, a Renewable Energy Guarantee of Origin (a REGO) comes ‘attached’ to that power to prove that it’s renewable. Fuel Mix is based on EU legislation, all suppliers have to produce theirs annually – you can see them all here: http://www.electricityinfo.org/suppliers.php. REGOs are certificates that are attached to renewable electricity that do two things; one, prove where that electricity has been generated, and two, prove that there were no emissions created in the generation of that electricity. But according to the same guidelines, Good Energy must state that our electricity has grid-average emission-factor because our generators have received financial support under the Renewable Obligation.

Fuel-Mix ensures that there’s information readily available, and annually updated, that should allow electricity customers to use their suppliers’ fuel mix to calculate emissions from their electricity consumption. This fits in with guidance under Ofgem’s new Green Certification Scheme – where supplier Fuel-Mix is used a method of supplier comparison. But it’s side-stepped in the reporting guidelines.

All of this is confusing, especially considering Defra’s guidance is based on something called the Greenhouse Gas Protocol (an internationally recognised standard used for company emissions reporting) – in which it states, and I quote; “…the GHG Protocol Corporate Standard recommends that companies obtain source/supplier specific emission factors for the electricity purchased”.

So why should we be using flawed data based on inconsistent practice? What’s the thought process? Why not, for a change, try and link some policy together? There are simple solutions out there that’ll benefit all and increase the accuracy of how emissions reporting is done………we’ve got some and we’d be happy to share them.