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However, despite the benefits of renewable electricity, there is currently significant uncertainty regarding the additional environmental benefit of the green electricity tariffs on offer i.e. whether these tariffs achieve any new renewable capacity or carbon saving beyond that created by regulation. In addition, there are concerns about potential double counting of the carbon benefit from renewable generation.
In light of these concerns, for voluntary reporting purposes, Defra recommends that organisations calculate emissions from renewable tariffs using the average electricity emissions factor for the UK. In addition, for reporting under regulations such as the Climate Change Agreements, Carbon Reduction Commitment etc. organisations should also use the average electricity emissions factor for the UK for renewable tariffs. For the purposes of carbon footprinting of products, services, companies or their supply chains, the Carbon Trust does not consider renewable tariffs as “zero carbon” at present and therefore when calculating emissions from renewable tariffs the standard electricity emissions factor should be used.
What is the uncertainty at the moment?
There are a number of concerns about the level of environmental benefit associated with renewable energy tariffs, which lead to the conclusions stated above:
- Lack of transparency: There is limited information about the real benefits and nature of renewable tariffs available to the end purchaser.
- Potential double allocation of the carbon benefit: The current market structure leads to the possibility of renewable electricity being allocated to more than one end user. This is due to the existence of three different certificates (the LEC, ROC and REGO ) for each MWh of renewable electricity, and the lack of clear rules around their use as proof of renewable supply.
- Double counting of the carbon benefit: Renewable electricity is factored into calculation of the UK electricity emissions factor. Therefore there is a risk that the carbon benefit of renewable electricity may be counted twice, once by a consumer that has been sold a renewable tariff, and separately by all electricity users in general who calculate their emissions based on the grid emissions factor.
- Lack of additional environmental benefit: The majority of renewable tariffs provide limited additional environmental benefit as they are selling electricity that would probably have been generated anyway under the terms of the Renewables Obligation – a government regulation which provides a significant financial incentive to produce renewable power.
Are renewable tariffs “zero carbon”?
Due to the problems identified above the Carbon Trust does not consider current renewable tariffs to be “zero carbon” for carbon footprinting purposes. At present the Carbon Trust recommends reporting emissions from using renewable tariffs at the average electricity emissions factor. This is in line with Defra’s recommendation in the recently published 2008 Corporate Reporting Guidelines.
Businesses and public sector organisations should note that for the purposes of complying with regulation such as the Climate Change Agreements (CCAs) and the proposed Carbon Reduction Commitment (CRC), participants cannot count renewable tariff purchases as zero carbon.
What is the future for renewable tariffs?
Ofgem are currently considering what rules are appropriate to govern the future sale of renewable tariffs and Defra also plans to consult on the treatment of the environmental benefits of green tariffs. However, any future carbon reduction claims, based on the use of renewable tariffs, will require further resolution of the additionality and double counting concerns raised above.
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