Green-e Climate Protocol for Renewable Energy
www.green-e.org/getcert_ghg_re_protocol.shtml
Overview
Additionality and Quantification Procedures
Overview
Type of Standard and Context
The Green-e Climate Protocol for Renewable Energy (Green-e CPRE) is part of Green-e Climate (see Green-e Climate), a certification program for carbon offsets sold to consumers in the voluntary offset market. All Green-e programs are administered by the Center for Resource Solutions (CRS), a non-profit organization based in California (see Green-e Climate).
The Green-e Climate Protocol for Renewable Energy (Green-e CPRE) is a voluntary GHG offset protocol that certifies eligible renewable facilities in the US to sell GHG offsets.
The intention of this Protocol is to bring additional credibility to the market for GHG emission reductions derived from renewable energy project activities. By establishing clear guidelines, informed by stakeholders, on the greenhouse gas claims that can be made from renewable energy projects, the Protocol will help further the development of the voluntary market for renewable energy. The Protocol addresses the issues of tracking, additionality, double counting and double claiming in order to ensure that the greenhouse gas benefits from eligible renewable energy projects are real, surplus, measurable, verifiable and additional (Green-e, 2007).
Standard Authority and Administrative Bodies
The Green-e CPRE is governed by the Green-e Governance Board and administered by the CRS. The Green-e Governance Board is comprised of environmental organizations, consumer groups, public policy advocates, regulatory agencies and offset market experts. To avoid conflicts of interest, market actors do not have a vote but they are represented through a non-voting seat.
Regional Scope
The Green-e CPRE is specific to projects in the electricity sector in the US.
Recognition of Other Standards/ Linkage with Other Trading Systems
The Green-e CPRE is one Endorsed Program of the Green-e Climate certification program.
Market Size and Scope
Tradable Unit and Pricing Information
Green-e Climate certified VERs are in units of 1 ton of CO2e (metric or short ton according to the program certified.) There is no pricing information currently available.
Participants/Buyers
Buyers of Green-e Climate certified offsets are individuals, organizations and companies in the US.
Current Project Portfolio
A list of renewable energy projects that have been approved under the Green-e CPRE can be found here
Offset Project Eligibility
Project Types
The following project types are accepted under the Green-e CPRE:
- Wind Power
- Solar Photovoltaics (PV) and Solar Thermal Electric Power.
- Hydropower from either new generation capacity (see Start Date below) on a non-impoundment, or new generation capacity on an existing impoundment, must meet one or more of the following conditions:
- The hydropower facility is certified by the Low Impact Hydropower Institute; or
- The facility is a run-of-the-river hydropower facility with a total rated nameplate capacity equal to or less than 5 MW. Multiple turbines will not be counted separately and cannot add up to more than a 5 MW nameplate capacity; or
- The hydropower facility consists of a turbine in a pipeline or a turbine in an irrigation canal.
- Geothermal electric generation facilities with no direct emission of GHGs.
- Gaseous biomass from landfill gas methane, wastewater methane and digester methane derived from waste biomass fuels used to generate electricity. No biomass in a liquid or solid state will be allowed. Animal waste in a solid state, agricultural biomass, energy crops, municipal solid waste and waste to energy are ineligible.
- Ocean thermal, wave and tidal power.
New and emerging technologies not included in the above list will be considered on a case-by-case basis by the Green-e Governance Board.
Project Locations
Projects must be located in the US.
Project Size
Hydropower facilities have to be smaller than 5 MW or be certified by the Low Impact Hydropower Institute. No size restrictions apply for other project types.
Start Date
Eligible facilities cannot have been operational before January 1, 2005.
Crediting Period
The maximum crediting period is 15 years.
Only GHG reductions resulting from generation of renewable energy that occurred on January 1, 2007 or later are eligible. In addition, a Green-e Climate certified product using the Green-e CPRE as its endorsed program may include only GHG reductions from renewable energy generation that occurred in the calendar year in which the certified offset is sold, the first three months of the following calendar year or the last six months of the prior calendar year.
Co-benefit Objectives and Requirements
In general, the Green-e CPRE does not require any additional co-benefits of the projects that seek certification. The exceptions are the Low Impact Hydropower Institute certification requirements of hydro projects.
Additionality and Quantification Procedures
Additionality Requirements
The Green-e CPRE uses a top-down approach and requires three additionality tests:
- The Legal, Regulatory or Institutional Test;
- The Timing Test (see Start Date above); and
- The Performance and Technology Test.
The Legal, Regulatory or Institutional Test:
The Renewable Facility is NOT eligible if:
1) It was mandated by a local, state or federal government agency or was required under any legal requirement or settlement.
2) It was built as a least-cost facility when compared with non-renewable energy facilities.
However, if a marketer or generator can demonstrate to the Green-e Governance Board that the revenue from the sale of RECs or GHG credits was a determining factor in the facility being determined the least-cost option the facility is eligible for certified GHG reductions. The demonstration that the sale of RECs or GHG emission reductions deemed a facility least cost under an Integrated Resource Planning (IRP) process is only required for least-cost facilities under an IRP process. Green-e Climate is not requiring a financial additionality test on project eligibility (Green-e, 2007).
3) It is located within a region with a legally binding GHG cap set for the electricity sector and no GHG allowances are allocated to the facility or no other mechanism exists to credit greenhouse gas emissions reductions benefits to the facility. The annual Green-e Climate recertification process will include verification that the facility still satisfies the Legal and Regulatory Test. Furthermore, regulatory changes may also trigger revisions to the Protocol itself.
4) The owner of a renewable generation facility is reporting direct GHG emissions in a legally binding cap and trade program.
5) If allowances are allocated to the facility, the allowances must be retired on behalf of the purchaser in order for the facility to be eligible under this protocol. A facility that sells a share of its RECs in compliance markets is eligible for GHG emission reductions from the remaining share of its generation provided that it meets all the requirements of this protocol.
The Performance and Technology Test:
The Green-e CPRE uses a sector-based performance and technology test to identify whether a specific technology (in this case net-zero GHG emitting electricity generation) is an additional activity in the US. This sector-based approach is similar to the approach used by CAR and the US Environmental Protection Agency (EPA) Climate Leaders program for their offset protocols.
Quantification Protocols
The Green-e Climate CPRE uses a top-down approach.
The emission reductions are calculated using a regional Baseline Emission Rate (BER). For baseload technologies (i.e. firm power activities including biomass, geothermal, ocean thermal and hydro), the BER reflects the emission rates of the planned capacity additions in the US (the build margin) and for non-baseload technologies (i.e. non-firm power activities including solar, wind, wave, and tidal), the BER is an average of the emission rates of the build margin and the currently operating grid connected electricity generation facilities (the operating margin). (The build margin represents the emissions reduction that occurred because the renewable generation was built instead of a business-as-usual plant, while the operating margin estimates the effect of backing down other generating facilities when the renewable energy facility is operating and generating power.) Baseload emission rates are developed for different regions. (For details of the NERC regions, see the EIA website.) The non-baseload rate used has been developed by the US EPA eGRID program. The BER will be updated at least every three years and posted on the Green-e Climate website. (For details, see the Green-e Climate Protocol for Renewable Energy, p.9.)
The approach taken to quantification was built out of recommendations made by the World Resources Institute in the following document: The GHG Protocol: Guidelines for Quantifying GHG Reductions from Grid-Connected Electricity Project.
Project Approval Process
Validation and Registration
Every project approved under the Green-e CPRE has to go through an initial review, which establishes that the project meets the requirements of the Green-e CPRE. Depending on the characteristics of the facility, this can include interviews with project developers, review of federal, state and utility regulatory documents, specific reporting procedures to GHG registries, siting documents and/or contractual requirements; as well as details of how the project addresses additionality, and other specifics of the facility being added to the Green-e Climate website.
Monitoring, Verification and Certification
Since the Green-e CPRE establishes common factors for each technology type dependent on the region in which it is located, the emission reductions can be directly calculated from the electricity generation. To address the risk of double counting, Green-e CPRE has developed explicit reporting procedures for generators participating in GHG registries. In addition, contractual ownership has to be documented.
Registries and Fees
Ownership of GHG emission reductions will be documented, in part through the use of electronic tracking systems for RECs. Current eligible tracking systems are ERCOT, NE-GIS, PJM-GATS, WREGIS and MRETS. The Green-e Climate Program will update this list as new tracking systems are developed. Generators wishing to participate in this program must have all generation reported to an eligible tracking system.
GHG Registries
If the owner of the eligible facility participates in a voluntary or mandatory GHG registry, the renewable energy facility can only participate in this program if the generator owner reports to the registry that the electricity generated at the facility is attributed emissions equivalent to the GHG emission reductions sold in the voluntary market and certified by the Green-e program.
Fees
The fees for certifying facilities according to the Green-e CPRE are paid by the company that is selling Green-e Climate certified offsets from a specific facility. The company has to pay USD 3,000 annually, in addition to the USD 6,000 base certification fee, to certify projects according to the Green-e CPRE.
Selected Issues
The Green-e CPRE approves renewable electricity facilities that are eligible to sell emission reductions as part of the Green-e Climate program. The Green-e CPRE was developed partly in response to the emerging market practice of selling RECs as carbon offsets. (Green-e Climate’s sister program Green-e Energy certifies RECs.) Offsets generated from renewable energy facilities face particular challenges in terms of establishing clear ownership and additionality (for a more in-depth discussion see Renewable Energy Certificates (RECs) and Carbon Offsets in the Consumer section of this website).
The Green-e CPRE addresses the issues of ownership and double counting by using Renewable Energy tracking systems, requiring accounting of how the RECs/offsets have been sold and retired, and by having contractual documents that specify that all GHG emission reduction attributes are owned by the seller of the offset.
The Green-e CPRE uses a sector-based performance and technology test to determine additionality. The sector-based approach has the advantage of being transparent and reducing transaction costs for project developers. Yet, any sector-based approach leads, by definition, to the approval of non-additional projects. According to Green-e:
The data analysis documented that approx. 1% of the new generation capacity added to the US generation sector in 2000–2005 (the last time period for which official data was available) was in response to market drivers (and not legal mandates such as [Renewable Portfolio Standard] RPS policies). In response to this the Green-e Governance Board, with input from stakeholders, judged that the construction of a renewable energy facility in the United States under today’s market conditions is an additional activity as long as the other requirements of the Green-e Climate Protocol are met. This is similar to the determination that is presented in the US EPA Climate Leaders Draft Offset protocol for Green Power Purchases, with the exception that the US EPA determines projects post-1997 eligible whereas the Green-e CPRE uses a 2005 threshold.
(It should be noted that the US EPA Climate Leaders module is strictly tied to “indirect“ emission claims, and that the determination of additionality is not the same for indirect or direct emission reductions claims. See http://www.epa.gov/stateply/documents/greenpower_guidance.pdf.)
This approach defines that any new renewable facility which is not under a legal mandate or a Renewable Portfolio Standard is additional. Yet revenue from the sale of offsets from such facilities provides only a small fraction of the total revenue stream. It is therefore questionable whether such a definition of additionality is stringent enough to ensure that no offsets from business-as-usual facilities are sold (see the text box on RECs).
The future of Green-e CPRE
It is unclear what place the Green-e CPRE will have in the future. The protocol states that: “If policies enacted on a state, regional, or federal level impact the GHG emission benefits from renewable energy, this standard will be updated to reflect such changes”. It is likely that most or all electricity generating sources in the US will be covered by a compliance program, such as a national cap and trade system. Under such a system, electricity generating facilities would no longer be able to sell offsets in the voluntary market, unless rules were enacted to address how voluntary markets could coexist with mandatory systems in a way that would preserve their environmental integrity and avoid double counting of offsets. Green-e is currently evaluating how renewable energy facilities located in the RGGI region can continue to play a role in the green power and emission reduction markets.
References
Bird, L. and Lokey, E. (2007). Interaction of Compliance and Voluntary Renewable Energy Markets [Technical report]. National Renewable Energy Laboratory.
Broekhoff, D. (2007). Draft Green-e GHG Protocol for Renewable Energy: Electronic Comment Form. World Resources Institute.
Gillenwater, M. (2007). Redefining RECs (Part 2): Untangling Certificates and Emission Markets [Discussion paper]. Princeton, NJ: Princeton University.
Green-e (2007). The Green-e Climate Protocol for Renewable Energy. October 2007.
Comments made in 2007 on the draft of the Green-e GHG Protocol for Renewable Energy (available at are available at: http://www.green-e.org)