Not All Renewables Are Created Equal: Quantifying the Emissions Benefits of Institutional Renewable Energy Purchasing Options

In recent years, institutional climate action targets, renewable energy subsidies, and the rapidly falling costs of wind and solar have led more and more large institutions to begin purchasing significant quantities of off-site renewable energy. The practice has grown rapidly, from 70 megawatts purchased in 2012 to over 2,780 megawatts, as of February 2018. Naturally, all these new renewables are reducing pollution. But…exactly how much pollution?

The Boston Green Ribbon Commission Higher Education Working Group, an alliance of leading sustainability-minded institutions, aimed to find out. The Working Group’s chair, Harvard University, partnered with WattTime (a Rocky Mountain Institute subsidiary) and Meister Consultants Group (a Cadmus Company) to conduct a study exploring methods for quantifying the actual emissions impacts of institutional renewable energy purchases. The results were intriguing.

Notably, the study, entitled Institutional Renewable Energy Procurement: Quantitative Impacts Addendum, found that the answers may be less straightforward than they initially appear. Evidently, not all renewable energy projects are equally effective at reducing emissions. (Currently, the most common emissions accounting framework treats all renewable energy projects as equally reducing emissions.) Better measuring this variation of impact between projects could soon create new opportunities for renewable energy buyers to begin reducing emissions even faster, cheaper, more reliably, and more credibly due to the new evidence-based approach.

The Higher Education Working Group—consisting of Boston College, Boston University, Harvard University, MIT, Northeastern University, Tufts University, and the University of Massachusetts, Boston—had already been active in illuminating and streamlining institutional renewable energy purchasing. In 2016, the group authored a report in partnership with Meister Consultants Group offering detailed background information on renewable energy procurement options, as well as guidance on impact claims for institutions already making or looking to make renewable energy purchases.

While attending an RMI Business Renewables Center (BRC) member event, Jaclyn Olsen, associate director of Harvard’s Office for Sustainability (OFS), learned about WattTime, and became intrigued by the work it was doing to quantify carbon impacts of renewable purchases. Olsen proposed a partnership to build on the research that the Working Group had already done on the topic, and the result was a collaboration between OFS, WattTime, and Meister Consultants Group to create a report for the Working Group members that brought this new way of assessing emissions reduction impacts from renewable purchases to potential purchasers.

Three Ways to Count Emissions

Most institutions today report their greenhouse gas emissions using the carbon footprinting approach, as laid out in the Greenhouse Gas Protocol (GHGP). Although the process involves multiple methods, hierarchies of emissions factors, and other complexities, at a high level it’s a simple approach: organizations count how much regular electricity they purchase from the grid, subtract the amount of renewable energy they purchase, and multiply the remainder by the average emissions intensity of the local grid. This framework allows for straightforward comparison of renewable energy commitments across institutions; however, it does not differentiate between varying carbon impacts of different renewable energy projects.

Before we describe the study’s findings, it is important to note that carbon footprinting is not the only way to measure emissions. The Quantitative Impacts Addendum study identifies three different ways institutions can measure the emissions impacts of renewable energy purchases: (1) the status quo, carbon footprinting; (2) avoided emissions; and (3) quantification through the generation of carbon offsets. Each has its own benefits and drawbacks. 

The study’s primary goal was to uncover the implications of these differences, so that institutions making renewable energy purchasing decisions will have a broader and deeper understanding of the emissions impacts of the projects they are considering.

1. The Status Quo: Counting Megawatt-hours, Not Emissions

The simplicity of carbon footprinting comes at a cost. The GHGP is very explicit that this approach measures the change in emissions that an institution “owns” in an abstract accounting sense, not necessarily the actual real-world emissions reductions caused by renewable energy purchases.

The reason this distinction matters is that the real-world emissions reductions can vary widely. After all, adding renewable energy to the grid only reduces emissions if it displaces existing power plants. But which power plants are displaced? A renewable energy project that displaces mostly coal will reduce considerably more emissions than one that displaces natural gas, or even other emissions-free resources like hydropower.

2. A Measurement Change: Avoided Emissions

The avoided emissions method is also defined under the GHGP, and is classified as an optional calculation. This method establishes a framework for measuring not megawatt-hours, but emissions. By measuring which existing or future power plants a renewable energy project displaces, it measures the actual emissions impacts of a project.

Employing this methodology, the differences in emissions impacts between renewable energy projects can be substantial. The report finds that renewable energy purchases by Boston area schools could reduce anywhere from 791 to 2,187 pounds of carbon dioxide per megawatt-hour—nearly a 300 percent variation among projects of identical size—depending on the power plant being displaced.

 It’s important to note that although the GHGP allows organizations to measure avoided emissions, the GHGP does not allow organizations to use these calculations in their main emissions inventory. So organizations that declare carbon targets and choose to voluntarily define them in terms of the emissions inventory cannot use the avoided emissions method. This could lead to a situation where the claimed emissions reduction is higher or lower than a more accurately calculated value.

3. Carbon Offsets: Counting Emissions Toward Declared Targets

Unlike the avoided emissions methods, projects measured using carbon offsets can be “counted” toward an institution’s official emission inventory. To ensure the integrity of that system, projects are eligible for carbon offsets only if they pass a series of tests that they are valid and additional (truly reducing emissions beyond what would have occurred in the project’s absence). While ensuring the highest levels of accuracy, the carbon offset process is also much more time-consuming and administratively burdensome than the avoided emissions approach. Also, the difficulty of proving additionality for renewable energy projects means many of the projects will not be eligible.

Pros and Cons of Each Method

There are clearly pros and cons to each approach. In determining which method to use, institutions should consider the following key factors:

• Administrative complexity: The main reason carbon footprinting is so widespread is its simplicity. However, new technologies such as blockchain could soon greatly lower the difficulty of the other two methods.
• Local benefits: Under the current rules, avoided emissions and carbon offsets do not “count” GHG emissions reduced in a region with a cap-and-trade program, which includes all of New England. Is this a helpful nudge toward selecting greener projects, or an unwelcome disincentive to buying local?
• Additionality: Suppose a university buys a renewable energy certificate (i.e., the legal rights to claim the electricity from a renewable energy facility). If the facility was going to exist whether or not it made that purchase, should the school be able to say the purchase lowered its carbon footprint? Using carbon footprinting, the additionality is immaterial and the school can claim the reduction regardless; however, using a carbon-offset approach, the school would not be able to take credit for this purchase.

Where Next?

The main reasons to measure emissions are (1) to ascertain as accurately as possible whether we are collectively moving toward the emissions reductions we all know are needed, and (2) to allow actors to make accurate comparisons of the impacts of different choices.

When some institutions are using one method and others are using a different method, it is difficult to accurately compare the impact of different individual actions and to calculate the collective impact. There is a need for a clear and consistent way for institutions to accurately measure the impacts of renewable purchases. It would certainly be possible for the Higher Education Working Group member institutions to collectively define a new standard that draws the best elements out of the three methods and discards the drawbacks. Regardless of the method they select (or create), acting together maximizes transparency and reduces administrative costs. The report recommends that whatever the Working Group decides, the members collectively decide it together.

Written in partnership with Jaclyn Olsen and Caroleen Verly from the Harvard University Office for Sustainability and Chad Laurent from Meister Consultants Group (A Cadmus Company).

Image courtesy of iStock.