Tag Archives: offsets

FAQs for becoming certified under Climate Active – Part 2

One of our service offers is helping our clients determine their Climate Active carbon footprint and obtain Climate Active certification from the Commonwealth Government. Over the last few months, we’ve received many calls of organisations wanting to find out more about Climate Active accreditation, which resulted in the publication of  Part 1 of this series.

In Part 2 of this series, we will discuss more details about scope 1, 2 and 3 emissions and what emission sources typically form part of a Climate Active carbon footprint. In the final blog post of this series, we will go into more details about how to get certified under Climate Active.

What are scope 1, scope 2 and scope 3 emissions?

Scope 1 emissions are emissions directly generated at your operations, such as burning natural gas or driving company cars, or refrigerant gases in your air conditioning equipment.

Scope 2 emissions are caused indirectly by consuming electricity. These emissions are generated outside your organisation (think coal-fired power station), but you are indirectly responsible for them.

Scope 3 emissions are also indirect emissions and happen upstream and downstream of your business. Examples are waste, air travel, the consumption of goods and services, contractor emissions, or leased assets.

Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

Figure 1: Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

Scope 3 categories

According to the GHG Protocol, specifically the Corporate Value Chain Accounting and Reporting Standard, there are 15 categories of scope 3 emissions

Upstream scope 3 emissions

  1. Purchased goods and services
  2. Capital goods
  3. Fuel- and energy-related activities (not included in scope 1 or scope 2)
  4. Upstream transportation and distribution
  5. Waste generated in your operations
  6. Business travel
  7. Employee commuting
  8. Upstream leased assets

Downstream scope 3 emissions

  1. Downstream transportation and distribution
  2. Processing of sold products
  3. Use of sold products
  4. End-of-life treatment of sold products
  5. Downstream leased assets
  6. Franchises
  7. Investments

While this list looks a bit overwhelming, not all emission sources will be relevant. It’s important to prioritise your data collection efforts and focus on your most significant and relevant emission sources. You can ask questions such as whether you expect the emission source to be large relative to your scope 1 and scope 2 sources, or whether you have influence over the activity, or whether your stakeholders deem the emission source relevant.

The graphic below shows a graphical representation of a typical Climate Active boundary for emission sources.

Typical Climate Active boundary for emission sources

Figure 2: Typical Climate Active boundary for emission sources

What are the benefits of calculating scope 3 emission sources?

Going through the list of upstream and downstream scope 3 emission sources is a great exercise to identify the carbon intensity of your value and supply chain. It encourages the quantification and reporting of emissions from various suppliers, which can help you drive greater emission reductions. It will also have a snowball effect by not only you focusing on reducing your direct emission sources, but also encouraging your suppliers to reduce theirs.

For many organisations scope 3 emissions can represent a much larger emission source than scope 1 and scope 2 emissions, and it is often eye-opening to calculate your carbon footprint across all three scopes. Also, the more scope 3 emission sources you include in your carbon inventory, the more credibility your statement of carbon neutrality will have.

Understanding scope 3 emissions will help you plan for potential future carbon regulations and can guide corporate procurement decisions and product design.

What emission sources are in a typical Climate Active footprint?

A Climate Active carbon footprint encompasses many emission sources across the three carbon accounting scopes. One of the first steps in getting certified under the Climate Active program is to determine your carbon footprint boundary.

You need to include all emissions that you have direct control or ownership of, such as natural gas, transport fuel usage by your vehicles, and electricity consumption in your operations. You also need to identify all emissions that are a consequence of your activities but are outside of your direct ownership or control, such as waste and contractors’ transport.

You must also include emissions from third party electricity use under your organisation’s control even if they are offsite, such as outsourced data centres, if these emissions are large relative to other emission sources.

You don’t need to include every single emission source, but you must assess all other direct and indirect emissions to determine whether they are ‘relevant’.

The relevancy test

Under Climate Active, particular emissions sources are relevant when any two of the following conditions are met:

  • The emissions are likely to be large relative to your electricity, stationary energy and fuel emissions
  • The emissions contribute to your GHG risk exposure, and including and addressing them will help you to avoid future costs related to energy and emissions
  • The emissions are deemed relevant by your key stakeholders (such as major customers, suppliers, investors or the wider community)
  • You have the potential to influence an emissions reduction
  • The emissions are from outsourced activities that were previously undertaken in-house, or from outsourced activities that are typically undertaken within the boundary for comparable organisations. Data centres and transport are typical examples of this.

If an emission source is relevant, you must include it in your carbon footprint boundary. You can exclude emissions that are not relevant, but you should disclose these in your public reporting documents.

You may find that many emission sources will be relevant, but you don’t have to collect data for all of them. For instance, if the associated emissions constitute less than 1% of the total carbon footprint, you can include the source in your boundary, but you don’t have to calculate its associated emissions.

There are many more questions to be answered, so stay tuned for Part 3 of this blog post series. If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.

100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

 

FAQs for becoming certified under Climate Active – Part 1

One of our service offers is helping our clients determine their Climate Active carbon footprint and obtain Climate Active certification from the Commonwealth Department of Industry, Science, Energy and Resources.

Over the last few months, we’ve received many calls of organisations wanting to find out more about Climate Active accreditation, so we thought it would be a good idea to publish a Frequently Asked Questions about Climate Active. In this article, we will discuss questions about the program in general. In the next blog post, we will go into more details about how to get certified under Climate Active.

What is carbon neutrality?

Carbon neutrality (or zero net emissions) is reached when all emissions in your defined carbon footprint boundary are zero. Ideally, your carbon inventory boundary will encompass as many emission sources as possible so that your claim for carbon neutrality is credible.

You can reach carbon neutrality by:

  • Reducing your emissions onsite through energy efficiency or by installing solar PV
  • Buying renewable energy
  • Buying carbon neutral products and services
  • Netting off the rest of your emissions through the purchase of carbon offsets

What is Climate Active?

Carbon neutrality can be self-declared, by calculating your carbon footprint, and offsetting it. However, it does not come with the same credibility as getting certified under a Government-backed program. This is where Climate Active comes in.

Climate Active is a highly trusted certification program, which is administered by the Commonwealth Department of Industry, Science, Energy and Resources. It was first launched in 2010 and was originally known as the National Carbon Offset Standard (NCOS).

Initially, it was only possible to achieve carbon-neutral certification for organisations, products and services, but in 2017 the certification options were expanded to events, buildings and precincts.

Organisations that achieve certification under this program are allowed to display the Climate Active trademark and logo, which showcases this achievement.

What are the benefits of going carbon neutral under Climate Active?

Becoming certified under Climate Active shows that you are taking a stand in terms of climate change and that you want to be a leadership organisation. It signals to your staff, suppliers, and customers that you have a purpose beyond making money. Climate Active certification provides your business with the opportunity to:

  • Demonstrate that your organisation is a leader by taking a stand on climate action
  • Align with Sustainable Development Goals
  • Differentiate your brand and increase customer recognition
  • Meet growing stakeholder expectations and enhance reputation
  • Attract and retain talented employees and build internal capacity
  • Connect better with the community
  • Generate revenue, increase customer loyalty
  • Save energy and operating costs
  • Future-proof your organisation by managing carbon risk, including supply-chain risk

Can I go carbon neutral outside of Climate Active?

If you are looking to achieve carbon neutrality in Australia, the most credible way is to get certified under Climate Active. However, it is not mandatory to get certified under this Standard. You can use the Standard for guidance in calculating and offsetting your carbon footprint and self-declare carbon neutrality. Alternatively, you can use the Standard to understand what your Climate Active carbon footprint would look like, in preparation for future certification under the Standard.

Should we go carbon neutral under Climate Active now or wait till our net zero target date?

If you have a long-term goal to reach net zero emissions, you can fast track this achievement by going carbon neutral under Climate Active right away.

Then as you reduce your carbon emissions by installing solar, or by being more efficient with your energy use, you will be able to reduce your carbon offset purchases. Done this way, you have set yourself an internal carbon price (equal to the price of your carbon offsets), which you can use to get sustainability projects over the line more easily.

Going carbon neutral right away will also signal to the market that you are not working towards a goal that is far away, but that you are taking immediate steps to address climate change.

What is the difference between NGER and Climate Active?

The National Greenhouse and Energy Reporting (NGER) scheme, established by the National Greenhouse and Energy Reporting Act 2007 (NGER Act), is a national framework for reporting your greenhouse gas emissions, energy production and consumption. Reporting under NGER is mandatory for large energy users and carbon emitters, and only applies to scope 1 and scope 2 greenhouse gases (see the graphic below).

Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

Figure 1: Emission sources and scopes – graphic adjusted from the Corporate Value Chain Accounting and Reporting Standard

On the other hand, Climate Active is a voluntary program, and it requires that you report your upstream and downstream scope 3 emissions, as well as scope 1 and scope 2.

There are many more questions to be answered, so stay tuned for part 2 of this blog post series which discusses more details about scope 1, 2 and 3 emissions and what emission sources typically form part of a Climate Active carbon footprint.

If you are going through Climate Active certification for the first time, the whole process can seem a bit confusing. Engaging a registered consultant such as 100% Renewables will ensure a smooth and easy process. Please download our Climate Active brochure to find out more about how we can help you with your Climate Active certification.

100% Renewables’ staff are registered consultants with Climate Active. If you would like to achieve certification, or prepare for certification, please contact Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

 

5 key considerations for Climate Emergency Plans [includes video]

This blog post follows on from the one last week. I recently presented to the Maribyrnong community in Melbourne on emissions trends and barriers to the uptake of renewables, as well as considerations for the development of climate emergency plans. Today’s article discusses five key considerations.

You can also watch me talk about these five key considerations in this 5-min video:

About the Climate Emergency

The problem of rising GHG emissions

Global temperatures are rising and will continue to grow. Without globally significant efforts, greenhouse gas emissions may increase to over 100 billion tonnes annually by 2100, which is double current emissions. Even if all countries met their current pledges under the Paris Agreement, we are on track to exceed 1.5°C of warming (above pre-industrial temperatures), and to then increase by 3-5°C by 2100 — with additional warming beyond.

Projected temperature increase according to Climate Action Tracker

Figure 1: Projected temperature increase according to Climate Action Tracker

Rising global temperature causes catastrophic impacts, such as bushfires, droughts, floods, severe weather events, heat waves, rising sea levels and disruptions to our food supply.

By how much do we need to decrease emissions to have a ‘safe climate’?

According to climate science, a safe climate is one where global temperature increase stays less than 1.5°C above pre-industrial temperatures. We need to decrease our emissions by 45% from 2010 to 2030 and then to net-zero by mid-century to give us a 50/50 chance of meeting this target. This means that we need to almost halve our emissions by 2030.

Emitting greenhouse gases under a ‘current policies’ scenario means that climate risk will be catastrophic. Incremental change is not enough to get climate risk to an acceptable level. The only way this risk can be adequately managed is by rapid action.

Declaring a climate emergency

Declaring a climate emergency recognises that aiming for net-zero by 2050 may be too late. It means that your climate efforts need to

  • start now,
  • increase in scale rapidly and
  • continue for decades.

In 2016, Darebin City Council in Victoria was the first government in the world to declare a climate emergency. Now, as of the 1st of May, 95 Australian local governments have made the same declaration.

Following the declaration of a climate emergency, you need to develop a Climate Emergency Plan that sets out how you will help address the climate emergency.

5 key considerations for developing Climate Emergency Plans

Consideration #1: Net-zero ASAP

If your council declares a climate emergency, you should aim to achieve net-zero emissions for your LGA as soon as possible, for instance by 2030. You may even need to target negative emissions by mid-century by incorporating drawdown measures.

Drawdown is the projected point in time when the concentration of greenhouse gases in the atmosphere stops increasing and begins to reduce. Drawdown can only be achieved by removing greenhouse gases from the atmosphere, such as through agriculture and forestry.

Consideration #2: Include adaptation and resilience in your plan

Climate change is not some distant impact in the future. It’s here, and it’s affecting us already. Your climate emergency plan needs to include actions on how your council and community can adapt to climate change, in addition to reducing your carbon emissions.

Adaptation for council operations means that built assets, such as roads, stormwater drains and buildings, may not be able to withstand flooding, fire and intense storms. It means that your zoning and planning decisions will probably need to change and that there may be an increased demand for council services, such as water supply or community support for the elderly. Your area may also experience food supply issues. You will need to have emergency response plans for severe weather events, heat waves, flooding and bushfires and need to risk-assess the impacts on your community and corporate services.

Council also needs to help the community be resilient in the face of climate change. Resilience is the ability to withstand and recover from climate change impacts. As an example, you could help the community grow their own food and to develop resilience plans that assist your residents and businesses in bouncing back after a disaster.

Consideration #3: Include the community

Emissions for the operations of a local government are much smaller than overall community emissions. It is not uncommon for council’s emissions to only constitute 1% of overall emissions in the LGA. It’s not enough to focus on how council itself can mitigate against and adapt to climate change; the plan also needs to incorporate the community.

Climate emergency plan for the community should be developed with the community, by involving them through surveys and workshops, and by forming environmental advisory committees.

Emissions for council operations are small in comparison to community emissions

Figure 2: Emissions for council operations are small in comparison to community emissions

Consideration #4: Everyone must act

While the Federal and State governments have the greatest levers to reduce carbon emissions, local governments are closest to their communities. They play an important role in both mitigation and adaptation.

However, a council cannot alone bear the weight of emissions reduction and adapting to climate change in a community. Householders, business and all levels of government must collaborate to achieve the goals.

Local governments are in a great position to work directly with the community and to help them with addressing climate change rapidly. Council should also lobby other local governments, the state and federal governments to be more ambitious in their climate change action.

Consideration #5: Solutions already exist – they just need to be implemented

It’s easy to defer action by claiming that in future, better solutions will exist. The fact is though, that we already have all the solutions we need to mitigate against climate change. They only need to be implemented and fast.

It’s crucial to extend the scope of a climate emergency plan to a wide area of impact categories. Key solution areas of climate emergency plans are energy efficiency, solar PV, grid decarbonisation, transport, waste, buying clean energy, consumption of goods and services, emerging technologies, governance and leadership, forestry and agriculture, climate risk, clean energy generation, stationary fuel switching, education, and planning & development.

Key solution areas of climate emergency plans

Figure 3: Key solution areas of climate emergency plans

Within those solution areas, the biggest levers to achieve emission reduction in the community are solar panels on as many roofs as possible, energy efficiency in homes and businesses, electrification of space and water heating, electric vehicles, and waste diversion from landfill.

100% Renewables are experts in developing climate action strategies, both for council operations, as well as for the community. If you need help to develop your Climate Change Strategy, please contact  Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

What you need to know about accounting for LGCs, STCs, ESCs, VEECs, ACCUs

This blog post has been updated in Dec 19 to reflect the re-branding of NCOS to ‘Climate Active’.

For many sustainability managers, navigating the many acronyms that exist for renewable energy certificates like LGCs and state-based certificate schemes like ESCs for carbon reduction activities can be confusing. Some schemes are federal; others are state-based. Some relate to energy, others to carbon. Some can be used for carbon reduction; others can’t. To make sense of these three and four-letter acronyms, we thought it was time to publish a blog post on this topic.

Renewable Energy Certificates (RECs)

Description

Once electricity from renewable sources enters the grid, it mixes with electrons from multiple sources, like coal-fired power plants, and becomes indistinguishable. To track renewable energy, Renewable Energy Certificates (RECs) are assigned for every megawatt hour created from renewables. Each REC is assigned its own unique number to track the ownership of the environmental (and social) benefits of the renewable energy. They can be traded separately from the underlying electricity.

Renewable Energy Certificates (RECs)
Renewable Energy Certificates (RECs)

Renewable Energy Certificates (RECs) were created to spur the development of renewable energy generation through a market-based mechanism of supply and demand. A REC has a financial value attached to it, which fluctuates depending on prevailing market conditions.

In Australia, RECs are supported by Australia’s Renewable Energy Target, which states that by 2020, 33,000 GWh must be generated from renewable sources (this equates to about 23.5% of the overall total). The scheme ends in 2030.

RECs are divided into Small Scale Technology Certificates (STCs) and Large-Scale Generation Certificates (LGCs).

Treatment

The party that owns the REC owns the claim to that megawatt hour of renewable energy. Renewable energy certificates are used to offset electricity consumption. They cannot be used to offset other emission sources like fuel consumption or Scope 3 emissions like waste or business travel.

Small-scale Technology Certificates (STCs)

Description

STCs are like an upfront subsidy for renewable energy systems that are under 100kW. They are deemed upfront and come with your renewable energy installation.

Treatment

Under previous Australian carbon accounting rules (Climate Active) selling the STCs (i.e., claiming the subsidy) meant that you were not allowed to account for the emission reduction. However, under revised Climate Active’s rules, behind-the-meter energy usage originating from small-scale onsite generation systems can now be treated as zero-emissions energy, regardless of whether any STCs have been created, sold or transferred to any other party. This applies to systems installed in the past as well as future installations.

As such, you can add the self-consumption of electricity from your solar PV systems to your total demand for electricity, and this generation is treated as zero-emissions electricity for your carbon footprint. You can also use the generated renewable electricity against your renewable energy target.

Large-scale Generation Certificates (LGCs) from onsite renewable energy generation

Description

If your renewable energy system is larger than 100kW, you are eligible for one LGC for every megawatt hour your solar PV system generates. As opposed to STCs, the LGCs are not deemed upfront. You need to keep track of your renewable energy generation on an annual basis to be able to create and then sell LGCs. While LGCs currently have a much higher market value than STCs, this can change in line with the supply and demand for certificates by liable entities (like electricity retailers).

Treatment

If you sell the LGCs, you will generate income. However, if you sell your LGCs, the carbon reduction and renewable energy generation associated with the energy generated cannot be claimed.

According to the Climate Active, behind-the-meter energy usage originating from large-scale onsite generation systems that have created LGCs can be treated as zero-emissions energy only if the equivalent amount of LGCs are voluntarily retired. Behind-the-meter energy usage that is not matched by an equivalent amount of voluntarily retired LGCs must be accounted for in the same way as grid-based energy, and offset accordingly if a carbon neutral strategy is pursued.

Large-scale Generation Certificates (LGCs) from offsite renewable energy generation

Description

Rather than having a system onsite, you can purchase LGCs from a renewable energy project that is grid-connected, or offsite. There are principally two options to purchase offsite LGCs – either through a Power Purchase Agreement (PPA) or through a broker.

Treatment

Large-scale Generation Certificates (LGCs) are treated the same as the purchase of GreenPower® provided the certificates are retired. If you have entered into a PPA without obtaining and retiring the LGCs (purchasing the black portion only), then you cannot claim the emissions reduction/renewable energy attributes from the project.

 

A note on surplus electricity

The treatment of surplus electricity from renewable energy and batteries from the perspective of renewable energy and carbon abatement claims is complex. You can read more about this topic in our blog post at  https://100percentrenewables.com.au/how-to-account-for-exported-solar-electricity/.

GreenPower®

Description

The GreenPower® program is an independent government accreditation scheme and is recognised as the most highly regarded standard for offsite renewables in Australia. GreenPower® purchases are additional to Australia’s Renewable Energy Target, and an extensive two-tier auditing process ensures that no double counting can occur. To purchase GreenPower®, you can approach your electricity retailer, buy from an independent provider, decoupled from your electricity agreement or through a GreenPower® PPA.

Treatment

The purchase of GreenPower® is considered to be equivalent to the direct use of renewable energy. This means that you can claim the emissions reduction associated with this action. You can also use purchased GreenPower® towards your renewable energy claims.

Australian Carbon Credit Units (ACCUs)

Description

The Emission Reduction Fund (ERF) is a voluntary scheme that provides incentives for organisations and individuals to adopt new practices and technologies to reduce their emissions. Participants can earn ACCUs for emissions reductions. The ACCUs can be sold to the Commonwealth under a carbon abatement contract with the Clean Energy Regulator, or they can be sold on the voluntary market and are eligible as offset units under the Climate Active.

Treatment

If you generate ACCUs from emissions reduction projects occurring within your boundary, you can claim the reduction as part of your carbon account only if the ACCUs from your projects are voluntarily retired. If the ACCUs are not retired, you are required to account for your emissions without the reductions associated with the projects (i.e. as though the projects had never occurred).

Carbon offsets

Description

One carbon offset represents one tonne of carbon emissions that are not released into the atmosphere, that occur as a result of a discrete project. The emissions reductions from a particular carbon offset project can be sold to enable the purchaser to claim those carbon reductions as their own. Renewable energy is one type of offset activity, but there are many others like energy efficiency or forestry projects.

Treatment

Carbon offsets can be used to offset any emission source, including ones that are not electricity related. You cannot use carbon offset for any renewable energy claims.

State-based white certificate schemes

Description

Several jurisdictions have energy efficiency schemes that require energy retailers to achieve energy efficiency in their customer portfolio. The NSW Energy Savings Scheme and the Victorian Energy Efficiency Target Scheme are the biggest in terms of number of certificates. The ACT and South Australia operate similar, but smaller schemes mainly targeting households and small business.

Energy Savings Certificates (ESCs) – New South Wales only

ESCs created under the Energy Savings Scheme (ESS) reward energy-saving projects through a financial value on every tonne of carbon that is abated by an organisation. The objective of the scheme is to reward companies that undertake projects that either reduce electricity consumption or improve the efficiency of energy use. The ESS began on the 1st July 2009 and is part of the NSW Government’s plan to cut greenhouse gas emissions. The scheme is legislated to run until 2025 or until there is an equivalent national energy efficiency scheme.

Victorian Energy Efficiency Certificates (VEECs) -Victoria only

The VEET scheme was established under the Victorian Energy Efficiency Target Act 2007 and commenced on 1 January 2009. Each VEEC represents one tonne of carbon dioxide equivalent (CO2-e) abated by specified energy saving activities known as prescribed activities. The abatement is calculated by comparing the difference between the energy use after the completion of an upgrade or project and the ‘baseline’ energy use, which refers to the amount of energy that would have been used if the energy efficient installation/project had not taken place. VEECs are bought by large energy retailers with a liability under the scheme.

Treatment of white certificate schemes

You are not required to account for state or territory-based energy efficiency schemes. Emissions reductions resulting from activities supported by these schemes can be counted towards your carbon account regardless of whether any associated certificates have been created, sold or transferred to any other party. So, in short, you can claim the ESCs/VEECs/other white certificates and the carbon reduction.

 

Carbon accounting for all these different federal and state schemes can be confusing, as may be accounting for your Scope 3 emissions. If you need an expert to help you with putting your carbon inventory together, please contact Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog. 

10 ways to ‘green’ your electricity supply

This blog post has been updated in Dec 19 to reflect the re-branding of NCOS to ‘Climate Active’.

If your organisation has already implemented a range of energy efficiency measures like changing your lighting to LED, optimising your air conditioning, and engaging your employees to be more energy efficient you may be interested in further options to reduce your carbon footprint.

A great opportunity is to look at ways of greening your electricity supply.

It seems simple, but once you start investigating you will find that there are many options available, with more emerging all the time. So, how to make sense of the growing list and choose the right one for you?

To help you with the selection, we group ten options for greening your supply into three broad categories:

Buying carbon offsets

Buying carbon offsets ties in nicely with a carbon management strategy. You can purchase carbon offsets from overseas or domestically, or from a mix of the two. If you don’t want to deal with purchasing carbon offsets, you can switch your account to a supplier that offers carbon neutral electricity, which automatically reduces your electricity-related emissions to zero. Make sure that the carbon neutral electricity is accredited to the Climate Active to ensure credibility. Currently, Climate Active-accredited carbon neutral electricity for businesses is available from only one supplier.

Installing renewables

If your roof space allows for it and you are not facing any barriers like overshadowing, you can install solar panels. Solar PV panels are ideally suited to many businesses because there is daytime demand for electricity. If sized correctly, most of the renewable energy generation can be used directly, without exporting anything to the grid.

In Australia, the Clean Energy Regulator distinguishes between small-scale (<100 kW) and large-scale generation (>100 kW).  Solar installations smaller than 100 kW are eligible to receive STCs (Small-scale Technology Certificates). STCs lower the cost of a solar installation and act like an upfront subsidy. Installations larger than 100 kW attract LGCs (Large Scale Generation Certificates). On an annual basis, you will need to keep track of the renewable energy generation to be able to sell your LGCs and get a financial return. Please note that if you sell your LGCs, you will not be able to claim the carbon reduction nor the renewable energy generation.

Buying renewables

The most straightforward way to buy renewables is to purchase GreenPower®. If you are large enough, you can also directly purchase LGCs in the spot market, but the minimum parcel size is 5,000 certificates, which is equivalent to the electricity use by a multi-storey office building. Another option which is gaining in popularity is joining a renewable energy buyer’s group, like WWF’s[1], who aggregate corporate demand to simplify the procurement process and to access cheaper rates for renewable energy.

Corporate Power Purchase Agreements (PPAs) are another alternative that is gaining traction in Australia. This is where organisations directly contract with a renewable energy developer to purchase the renewable energy. The advantages of this approach are that you can point to a particular project and claim that this is your source of renewable energy.

People and organisations also love the concept of community renewables. As an example, an organisation with a suitable roof space hosts a renewable energy project, and the community can participate by financing this project. The host agrees to buy the power at an agreed price that is lower than grid electricity, but high enough to repay the capital cost and deliver a return to investors. Your organisation can either host a project, if you have got suitable roof space, or help finance a project.

In future, there may also be an 11th option, if peer-to-peer energy trading becomes a reality. This allows producers of renewable energy to sell any surplus they have to others directly, rather than having to go through a corporate retailer, via powerful online trading platforms that handle all of the complexities of each transaction.

To compare these different options to one another, you can apply two main tests:

  • Does it meet your organisational needs?
  • What do the financials look like?

This may be a simple or a complex assessment depending on your situation. You may need to take into account your environmental objectives, staff and customer needs and perceptions, your supply chain, ongoing effort or input, and energy market considerations, and other factors relevant to your situation.

To help you get started we have summarised some of the main attributes and issues to consider. These are tabulated below. Remember, your choices to green your electricity supply are not “either-or” decisions, but can be mixed and matched to get you the best outcome.

 Claim carbon neutralityClaim 100% renewable energyLocal climate change solutionNeed suitable roof or land spaceInternal setup and administration effortPotential risksCosts and cost savings
Purchase overseas offsetsYesNoNoNoLowReputational, suitable accreditation, offset price fluctuationVery low cost, no savings
Purchase domestic offsetsYesNoYesNoLowSupply, Climate Active-accredited, offset price fluctuationLow cost, no savings
Switch to carbon neutral electricityYesNoNoNoLowOffset price fluctuationLow cost, no savings
Install: STCsYes, under upcoming NCOS rulesNo, if sold YesYesMediumSTC prices, energy price fluctuation Medium cost, medium savings
Install: LGCsOnly if retiredNo, if sold YesYesHighLGC prices, energy price fluctuationHigh cost, high savings
Purchase GreenPower®YesYesYesNoLowGreenPower / LGC price fluctuationHigh cost, no savings
Purchase LGCsYesYesYesNoMediumLGC price fluctuationHigh cost, no savings
Join buyer’s groupYesYesYesNoHighSupply, contract term, link to retail agreement, retailer willingnessPotential cost savings
Corporate PPAYesYesYesNoHighSupply, contract term, link to retail agreement, retailer willingnessPotential cost savings
Community renewablesYes, if you are hostingYes, if you are hostingYesYes, if you are hostingMediumProject cost, host tenureTypically medium investment, medium return
No, if you are investingNo, if you are investingYesNo, if you are investingMediumProject cost, host tenure Typically medium investment, medium return

 

While the qualitative and financial analysis of your options can be complex, Australia’s renewable energy and carbon markets are mature and a wide range of support is available to assist. You can obtain much of the information online, from industry bodies or government organisations. Energy market experts, solar suppliers, brokers and consultants can complement your purchasing and senior management expertise to help you take decisions that are the best fit for your organisation.

If you have discovered interesting options for greening your electricity supply, don’t hesitate to contact Barbara or Patrick for further information.

 

[1] http://www.wwf.org.au/what-we-do/climate/renewable-energy-buyers-forum#gs.AjJo7AQ