GHG Protocol Part 2: The Problem – What’s wrong with Scope 2 and how to fix it with Granular Accounting

In our last blog, we discussed the huge opportunity presented by the update of the GHG Protocol to fix carbon accounting and electricity accounting in particular. Today, let’s talk about some basic issues with how today’s accounting works, which has led to concerns about insufficient additionality of renewables being driven by related claims. A core problem with today’s electricity (Scope 2) accounting is that it fails to represent physical grid realities in two key ways:

Source: EnergyTag.

1. Time – Electricity supply and demand must balance in real-time. But today’s accounting allows one to claim energy produced at any other time of year. If you can be powered by solar energy all night long, why bother with storage or flexibility? This is not accurate enough.
2. Space – Power grids get congested, affecting deliverability of power. But today’s accounting often ignores this basic reality, and allows claims of clean consumptions from places where electricity cannot flow. Accounting must focus on grids, a critical enabler of decarbonization.

Source: EnergyTag.

The solution to these flaws requires much more Granular Accounting:

1. Require hourly matching to ensure that only clean power produced in the same hour as consumption can be counted. This will ensure a path to 100% zero-carbon means dealing with all hours of the year, even the hard ones.
2. Require deliverability to ensure that only clean energy produced on the same grid, or via interconnected transfer, can be claimed. This ensures we address grid congestion head-on, rather than ignoring it.

These two key steps are critical to ensuring more realistic and accurate carbon accounting and, crucially, to send more effective market signals that drive investments in additional clean power and storage. Granular Accounting looks a lot like how physical power markets work, which must respect physical realities in order to keep supply and demand in balance. You can’t ask your power supplier for delivery of power from Iceland to Belgium or from Texas to New York. Why does carbon accounting allow that today? It’s time to get more accurate and this illustration from Peninsula Clean Energy, a Californian utility, shows us why:

100 % Annual Matched → Many hours still sourcing carbon-intense power

99 % Hourly Matched → Almost all hours are truly fossil free

Source: Peninsula Clean Energy.

We hope you enjoyed today’s short blog, which calls for carbon accounting that reflect grid realities.

Next week, we will dive deeper into the scientific Evidence behind Granular Accounting. Stay tuned!