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What you need to know about the new Climate Active electricity carbon accounting rules

Are your electricity-based emissions zero because your business is based in the Australian Capital Territory, which buys 100% renewable electricity? Can you deduct the export from your 150 kW system from your electricity emissions? Can you claim the renewable energy proportion of your grid supply? Is the electricity that is being generated from your 99 kW solar system emissions-free, even though you availed yourself of the STC discount? Are your emissions from electricity zero because you just entered into a 100% renewable energy Power Purchase Agreement? Can you deduct GreenPower® purchases from your electricity emissions?

While there are no clear frameworks (other than the GHG Protocol) on how to properly account for electricity-based emissions and their reductions in some countries, we are in a much better position in Australia.

Here, we have the mandatory Renewable Energy Target, which provides the framework for Renewable Energy Certificate creation, and we have a mandatory (NGER) and voluntary (Climate Active) reporting system for emissions.

Climate Active has recently released guidance on how to account for electricity-based emissions and reduction measures, allowing you to get recognition for your renewable energy projects.

The Clean Energy Regulator, which administers the NGER system, is also consulting on the design of a new Corporate Emissions Reduction Transparency report (CERT). If you are a large emitter reporting under NGER, you will be able to show how you are meeting your emissions reduction goals.

Let’s have a look at the new Climate Active rules for accounting for electricity emissions and reduction measures.

New Climate Active rules for carbon accounting for electricity

The Climate Active team recently released a set of rules which are based on best-practice principles in the Greenhouse Gas Protocol Scope 2 Guidance and stakeholder consultation. The new framework applies to annual Climate Active reports from calendar year 2021 and financial year 2020/21 onwards.

One of the most significant changes is that you now need to report both your location and market-based electricity emissions, which is called ‘dual reporting’. If you are reporting under CDP, you will be familiar with this concept.

You must use dual reporting for Climate Active organisation, simple service, building, precinct and event certifications, while you can choose to use a dual reporting method for  product and complex service certifications. You can select either the location- or market-based approach as the primary electricity accounting method, which will determine the number of offsets required to go carbon neutral under Climate Active.

Location- and market-based approach to accounting for electricity emissions

In carbon accounting, one of the most important and largest sources of emissions is the consumption of electricity, which is accounted for under scope 2.

According to the Scope 2 Guidance of the GHG Protocol, there are two distinct methods for scope 2 accounting, which are both useful for different purposes. The methods used to calculate and report scope 2 emissions impact how a company assesses its performance and what mitigation actions are incentivised. When used together, they can provide a fuller documentation and assessment of risks, opportunities and changes to emissions from electricity consumption over time.

The location-based method

This method reflects the average emissions intensity of the grid, based on your company’s location. This method allows you to calculate emissions that you are physically emitting to the atmosphere. So, if your business is located in the ACT, which is 100% renewable, you will still have to apply the NSW grid’s emissions factor, as you are getting your electricity from NSW power plants. The location-based method does not allow for any claims of renewable electricity from grid-imported electricity use.

The only way you can reduce electricity emissions using the location-based method is to site your business in an area where the electricity from the grid has lower emissions (e.g. Tasmania, or New Zealand), to reduce your electricity consumption, or to install behind-the-meter renewable energy systems. Buying renewables will not be recognised under the location-based method.

The market-based method

The market-based method reflects the emissions that you are responsible for from the electricity you purchase, which may be different from the electricity that is generated locally. This method derives emission factors from contractual instruments, such as the purchase of GreenPower®, RECs/LGCs, or bundled renewable energy power purchase agreements. It uses a ‘residual mix factor’ (RMF) to allow for unique claims on the zero-emissions attribute of renewables without double-counting.

Under the market-based approach, you can reduce your electricity-based emissions by being more energy-efficient, by installing onsite renewables and shifting your electricity supply to renewables.

You can choose which method total – market-based, location-based or both—to use for performance tracking and must disclose this in your inventory.

The following sections go through the details of how to treat onsite generation, the export of renewables, the treatment of renewable energy certificates, the purchase of renewables and carbon-neutral electricity.

Treatment of Renewable Energy Certificates

Renewable Energy Certificates consist of Large-scale Generation Certificates (LGCs), from solar PV systems greater than 100 kW, and Small Technology Certificates (STCs), from small-scale solar PV systems of less than 100 kW.

One renewable energy certificate equates 1 MWh of renewable energy generation. You can find more information about these certificates in this blog post.

You can use LGCs to reduce reported electricity emissions under the market-based method, but not STCs.

Market-based method

  • You can use LGCs as a unique claim on the zero-emissions attribute of renewable generation within a Climate Active carbon account (meaning you can deduct retired LGCs from your electricity emissions).
  • You can only use LGCs to account for electricity-based emissions, e.g. direct grid-based electricity (scope 2) or indirect emissions sources (scope 3) consisting entirely of electricity, such as third-party operated data centres, or streetlighting.
  • You must retire LGCs on the Renewable Energy Certificate Registry, with evidence of their retirement, including serial numbers, provided to Climate Active.
  • You should directly retire LGCs in the name of the claimant, for example, ‘Retired on behalf of Company X for 2020 Climate Active carbon-neutral claim’.
  • You may retire LGCs indirectly on behalf of the claimant, for example, by GreenPower®. You should provide serial numbers to Climate Active.
  • In instances where you cannot provide discrete LGC serial numbers, Climate Active may consider accepting other evidence that LGCs have been retired, for example, certificates provided by an electricity generator or electricity bills listing accredited GreenPower® usage.
  • LGCs must have an issuance date of less than 36 months from the end of the reporting year; for example, a calendar year 2020 report (ending 31 December 2020) could use LGCs with an issuance date of no earlier than 1 January 2018.
  • You cannot use STCs to make renewable energy emission reduction claims for grid imported electricity consumption.

Location-based method

  • Neither LGCs nor STCs can be used to make renewable energy emission reduction claims for grid-imported electricity consumption.

Renewable Energy Target

The Renewable Energy Target (RET) is a legislated scheme designed to reduce emissions from the electricity sector and incentivise additional electricity generation from sustainable and renewable sources. The RET consists of two different schemes: the large-scale renewable energy target (LRET) and the small-scale renewable energy scheme (SRES). Your can account for your investments in the LRET under the market-based method.

Market-based method

  • The percentage of electricity consumption attributable to the LRET, as reflected by the Renewable Power Percentage, for a given reporting year, is assigned an emission factor of zero in the carbon account. For example, a business using a total of 1,000 MWh of electricity in 2019, lists 186 MWh as zero emissions (1,000*18.6% (RPP for 2019)).
  • This deduction is not available to you if you are exempt from the LRET (i.e. Emissions Intensive Trade Exposed Industries).

Location-based method

  • There is no separate accounting treatment for the LRET as it is already included in the state emissions factors.

GreenPower®

GreenPower® is an easy way to switch your electricity supply to renewables that are additional to the Renewable Energy Target. If you need more information on how GreenPower® works, please read the GreenPower Guide for Businesses we developed for the GreenPower® program.

You can also obtain accredited GreenPower® under your renewable energy PPA. For more information, please read our GreenPower® PPA blog post.

You can account for your GreenPower® purchases using the market-based method.

Market-based method

  • Accredited GreenPower® usage is assigned an emission factor of zero in your carbon account, regardless of the state in which you are using GreenPower®.
  • GreenPower® use in excess of what is required to account for your direct electricity usage may be used to reduce your other indirect entirely electricity-based emissions (e.g., data centre usage, streetlighting).
  • GreenPower® use in excess to what is required to account for your entire electricity usage cannot be used to offset other non-electricity emission sources in your carbon account (such as, for instance, emissions from your fleet).

Location-based method

  • You cannot use GreenPower® purchases to make zero-emission electricity claims under the location-based method.

Renewable energy Power Purchase Agreements

Renewable energy Power Purchase Agreements (PPAs) are a great way to cost-effectively increase the renewables proportion of your electricity supply. They also allow you to switch your entire electricity to 100% renewables, thus bringing your electricity-based emissions to zero. However, just like with LGCs described above, you need to retire LGCs associated with your PPA to be able to claim the emissions reduction and renewable energy generation.

Market-based method

  • You need to retire LGCs above any mandatory LRET obligations to claim zero emissions for your electricity consumption.
  • Where you cannot be listed on the REC Registry, you need to supply other evidence to the Climate Active team from the retiring body, such as certificates from the electricity provider.
  • You cannot use supplier-specific emissions factors.

Location-based method

  • You cannot use retired LGCs, including under PPAs, to make zero-emissions claims under the location-based method.

Local renewable energy generation

One of the best ways to reduce electricity consumption other than reducing your consumption is to install solar panels or other renewable energy generation systems where your circumstances allow it. If you directly consume electricity from a renewable energy system, it is called a ‘behind the meter’ system.

You can account for behind-the-meter use of renewable generation systems under both the location- and the market-based method. However, you can only account for exported electricity under the market-based method.

Market-based method

  • Behind-the-meter use of electricity from large scale systems may be reported and assigned an emissions factor of zero in your carbon account, only if you retire any LGCs associated with that generation or not create any. An example of when you don’t create any LGCs is when you install a large-scale system, and you choose not to generate any LGCs.
  • If you are creating and selling LGCs, you must treat behind-the-meter usage from large-scale systems the same as electricity consumption from the grid (that is, treated as residual electricity).
  • You may report and assign behind-the-meter use of electricity from small-scale systems an emissions factor of zero in your carbon account, regardless of whether you have created, transferred or sold any STCs associated with this generation.
  • You need to convert exported electricity from renewable systems into an emissions reduction equivalent and net from gross emissions. You can achieve this by multiplying exported electricity by the national scope 2 electricity factor only (to account for transmission losses) for the year of the generation. You must retire any LGCs or not create any. You don’t need to retire any STCs associated with this generation.

Location-based method

  • You may report behind-the-meter use of electricity from large scale systems as zero emissions in your carbon account, provided you retired any LGCs associated with that generation or did not create any.
  • If you create and sell LGCs, you must treat behind-the-meter use from large scale systems the same as electricity consumption from the grid.
  • You may report behind-the-meter use of electricity from small-scale systems as zero emissions in your carbon account, regardless of whether you have created, transferred or sold any STCs associated with this generation.
  • Under the location-based method, you can’t use exported electricity as a reduction in electricity emissions.

Jurisdictional renewable energy targets

Market-based method

  • If you are operating in a jurisdiction where the government retires LGCs (such as, for instance, in the ACT), you can claim the corresponding percentage of emissions impact on your electricity consumption as zero, provided that the LGCs are retired on behalf of the jurisdictions’ citizens and the claim is auditable for the given reporting year.

Location-based method

  • There is no separate accounting treatment, as the emissions benefit is already included in the state factors used to convert electricity consumption into its emissions equivalent.

Climate Active certified carbon-neutral electricity

Market-based method

  • You can convert Climate Active certified carbon neutral electricity into its emissions equivalent and deduct it from the gross carbon account offset liability.
  • You can convert by applying the relevant emission factor for the particular brand of carbon-neutral power.

Location-based method

  • Same rules

Grid-imported (residual) electricity

Market-based method

  • You need to convert electricity usage not matched by zero-emissions electricity attribute claims (residual electricity) into t CO2-e using the RMF according to the below formula: RMF = National EF / (1 – RPP) RMF (residual mix factor), EF (emission factor), RPP (renewable power percentage), e.g. in 2019, the RMF equals: = 0.88 (national scope 2 and 3 EF)/ 0.814 (18.6% RPP) = 1.08 Financial year reports will use the average of the RMF across the relevant calendar years, reflecting the RPP of each 6-month period. While this sounds complicated, Climate Active have electricity calculators that help with calculating the associated emissions.

Location-based method

  • You need to convert electricity use in each state of your operations into t CO2-e using the relevant state NGA factor (either scope 2 and scope 3; or the full fuel cycle factor).
  • The emissions factor used should correspond to the reporting year where possible, i.e. a 2018 reporting year should use the 2018 NGA factors.

If you are interested in the development of a Climate Active carbon inventory for your organisation that takes into account scope 3 emissions and properly accounts for electricity-based emissions/reductions, please consider contacting us. Two of our staff are registered consultants with Climate Active, and we can guide you through the process of achieving certification or developing a Climate Active-ready carbon inventory. If you would like more information, please download our Climate Active brochure, or 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.

NSW as a renewables superpower and what must be done to reach net-zero emissions [with video]

Last week, I presented on ‘NSW as a Renewables Superpower and What Must Be Done To Achieve Zero Carbon Emissions’ at the 13th Energy Storage World Forum Virtual Conference.

You can watch a 15-min-video of my presentation here, which includes information about the newly released New South Wales Electricity Infrastructure Roadmap:

What is Australia’s emissions trend?

At the moment, Australia is emitting roughly 530 million tonnes of carbon emissions annually. Please see below Figure 1, which shows Australia’s historical emissions. To put this into perspective, it means that every year, each Australian resident is responsible for about 21 tonnes of emissions. This is roughly four times higher than the global average of about 5 tonnes.

Australia's historical emissions (Source: Quarterly Update of Australia's National Greenhouse Gas Inventory | National inventory total, year to June 2000 to year to March 2020)
Figure 1: Australia’s historical emissions (Source: Quarterly Update of Australia’s National Greenhouse Gas Inventory | National inventory total, year to June 2000 to year to March 2020)

What is interesting to see in this graph is that our emissions in 2020 are about on the same level as they were in 2000. Is this good enough? Let us have a look at global emissions.

Where are we now and where do we need to be?

Despite the increased focus on climate change in the last few years and the milestone Paris Agreement, global greenhouse gas emissions have not reduced, and the emissions gap between where we should be and where we are is larger than ever. The main driver of long-term warming is the total cumulative emissions of greenhouse gases over time. In the past decades, greenhouse gas emissions have been increasing.

Due to all historical and current carbon emissions, global temperatures have already risen by about 1°C from pre-industrial levels. Continuing with business as usual could result in a temperature increase of over 4°C.

If all countries achieved their Paris Agreement targets, it could limit warming to roughly 3°C. However, to limit warming to 1.5°C, current Paris pledges made by countries are not enough.

Carbon emissions need to decline at a much steeper rate in the near future and reach net-zero by mid-century to have a chance of keeping warming to below 1.5°C. Please see Figure 2 below.

Global warming projections
Figure 2: Global warming projections

Australia has committed to a 26-28% GHG emission reduction by 2030 from 2005 levels. This is not ambitious enough for a 1.5-degree pathway. Also, as a country, we have not committed to net-zero emissions by mid-century, which is where we need to be. However, all states and territories have committed to this target, which effectively means that Australia has a net-zero target.

With most of Australia’s major trading partners having now committed to a net-zero emissions target by around mid-century, and with a new US President-elect who seems likely to increase America’s climate ambitions, perhaps the Australian Government will eventually follow suit. We’ve heard in recent days that the Government may abandon plans to use Kyoto carryover credits to meet its targets, which is a good start if true.

Australia's commitments, 100% Renewables
Figure 3: Australia’s commitments, 100% Renewables

We will see what happens with our national emissions targets in time.

Let’s have a look at Australia’s emissions projection. Under 2019 projections, we will end up with 500m tonnes of carbon emissions in 2030, some 30m lower than our current levels. Under our Nationally Determined Contribution to the Paris Agreement, we need to reach a 26-28% reduction by 2030. This is not anywhere near where we need to be to keep temperature increase to safe levels.

Australia's emissions projection (Source: Australia's emissions projections 2019, Department of Industry, Science, Energy and Resources)
Figure 4: Australia’s emissions projection (Source: Australia’s emissions projections 2019, Department of Industry, Science, Energy and Resources)

However, the good news is that even without policies and targets, the renewables share of electricity will grow, because we have reached the point where renewables are cheaper than fossil fuels.

For many years, we have not done enough. Now, we need to catch up on the years in which we have procrastinated. And rapidly.

NSW as the new renewables superpower

In March this year, the NSW Government released the Net Zero Plan Stage 1 and the Electricity Strategy. NSW officially committed to a 35% reduction in emissions by 2030 and to reaching net-zero by 2050. The focus of the plan is on emissions reduction across key sectors, such as energy, transport, waste, agriculture, mining and carbon finance. The net-zero plan and the electricity strategy will create thousands of new jobs and billions of dollars in new generation and transmission investment in NSW, mostly in regional areas.

A few days ago, the NSW Electricity Infrastructure Roadmap was released, which will establish NSW as a renewable superpower through a coordinated approach to transmission, generation and storage of renewable energy in the State in the coming decades.

NSW's plan to achieve net-zero by 2050
Figure 5: NSW’s plan to achieve net-zero by 2050

Over the next 15 years, four of the five NSW coal power stations are expected to close. These four power stations account for three-quarters of NSW’s electricity supply! As you can see in Figure 6, the closed power plants will leave a gap in electricity generation.

The exciting news is that this gap will be filled by renewable energy generation. NSW will develop several Renewable Energy Zones, enabled by a Transmission Development Scheme, which will have a combination of solar, wind and pumped hydro generation. The infrastructure needed to replace power stations has long lead times, and the Central-West Orana is the first pilot REZ that is currently being developed. Central-West Orana, New England and the South West Renewable Energy Zones will contribute 12 Gigawatts of generating capacity and 3 Gigawatts of firm capacity by 2030, and even more over the long term.

Scheduled coal plant closures and Renewable Energy Zones (Source: AEMO, 2020 Integrated System Plan, July 2020)
Figure 6: Scheduled coal plant closures and Renewable Energy Zones (Source: AEMO, 2020 Integrated System Plan, July 2020)

These renewable energy zones will contribute greatly to grid decarbonisation, which means that over time, the electricity we consume will increasingly come from renewables rather than fossil fuels.

However, this transition will take time. And we can’t rely on governments doing all the work. Everyone needs to act, countries, companies and communities. So, what can you do in your organisation and as an individual to track towards zero emissions?

To answer this question, we first need to take a look at where our emissions are coming from.

Where do our emissions come from?

The biggest part of our emissions is electricity generation, which at the moment comes mostly from fossil fuel power plants. The next most significant contribution is stationary energy consumption, such as burning natural gas. The next highest contributor is transport, which is driving cars, moving goods in trucks, and flying, for example.

Emissions contribution by sector (Source: Quarterly Update of Australia's National Greenhouse Gas Inventory | Figures and Tables for the March Quarter 2020 )
Figure 7: Emissions contribution by sector (Source: Quarterly Update of Australia’s National Greenhouse Gas Inventory | Figures and Tables for the March Quarter 2020 )

Fugitive emissions are mostly methane emissions lost to the atmosphere during coal and gas mining activities and transporting gas. Industrial processes and product use emissions come from industrial activities which are not related to energy, such as cement & lime, metal and chemicals production, as well as from hydrofluorocarbons used as refrigerant gases and other synthetic gases.

Agriculture emissions come from fertiliser usage and growing animals such as sheep and cows. Bill Gates has said that if cattle were a country, they would sit behind China and the US in greenhouse gas emissions.

Waste emissions come mainly from the decomposition of waste in landfill, whereas LULUCF emissions are land-use and land-use change and forestry. In Australia, these emissions are negative, as they are a carbon sink.

What can we do to reduce our emissions to net-zero?

The emissions reduction task is a combination of a small number of significant measures that are happening to reduce the emissions of primary inputs to goods and services, and the actions that individual businesses and consumers can take to reduce their carbon footprint.

There is some heavy lifting that happens independent of consumers.

Heavy lifting that happens independent of consumers
Figure 8: Heavy lifting that happens independent of consumers

Grid decarbonisation

The most prominent example is grid decarbonisation or the ‘greening of the grid’. Coal-fired power plants are being replaced with renewable energy in all Australian states. Just this week, Victoria announced $540million in the budget to develop six renewable energy zones, and Tasmania wants to be 200% renewable by 2040.

Green hydrogen

There is also a big push for green hydrogen in nearly every State, which could potentially replace natural gas over time. The NSW Net Zero Plan is aiming for hydrogen to supply up to 10% of current natural gas demand by 2030.

Biomethane

Biomethane is gas being produced from renewable sources, rather than extracting natural gas.

Reforestation

Reforestation means planting more trees, which reduces carbon dioxide in the atmosphere.

Green steel

Green steel is made by using hydrogen, rather than coal, to strip the oxygen out of iron ore. The by-product is water rather than carbon dioxide. At this time, ThyssenKrupp plans to build a 1.2 million tonne per annum green steel plant in Germany by 2025.

Methane reduction

Cows produce a lot of methane, which can potentially be reduced by up to 80% by introducing seaweed into their feed, based on research being led by CSIRO.

Waste management

One of the ways we can deal with the waste problem is to treat the waste as a resource in waste-to-energy plants.

Sequestration of fugitive emissions

Sequestration of emissions resulting from the extraction and production of LNG is a significant challenge but one which will hopefully improve in coming years.

Most businesses and consumers will benefit from these upstream and downstream changes in terms of their carbon footprint. But rather than rely solely on these changes, some of which may take decades, business and individuals can act themselves to reduce their carbon footprint faster.

What emission sources can you influence?

Every day, you are consuming electricity, and most of you probably use natural gas as well, whether for industrial process heating, air conditioning or cooking. Everyone needs to get from point A to B. Sometimes, we use our cars, sometimes we fly. And we transport our goods using trucks, ships and trains. Everyone consumes goods and services daily, and our consumer choices influence emissions. And we all produce waste.

So how can we reduce our emissions to net-zero?

Achieving zero carbon emissions from a consumer’s perspective

  • Be more energy efficient – we can we more energy efficient, for instance by turning off equipment when it’s not needed, or by replacing old, inefficient equipment, with new, energy-efficient ones.
  • Install solar – where we can, we should install solar. It reduces our emissions immediately, and it is cost-effective. And in future, battery storage will be more cost-effective as well, which will allow us to scale up our solar ambition and take more control over our energy supply and risk.
  • Buy renewable energy – we can choose where the electricity we are buying comes from. We can consciously choose to purchase renewable energy. Bigger organisations can do that via Power Purchase Agreements; smaller consumers can elect to procure GreenPower®.
  • Sustainable transport – we can buy efficient, low- and zero-emissions vehicles and implement EV infrastructure such as charging points. Even bigger trucks can be electrified, which you can see in these pictures here. Using video conferencing also helps to reduce emissions.
  • Less waste – we can reduce our emissions from waste simply by consuming less, by recycling more and by fostering a circular economy, in which the waste of one organisation can be a resource for another business.
  • Sustainable procurement – we can make more sustainable buying decisions and purchase carbon-neutral products, or products that were made from renewable sources, that can be recycled, or composted.
  • Go carbon neutral – on our journey to net-zero, we can invest in carbon offsets to finance projects that support emissions reduction or sequestration.
  • Leadership and governance – and perhaps most importantly, we can show leadership. We can implement all the solutions I’ve talked about earlier and then share our stories with others so that they can learn from our experience. Don’t’ be a follower, be a leader or at least a fast follower.

A challenge for you

I’d like to challenge you today to rethink your carbon footprint. Both your own and the one of the organisation you work for.

Here is my challenge to you:

  1. Switch your electricity supply to 100% renewable energy if you can
  2. Walk and cycle more. It will be good for your health!
  3. Consider a more sustainable diet

 

100% Renewables are experts in helping organisations develop their climate action strategies and plans, and supporting the implementation and achievement of ambitious targets. If you need help to develop your Climate Action 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.

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.

5 ways of visualising emission reduction pathways

Many of our services involve the development of emission reduction pathways, which greatly enhance climate change action plans. In this blog post, we will show you 5 common ways to visually display such a pathway. Seeing these different illustrations can help you to shape how you would like to present your own organisation’s pathway towards a low carbon future.

Introduction

What are emission reduction pathways?

Emission reduction pathways allow for the easy communication of

  • where your organisation is currently at in terms of greenhouse emissions (or energy consumption)
  • where you can be through the implementation of reduction measures that are feasible and cost-effective over time
  • where you would be in the absence of any measures to reduce emissions

Pathways usually start with your selected baseline year and end at some point in the future, typically at 2030, or when agreed or proposed targets are to be met.

What do emission reduction pathways cover?

Boundary:

Your emissions boundary will typically consider three things:

  • The level of an organisation or region you want to assess in terms of emissions reduction. This could be a single site, an asset class (e.g. community buildings), a Division in an organisation, a whole organisation, a town or community, and up to State and National levels.
  • The emissions and energy sources that you want to evaluate. For example, electricity, natural gas, petrol, diesel, refrigerants, waste, wastewater and so on.
  • The Scopes of emissions you want to include. Typically Scope 2 (electricity) is included, and material Scope 1 emissions (on-site combustion or direct emissions). Selected Scope 3 emissions may also be included, such as upstream emissions associated with energy usage and waste.

Units of measure:

The unit for reductions or savings to be modelled will typically be tonnes of greenhouse gas emissions, or a unit of energy, such as kilowatt-hours or megajoules.

What greenhouse gas reduction measures are considered in abatement pathways?

For most organisations greenhouse gas reduction measures usually relate to six high-level carbon abatement areas as shown in Figure 1 below, being

  • Energy efficiency
  • Management of waste and other Scope 3 emissions sources
  • Sustainable transport
  • Local generation of renewable energy such as rooftop solar PV
  • Grid decarbonisation
  • Buying clean energy and/or carbon offsets

These high-level categories can be further broken down into as many subcategories as relevant within your selected organisation boundary.

Figure 1: 6 categories for carbon reduction opportunities

The need for a graphical representation of emissions pathways

For many people, it is hard to engage with complex data presented in a table or report. In our experience, it is most effective if abatement potential can be shown in a graph. The visual representation of a carbon abatement pathway allows people to better grasp the overall opportunity for abatement, where this will come from, and the timeframes involved.

It also helps organisations to better communicate their plans to their stakeholders, be they internal or external. Simple and well-presented graphics can also help when seeking decisions to budget for and implement cost-effective measures.

5 ways to graphically represent emission reduction pathways

There are many different ways you can display an emissions reduction pathway; some are more suited to specific circumstances than others. The five examples we are using in this blog post are:

  1. Line chart
  2. Waterfall chart
  3. Area chart
  4. Column chart
  5. Marginal Abatement Cost Curve (MACC)

Let’s look at these examples in detail.



Example #1 – line chart

A line chart is a simple but effective way to communicate a ‘Business-as-usual’ or BAU pathway compared with planned or target pathways at a total emissions level for your selected boundary. Such a boundary could be comparing your whole-business projected emissions with and without action to reduce greenhouse gases.

This type of graph is also useful to report on national emissions compared with required pathways to achieve Australia’s Paris commitments, for example.

Figure 2: Example of a line chart

Example #2 – waterfall chart

A waterfall chart focuses on abatement measures. It shows the size of the abatement for each initiative, progressing towards a specific target, such as 100% renewable electricity, for example. It is most useful to highlight the relative impact of different actions, but it does not show the timeline of implementation.

Figure 3: Example of a waterfall chart

Example #3 – area graph

Area graphs show the size of abatement over time and are a great way to visualise your organisation’s potential pathway towards ambitious emissions reduction targets.

They do not explicitly show the cost-effectiveness of measures. However, a useful approach is to include only measures that are cost-effective now and will be in the future, so that decision-makers are clear that they are looking at a viable investment plan over time to lower emissions.

Figure 4: Example of an area chart that shows reduction actions and diminishing emissions

Another option of displaying an area chart is shown in Figure 5. In this area chart, the existing emission sources that reduce over time are not a focus, and instead, the emphasis is on emission reduction actions. You may prefer this version if there is a large number of reduction measures, or if you include fuel switching actions.

Figure 5: Example of an area chart which emphasises emission reduction actions



Example #4 – column graph

A column graph is similar to the area graph but allows for a clearer comparison between specific years compared with the continuous profile of an area graph. In the example column graph below, we are looking at Scope 1 and Scope 2 emissions, as well as abatement in an organisation over a 25-year timeframe covering past and future plans.

In the historical part, for instance, we can see Scope 1 (yellow) and Scope 2 (blue) emissions in the baseline year. The impact of GreenPower® (green) on emissions can be seen in any subsequent year until 2018.

Going forward we can see in any projection year the mix of grid decarbonisation (red), new abatement measures (aqua) including fuel switching and renewables purchasing, as well as residual Scope 1 and 2 emissions.

Figure 6: Example of a column chart

Example #5 – Marginal Abatement Cost (MAC) Curve

MAC curves focus on the financial business case of abatement measures and the size of the abatement. MAC curves are typically expressed in $/t CO2-e (carbon), or in $/MWh (energy), derived from an assessment of the net present value of a series of investment over time to a fixed time in the future.

The two examples below show MAC curves for the same set of investments across an organisation. Figure 6 shows the outcome in 2030, whereas, in Figure 7, it is to 2040 when investments have yielded greater returns.

MAC curves are a good way to clearly see those investments that will yield the best returns and their contribution to your overall emissions reduction goal.

Figure 7: Example of a Marginal Abatement Cost curve with a short time horizon

Figure 8: Example of a Marginal Abatement Cost curve with a longer time horizon

Please note that no one example is superior over another. It depends on your preferences and what information you would like to convey to your stakeholders.

100% Renewables are experts in putting together emission reduction and renewable energy pathways. If you need help with determining your strategy, targets and cost-effective pathways, 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.

Shrinking your combined load profile [includes video]

In June, Barbara, our Co-CEO, presented at the Renewable Cities Australia conference at the International Convention Centre in Sydney. The topic of her talk was ‘Reaching ambitious energy efficiency and renewables’.

At the core of her speech was a demonstration of how the combined load profile of a typical metropolitan local council changes after the implementation of energy efficiency and onsite renewable energy.

Please note that a video of the ‘shrinking load profile’ is included at the bottom of this post.

What is a load profile?

A load profile shows how your energy demand changes over a 24-hour period, from meter data that your energy retailer can provide on request or via a web portal linked to your account.

Meter data starts and ends at midnight and is usually in half-hour or 15-minute intervals. The vertical axis shows your energy demand in kilowatts as it changes over this time. The less your energy demand, the lower the curve.

A load profile can also be called ‘interval data’ and is a very useful tool for analysing your energy consumption. For example, a load profile can identify equipment that is running unnecessarily at night or may show you spikes in your energy consumption that hint at inefficient operation of equipment. Changes in your profile from summer to spring or autumn can give you an idea of the energy use needed for cooling in a building.

You use load profiles to help you identify how you can be more energy efficient, and they can also help you to size your solar PV installation.

What is a combined load profile?

A combined load profile adds the demand for all your sites to show you the overall energy demand of your organisation. This information is particularly important when you buy energy via a renewable energy Power Purchase Agreement that is supply-linked.

Building up a combined load profile

In this blog post, we build a combined load profile for a metropolitan local government. Figure 1 shows the combined demand of small sites, like small libraries, amenities blocks, community halls and childcare centres.

Energy demand typically rises sharply in the morning as people start to use these facilities, and it falls as people leave them in the evening. At night there is usually demand for appliances, small servers and emergency and exit lights.

Figure 1: The energy demand of small sites



Now, we are adding the electricity demand for large sites on top of the small sites. Examples for large sites are central administration offices & chambers, depots and aquatic centres. Night demand for depots and offices may be low with good after-hours controls. However, pools are usually heated all the time and can be energy-intensive at night.

Figure 2: The energy demand of large sites

The surprising thing for metropolitan councils is that most of the energy demand happens at night, through streetlighting, which runs from dusk until dawn. Streetlights can consume as much as half of a metropolitan council’s electricity! This creates a combined profile with high demand at night and a big dip in demand during the day.

Figure 3: The energy demand of streetlighting

Lastly, we add parks and sporting fields. Most of the energy demand for sporting fields is lighting and irrigation, so naturally, this demand also occurs from late in the evening (sporting field lights) to early morning (irrigation).

Figure 4: The energy demand of parks, ovals and fields

The impact of onsite energy efficiency and renewable energy measures on the combined demand profile

Now that we have a load profile that aggregates energy demand across all sites, let’s implement onsite abatement measures such as energy efficiency and solar PV.

So that you can see the impact of these measures, we are providing a visual cue to show you where our starting line is, because now we start subtracting.

Figure 5: Implementing onsite measures



Energy efficient lighting for parks and sporting fields

LED lighting replacements and smart controls for parks, ovals and fields can lead to a 40-70% reduction in energy demand. At the same time, you may improve your service provision through better lighting, more activated fields and higher utilisation. The net benefit is shown in Figure 6. A reduction in energy demand brings down the whole load profile from the starting point.

Figure 6: Lighting replacement for parks, ovals and fields

Figure 7 shows the impact of a bulk upgrade to LED lighting for local roads. LED streetlights are 60-80% more energy efficient than older technologies such as Compact Fluorescents or Mercury Vapour.

Figure 7: Streetlighting upgrade for local roads

Figure 8 shows the impact of a bulk upgrade to LED lighting for main roads, with similar levels of savings as local roads. Smart controls such as dimming can further increase savings for streetlights.

Figure 8: Streetlighting upgrade for main roads

Implementing energy efficiency improvements to lights, air conditioning, IT systems, appliances, motor systems and building controls at your facilities can achieve at least a 10% reduction, but more might be achievable. It depends on your individual circumstances and what measures you have implemented in the past.

Figure 9: Energy efficiency at Council sites

Installing onsite solar PV

Figure 10 shows the impact of installing onsite solar PV at your sites. You can see the dip in the load profile in the middle of the day, as the solar energy generation reaches its maximum.

Figure 10: Impact on Solar PV

Battery storage will allow further savings in your electricity and peak demand. Figure 11 illustrates how stored solar energy can reduce a building’s peak demand in the afternoon when peak demand charges might apply, thus reducing power bills.

Figure 11: More Solar PV and battery energy storage



What the load profile was and what it could be

So, we have implemented a number of cost-effective efficiency and renewable energy measures, and we can see that demand has reduced significantly. Figure 12 shows what the load profile looked like before implementation of any actions, and what it could be through energy efficiency and onsite solar PV.

Before you think about switching your electricity supply to offsite renewables (e.g. through a Power Purchase Agreement), you should consider the changes behind-the-meter measures like energy efficiency and solar PV can make to your energy demand, and how this can lower the amount of energy you need to buy over time.

Figure 12: Summary of what load profile is and what it could be

Switching your electricity supply to renewables

Figure 13 shows what remains of your original load profile. The next step will be to switch from conventional electricity supply to 100% renewable energy. This can be staged over time or may be possible all in one go.

Figure 13: Offsite opportunities like PPAs

Goals achieved!

In our experience, by implementing onsite energy efficiency and renewable energy measures, you can save 30-40% in electricity demand. By switching your supply to renewables, you can also achieve 100% renewable energy.

Figure 14: Goals Achieved!

You can watch a video of the shrinking load profile here:

Would you like to see how much you could reduce your load profile?

100% Renewables are experts in helping organisations develop their renewable energy strategies and timing actions appropriately. If you need help with analysing your load profile and with developing your renewable energy plan, 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.

Science-based targets in a nutshell [with video]

Target-setting in line with science

In 2015, close to 200 of the world’s governments committed to prevent dangerous climate change by limiting global warming to well below 2°C in the landmark Paris Agreement. However, total human-caused carbon emissions continue to increase. Under current trajectories, global mean temperatures are projected to grow by 2.2°C to 4.4°C by the end of this century.

Your organisation has a pivotal role in ensuring that the global temperature goals are met, but most existing company targets are not ambitious enough to achieve this.

What are science-based targets?

Science-based targets (SBT) are greenhouse gas emissions reduction targets that are consistent with the level of decarbonisation that is required to keep global temperature increase within 1.5 to 2°C compared to pre-industrial temperature levels.

SBTs are consistent with the long-term goal of reaching net zero emissions in the second half of this century as per the Paris Agreement. SBTs provide a trajectory for companies to reduce their greenhouse gas (GHG) emissions.

The Science-Based Targets initiative (SBTi)

The SBTi is a collaboration between CDP, the United Nations Global Compact (UNGC), World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The SBTi enables you to demonstrate your climate change leadership by publicly committing to science-based GHG reduction targets.

The overall aim of the initiative is that by 2020 science-based target setting will become standard business practice and corporations will play a major role in ensuring we keep global warming well below a 2°C increase.

Components for science-based target-setting methods

SBT target-setting methods are complex and should be considered in the context of your operations and value chains. Generally, science-based target-setting methods have three components:

  • Carbon budget (defining the overall amount of greenhouse gases that can be emitted to limit warming to 1.5°C and well-below 2°C),
  • An emissions scenario (defining the magnitude and timing of emissions reductions) and,
  • An allocation approach (defining how the carbon budget is allocated to individual companies).

Target setting approaches

There are three science-based target (SBT) setting approaches. As defined by SBTi:

  1. Sector-based (convergence) approach: The global carbon budget is divided by sector, and then emission reductions are allocated to individual companies based on its sector’s budget.
  2. Absolute-based (contraction) approach: The per cent reduction in absolute emissions required by a given scenario is applied to all companies equally.
  3. Economic-based (contraction) approach: A carbon budget is equated to global GDP, and a company’s share of emissions is determined by its gross profit since the sum of all companies’ gross profits worldwide equate to global GDP.

The SBTi recommends that companies screen available methods and choose the method and target that best drives emissions reductions to demonstrate sector leadership. You should not default to the target that is easiest to meet but should use the most ambitious decarbonisation scenarios and methods that lead to the earliest reductions and the least cumulative emissions.

An SBT should cover a minimum of 5 years and a maximum of 15 years from the date the target is publicly announced. Companies are also encouraged to develop long-term targets (e.g. out to 2050).

It is recommended that you express targets in both intensity and absolute terms, to track both real reductions in emissions and efficiency performance.

More information about the ‘absolute-based target setting’ approach

This method requires you to reduce your absolute emissions by the same percentage as required for a given scenario (e.g. globally or for a sector). If you are setting your SBT today, you would be strongly encouraged to adopt absolute abatement targets well in excess of 4% per year to be aligned with limiting warming to 1.5°C.

As an alternative to setting percentage reduction targets for Scope 2 emissions (electricity consumption), you can set targets for the procurement of renewable energy. Acceptable procurement targets are:

  • 80% of electricity from renewable sources by 2025, and
  • 100% of electricity from renewable sources by 2030.

If you already source electricity at or above these thresholds, you should maintain or increase your share of renewable electricity.



How to commit to and announce a science-based target

The following steps are required to commit to and announce an SBT.

  1. Commit to set a science-based target (internal)
  2. Develop a target (internal)
  3. Submit your target for validation (to SBTi)
  4. Announce the target (public)

Criteria for SBTs

To ensure their rigour and credibility, SBTs should meet a range of criteria.

  • An SBT should cover a minimum of 5 years and a maximum of 15 years from the date the target is publicly announced. You are also encouraged to develop long-term targets (e.g. up to 2050).
  • The boundaries of your SBT should align with those of your carbon inventory.
  • From October 2019 the emissions reductions from Scope 1 and 2 sources should be aligned with a 1.5°C decarbonisation pathway.
  • SBTs should cover at least 95 per cent of your Scope 1 and 2 emissions.
  • You may set targets that combine scopes (e.g., Scope 1+2 or Scope 1+2+3 targets).
  • The Scope 1 and 2 portion of a combined target can include reductions from both scopes or only from one of the scopes. In the latter case, reductions in one scope have to compensate for the other scope.
  • You should use a single, specified Scope 2 accounting approach (“location-based” or “market-based”) for setting and tracking progress toward an SBT.
  • If you have significant Scope 3 emissions (over 40% of total Scope 1, 2 and 3 emissions), you should set a Scope 3 target.
  • Scope 3 targets generally need not be science-based, but should be ambitious, measurable and clearly demonstrate how you are addressing the main sources of value chain GHG emissions in line with current best practice.
  • The Scope 3 target boundary should include the majority of value chain emissions; for example, the top three emissions source categories or two-thirds of total Scope 3 emissions.
  • The nature of a Scope 3 target will vary depending on the emissions source category concerned, the influence you have over your value chain partners and the quality of data available from your partners.
  • You should periodically update your SBTs to reflect significant changes that would otherwise compromise their relevance and consistency.
  • Offsets and avoided emissions do not count toward SBTs. The SBTi requires that you set targets based on emission reductions through direct action within your own boundaries or your value chains. Offsets are only considered to be an option if you want to contribute to finance additional emission reductions beyond your SBT.

Upcoming changes to submission of SBTs

In October 2018, the Intergovernmental Panel on Climate Change (IPCC) released its Special Report on Global Warming of 1.5 °C (SR15), which was the IPCC’s first major update since its Fifth Assessment Report (AR5) released in 2014.

The new report makes a very strong case about the benefits of limiting warming to 1.5°C and highlights the severe risks and impacts of reaching 2°C of warming. It provides new emissions pathways for limiting warming to 1.5°C and well-below 2°C.

Informed by SR15, in April 2019 SBTi released updated target validation criteria, target validation protocols, technical resources and tools to enable you to set targets in line with the level of decarbonisation needed to achieve the Paris Agreement.

This means that as of October 2019, the SBTi will no longer accept targets in line with 2°C. Existing targets in line with 2°C will continue to be valid and will be labelled as 2°C targets on the SBTi website.



Mandatory target recalculation

To ensure consistency with most recent climate science and best practices, targets must be reviewed, and if necessary, recalculated and revalidated, at a minimum every five years. If you have an approved target that requires recalculation, you must follow the most recently applicable criteria at the time of resubmission.

 

100% Renewables are experts in helping organisations develop their carbon reduction and renewable energy targets and pathways. Developing baselines, projecting your emissions and knowing how you can reach identified targets can be complex. If you need help, 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.

Challenges with achieving ambitious targets

Challenges with ambitious targets
Challenges with ambitious targets

In part 1 of the blog series, we investigated what the scope of your climate change target could be. In part 2, we looked at the global and national goals you should be aware of. In this blog post, we will shed light on some of the challenges that you may face when setting ambitious goals.

Striking a balance

Setting targets is often about striking a balance between what we know can be achieved with today’s commercially available solutions and what will be available in coming years.

This is why many targets for renewable energy, for example, are 100% by 2030. It is expected that battery storage for solar and renewable energy sourcing for energy supply will be readily available and cost-effective by that time.

Interim targets tend to focus on onsite measures that are known to be cost-effective now, such as energy efficiency and solar panels.

Challenges with achieving ambitious targets

In our experience, both interim and ambitious long-term targets can present challenges for you. Here is a list of some of those challenges.

Ongoing internal support, resources and funding

This is often the most common barrier and challenge; how to gain and sustain the support and funds internally to make efficiency and renewable energy initiatives happen. There are usually limited funds, competing priorities and resources are stretched.

Without internal support at senior level as well as people to develop business cases and implement projects, most programs do not last or succeed.

Strategy tips:

  1. One or a few key staff and managers who want to see continued action on renewables and emissions reduction, and make it a priority on an ongoing basis.
  2. Having clear financing strategies for renewables, efficiency and other emissions reduction measures, including awareness of state and federal incentives such as the Energy Saving Scheme and the Renewable Energy Target, a consideration to fund from Capex or a loan, revolving energy funds or similar.
  3. Alignment of renewable energy and emissions reduction plans with your organisation’s strategy so that this is embedded in your organisational priorities.

Understanding electricity markets and your energy purchasing processes

Energy procurement will most likely deliver the bulk of your organisation’s ambitious renewable energy goals, so without a plan, you may not be able to achieve an ambitious renewable energy goal ahead of the ‘greening’ of the grid.

The ability to meet an ambitious renewable energy goal cost-effectively is heavily influenced by how you source electricity from the market. Whereas in the past, GreenPower® was available, but at a cost premium, many organisations are now able to source energy from renewable energy projects at similar or even lower cost than conventional power.

Strategy tips:

In this rapidly evolving environment, you need to take time to understand how the electricity market and renewables procurement work and develop your energy sourcing strategy accordingly. In particular, investigate the following aspects of energy procurement:

  • The current and future electricity and renewable energy market
  • Contract terms for renewable energy supply
  • Types of contracts for renewable energy purchasing
  • Interest in collaboration or partnering for volume to achieve better pricing are all aspects of energy procurement

Transport and waste

Transport and waste can be sources of large carbon emissions. However, solutions to achieve step-change in energy demand, renewable energy or carbon emissions can be limited, particularly if your organisation is already focusing on emission reduction in these areas.

In our experience, the level of focus on carbon emissions and renewables for these sources is low or lags the focus that is applied to electricity and stationary gas. This often leads to the omission of these sources from targets.

An emerging aspect of this is the potential for electrification of vehicles to change electricity demand and thus increase the amount of renewable electricity that needs to be sourced to meet ambitious targets. Some organisations are beginning to assess their future energy demand with an EV fleet and incorporate this into their long-term forecasts.

Strategy tips:

Consider including transport and waste in future targets if they are not already part of your goal. Make sure that you apply appropriate resources to understand opportunities and future trends.

The emergence of electric vehicles will introduce new challenges for the identification of new opportunities. A good strategy is to forecast what changes will occur and when. This may not be a significant factor for the next 4-5 years but will almost certainly be a more important issue as we approach 2030.

Organisational growth

While you are implementing efficiency and renewables, your energy demand may grow with organisational growth. Your emissions intensity may reduce, but your absolute emissions may still be growing.

Strategy tips:

The greater the level of organisational support and understanding of the nature, scale and timing of opportunities, as well as an understanding of the type and scale of changes that will occur to your assets over time helps to set targets that are realistic and achievable.

You need to take these changes into account so you know what combination of emission reduction options can help you meet your target in the most cost-effective way.

Conclusion

You may find you have only achieved a small part of your goal after a few years, despite the fact you have progressed several onsite solar and energy efficiency projects. Often, building energy efficiency and onsite solar can deliver part of the solution, but each project is individually small.

This is beginning to change with cheaper solar panels making larger-scale systems cost-effective, which in turn has a greater impact on emission reduction and onsite renewable energy generation.

The overall effort towards ambitious goals is likely to include a small number of measures that have individually significant impact (e.g., a renewable energy PPA), plus a large number of small measures that have low impact but are good for the bottom line.

Your strategy to meet ambitious targets should include both these measures.

100% Renewables are experts in helping organisations develop their renewable energy strategies and timing actions appropriately. If you need help with developing a target and action plans that help you meet this target, 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.

Target setting – Global and national goals you should be aware of

In part 1 of this blog post series, we investigated what the scope of your climate change target could be. In part 2 of this series on target setting, we will look at the global and national goals that you should be aware of.

Global bodies, countries and states are setting targets that reflect global concerns about climate change. An increasing number of organisations are also setting ambitious targets and seeking to provide leadership.

Global context for action

Internationally, there are three primary drivers for urgent action on climate.

Sustainable Development Goals (SDGs)

In 2015, countries adopted the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals. Governments, businesses and civil society together with the United Nations are mobilising efforts to achieve the Sustainable Development Agenda by 2030[1]. The SDGs came into force on 1 January 2016, and call on action from all countries to end all poverty and promote prosperity while protecting the planet.

Paris Agreement and Science Based Targets

To address climate change, signatory countries adopted the Paris Agreement at the COP21 in Paris on 12 December 2015. The Agreement entered into force less than a year later. In the agreement, signatory countries agreed to work to limit global temperature rise to well below 2°C Celsius, and given the grave risks, to strive for 1.5°C Celsius[2].

Targets adopted by organisations to reduce carbon emissions are considered “science-based” if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement—to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C.

If you are interested in reading more about Science-Based Targets (SBTs), please read our blog post on ‘Science-based targets in a nutshell’.

Special IPCC report on 1.5°C warming

In October 2018 in Korea, governments approved the wording of a special report on limiting global warming to 1.5°C. The report indicates that achieving this would require rapid, far-reaching and unprecedented changes in all aspects of society. With clear benefits to people and natural ecosystems, limiting global warming to 1.5°C compared to 2°C could go hand in hand with ensuring a more sustainable and equitable society[3].

GLOBAL CONTEXT FOR ACTION ON CLIMATE
Figure 1: Global context for action on climate change

In addition, the World Economic Forum’s Global Risks Report 2019[4] highlights climate change-related outcomes as among the most likely to occur with the highest impacts to the global economy.

GLOBAL RISKS REPORT – LIKELIHOOD AND IMPACT OF CLIMATE AND OTHER RISKS TO THE GLOBAL ECONOMY
Figure 2: Global risks report – likelihood and impact of climate and other risks to the global economy

National, States and Territories targets

At a national level, Australia’s response to the Paris Agreement has been to set a goal for carbon emissions of 5% below 2000 levels by 2020 and GHG emissions that are 26% to 28% below 2005 levels by 2030. A major policy that currently underpins this is the Renewable Energy Target (RET). This commits Australia to source 20% of its electricity (33,000 GWh p.a., estimated to equate to a real 23% of electricity) from eligible renewable energy sources by 2020. The scheme runs to 2030. These two key targets are illustrated below.

Australia’s renewable energy and carbon goals – National level
Figure 3: Australia’s renewable energy and carbon goals – National level

 

At a sub-national level, most states and territories have established aspirational emissions targets as well as some legislated targets for renewable energy.

AUSTRALIA’S RENEWABLE ENERGY AND CARBON GOALS – STATE & TERRITORY LEVEL
Figure 4: Australia’s renewable energy and carbon goals – state and territory level

Setting a goal for your organisation

In setting a target for your organisation, you should consider global, national and goals of other companies in your sector. You should also evaluate energy efficiency and renewable energy opportunities in your organisation to know what you can achieve with onsite measures. Offsite measures like procuring renewables or purchasing carbon offsets can help you with achieving more ambitious goals.

In part 3 of this series, we will look at challenges with achieving ambitious targets.

100% Renewables are experts in helping organisations develop their carbon reduction strategy and advising on appropriate goals. If you need help with developing your targets, 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.

 

[1] Sourced from https://www.un.org/sustainabledevelopment/development-agenda/

[2] Sourced from https://www.un.org/sustainabledevelopment/climatechange/

[3] Sourced from https://www.ipcc.ch/news_and_events/pr_181008_P48_spm.shtml

[4] https://www.weforum.org/reports/the-global-risks-report-2019

Target setting – What should be the scope of your target? [with video]

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

Setting climate change targets is an important part of developing a renewable energy or carbon reduction strategy for your business. Targets will provide guidance and direction, facilitate proper planning, set employee expectations and will help you evaluate organisational performance against your stated goals.

With a goal, you will let everyone know about where your organisation is headed. With a strategy that supports your targets, you will know how to get there in the most efficient way.

In this blog post, we would like to share a few common questions about the basics of goal setting and about the scope of your target. In the next blog post, we will talk about global, and national goals you should be aware of.

Should you set yourself a target before or after you develop your renewable energy strategy?


In general, we would recommend that you develop your strategy and action plans first to evaluate what level of reduction will be possible with energy efficiency and renewable energy measures. This will tend to lead to targets that are known to be realistic and achievable. However, an ambitious and inspirational target can signal what an organisation values and wants to achieve. It can also motivate to identify and develop the solutions that will lead to the goal.

Should you set yourself a carbon emissions or renewable energy target?


There are many ways targets can be set. In the context of climate change mitigation, the most common targets relate to either carbon emissions or renewable energy.

Carbon reduction targets

Carbon reduction targets can be in absolute or relative terms. For instance, you could set yourself an absolute reduction target of 40% by 2025 from the 2018 baseline. You could also set yourself a relative reduction target, which measures your reduction activities against a figure like your production output, staff numbers, operating hours or square metres. An example would be ‘achieve a 50% reduction of our carbon emissions/FTE by 2023 from our 2016 baseline’.

Renewable energy targets

Renewable energy targets are usually expressed as the percentage of energy you would like to source from renewable energy. For example, you could have a goal for your organisation to be ‘50% renewable by 2025’.

What should you include within the scope of your target?

Renewable energy targets

In the context of a renewable energy goal, you will need to choose whether you will just focus on electricity, whether you would like to include stationary fuels like natural gas, or whether your goal extends to transport energy as well.

WHAT YOU CAN INCLUDE IN A RENEWABLE ENERGY TARGET
Figure 1:  What you can include in a renewable energy target

Carbon emissions targets

In the context of a carbon emissions goal, you will need to think about what kind of emission sources, or what kind of scopes you would like to include.

For instance, you could focus on

  • Carbon emissions directly associated with the burning of fuel and use of electricity (Scope 1 and Scope 2 emissions respectively per greenhouse gas accounting).
  • Carbon emissions indirectly associated with fuel and electricity consumption – i.e. upstream extraction, production and transport processes for fuels and electricity (Scope 3 emissions),
  • Carbon emissions associated with the running of your operations such as air travel, employee commute, consumables, catering, emissions from your waste, and other upstream and downstream emissions (Scope 3 emissions).

Factors to consider


When considering what should be included in targets, it is important to consider several factors:

  • Energy that you can influence or control. Typically, stationary electricity is easy to include as solutions are available or near-commercial that can make this a fully renewable supply in a short timeframe – e.g., 5-10 years. However renewable energy fuels for transport are not yet widely available or commercially viable but will be in future.
  • Emissions that you can control or have confidence that they are declining. Waste management, for example, is a complex task, and the ability to set emissions reduction targets may rely on whether or not a waste management strategy is in place or planned. If not, then it may be difficult to set a target that is realistic and achievable.
  • Is an emissions source material or not? For example, LPG consumption may be trivial compared with other sources, so should time and effort be devoted to tracking and managing this source?
  • Your ability to account for all of the sources you may want to track so that you can report on its progress towards reaching goals. Often 80%+ of emissions can be readily accounted for with minimal effort or use of pre-existing systems (from simple spreadsheets to proprietary data collection and reporting systems), whereas the remaining ~20% of emissions can involve significant effort to both establish and then track emissions on an ongoing basis. The Climate Active program is working to make this simpler for organisations to report and offset their carbon impact.
  • Consideration of your overarching purpose in setting goals or targets, such as for
    • internal cost-cutting
    • internal management of emissions
    • to provide guidance and leadership
    • to partner with like-minded organisations to share information and knowledge that is mutually beneficial
    • or all of these

What should be your preferred approach for setting a target?

There is no one preferred approach to selecting what should be included in targets.

In our experience many organisations have

  1. good data and renewables or abatement plans for electricity,
  2. good data but limited plans for reducing transport emissions, and
  3. mixed data and strategic plans including emissions reduction for scope 3 emissions like waste.

This tends to influence what is included in the scope of renewable energy or carbon emissions targets, often starting with a narrow scope of significant sources with an intent to expand the scope of targets.

Other organisations may have excellent data and plans across multiple energy and emissions sources, within their operations and their supply chains, and set the scope of targets accordingly.

100% Renewables are experts in helping organisations develop their carbon reduction strategy and advising on appropriate goals. If you need help with developing your targets, 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.

How choosing a target influences your emissions over time [with video]

100% RE - emission reduction through 100% renewable energy
100% RE – emission reduction through 100% renewable electricity

We recently worked with a regional council to provide their senior management and other key stakeholders with input to the development of their climate change action plan and target-setting process.

An important part of our work was to show council, based on our experience with many other local governments, what different carbon reduction scenarios look like in this sector. In particular, we showed what a no-action scenario would mean for electricity demand, what a focus on demand reduction within council operations would look like, and what an approach that encompasses both aggressive demand reduction and a comprehensive renewable energy supply strategy could achieve.

Presenting and workshopping these scenarios helped our client to set ambitious goals for energy and carbon reduction that are achievable, affordable and can be planned and resourced in the short, medium and long term.

Three scenarios for electricity-based emissions

To illustrate how inaction and action to mitigate climate change can influence emission reductions over time, we created a series of animations. Please click on the video (< 4min) below to view the effect of energy efficiency and renewable energy measures on a council’s business-as-usual electricity consumption.

Scenario 1: no action

For most local councils, rising population, asset upgrades and service improvements are factors that influence the energy demand of council operations.

In the absence of clear policies and practices to reduce energy demand and increase renewables, these factors will lead to increased energy use. As electricity prices also rise, this will result in higher energy costs over time.

Scenario 2: action within council operations

In most organisations, there are numerous opportunities to reduce energy demand and increase onsite renewable energy.

  • Upgrading building lighting systems, air conditioning controls and installing rooftop solar panels usually have an attractive payback.
  • Incorporating lowest life-cycle cost technologies and solar into new developments, and implementing sustainable procurement policies for appliances and office/IT equipment can reduce or reverse energy growth over time.
  • Replacing capital-intensive equipment such as air conditioning systems, water & sewer pumping systems, sporting field lighting and servers with best-practice energy-efficient technologies can similarly reduce or reverse growth in energy demand.
  • Street lighting is often one of the largest energy-using accounts in a local council. As LED technology becomes available, local and main road lighting can be upgraded, leading to large energy savings.

Planning, scheduling and funding implementation of these opportunities over time will lead to a sustained and cost-effective reduction in a council’s grid energy consumption.

However, for most councils, these actions will only take climate mitigation so far, typically a 30% to 40% reduction over time. This would likely fall short of the 2018 IPCC report on ‘Global Warming of 1.5 ºC’, which states that we need to reduce global net anthropogenic CO2 emissions by about 45% from 2010 levels by 2030.

Scenario 3: ambitious action on energy demand and supply

In our experience, it is not possible for a council to achieve deep emissions cuts without focusing on both energy demand and energy supply. In an ‘ambitious action’ plan, there will be a more aggressive rollout of energy efficiency and renewable energy measures, as well as an energy procurement strategy that will source renewable energy for council’s operations.

Energy demand action will:

  • Extend solar PV to more marginal sites,
  • Develop a plan for larger-scale onsite solar with battery storage,
  • Incorporate smart controls with street lighting,
  • Plan for charging of electric vehicles over time, including passenger and commercial vehicles and road plant

Energy supply action will include renewable energy purchasing as part of a council’s normal energy procurement process. Typically, this takes the form of a renewable energy Power Purchase Agreement (PPA) as part of overall energy supply, with the potential to scale up renewable energy purchasing towards 100% over time.

For some councils, building their own solar farm may be another way to scale up supply-side action on renewables.

Ambitious action that focuses on both energy demand and renewable energy supply is aligned with global targets to decarbonise by mid-century. As leaders, local governments have an important role to play in showing their communities that deep cuts in emissions are possible and affordable.

You can read more about achieving ambitious targets in our ‘How to achieve 100% renewable energy’ paper.

Ambitious action is achievable and cost-effective

It is possible to achieve ambitious targets cost-effectively – what is required is to plan and resource ahead, to understand the cost implications as well as the cost savings, and to know what measures can be rolled out at what point in time.

100% Renewables are experts in helping organisations develop their renewable energy strategies and timing actions appropriately. If you need help with setting targets that are achievable and cost-effective, 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.