Renewable energy certificates: how tech giants and banks can say they’re 100% green – even if they’re not

Renewable energy certificates: how tech giants and banks can say they’re 100% green – even if they’re not

By William Phelps

Apple, Capital One, Facebook, Goldman Sachs Group, Google and Microsoft have all claimed that 100% of the electricity they use comes from renewable sources – but it’s just a matter of mixing paper and contracts, like TAG24 can show it.

Global companies are talking about renewables, but the 100% figure has a shadow over fossil fuels. © Collage: IMAGO / photosteinmaurer.com, IMAGO / UIG / PeterxBennett

These companies are all committed to RE100, a global initiative for companies that aim to use 100% renewable electricity to stop climate change.

The RE100 guidelines accept a direct line to a renewable energy source – or on-site production – but there are also less direct ways for companies to deliver on their RE100 promise.

This is where green tariffs or renewable energy certificates (CER) come in.

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Green tariffs are electricity supply contracts that companies can set up with electricity distribution companies or renewable energy projects, which sell their electricity to the grid. The customer agrees to pay a fixed rate for electricity and pays extra to receive renewable energy certificates for the amount of electricity he uses.

Renewable energy certificates each represent one megawatt hour (MWh) of electricity from renewable sources and can be sold by energy providers directly to companies who wish to prove their purchase of renewable electricity.

But an extremely misleading part of green RECs is that the electricity a company gets through the grid is not necessarily the same renewable electricity that a supplier sells its RECs for.

Untangling the electricity supply and the grid

Transmission lines get electricity from the supplier through the grid and into a company's buildings.

Transmission lines get electricity from the supplier through the grid and into a company’s buildings. © IMAGO / agefotostock / xFotosearchxLBRFx

There are two lanes of traffic when it comes to electricity and CERs.

One lane is reserved for the renewable energy supplier. Let’s say the supplier is the owner of a wind farm in Texas, who issues CERs whenever the wind farm generates one MWh of electricity. Then the supplier can sell these CERs to customers.

The other way is for electricity. The MWh of electricity from this wind farm is fed into the grid, which is operated by a utility company.

The utility company buys the electricity from the wind farm and also buys the electricity created by other suppliers, such as the solar farm down the road or the natural gas plant across the road. Street. All of these very different types of energy are thrown into the same pot, so to speak, and distributed randomly.

This is where the problems start. The company buying electricity through a green tariff and purchasing RECs can claim that it is paying for the MWh of renewable electricity supplied by the wind farm – even if it can’t know whether this MWh coming from the grid comes from the wind farm or the gas plant.

Essentially, customers have no way of knowing whether their electricity supply is actually from a renewable energy supplier or from a CO2-emitting fossil fuel power plant because they cannot choose the exact type of energy. they get from the network.

So if you are using 1000 MWh of electricity from any source for your technology company, and also buy 1000 CERs, then you can declare that you are using electricity from 100% renewable sources. You just can’t prove it, because of the way the grid powers your tech business.

100% renewable electricity? simply wrong

The lines circled in the EPA's report on Apple show that a large amount of electricity is attributed to green tariffs and RECs, which ultimately do not guarantee an exclusively renewable energy supply.

The lines circled in the EPA’s report on Apple show that a large amount of electricity is attributed to green tariffs and RECs, which ultimately do not guarantee an exclusively renewable energy supply. © Screenshot / EPA.gov

Reports from the Environmental Protection Agency of 100% green electricity users show exactly how these companies are coming up with the magic number.

Apple has claimed 100% renewable electricity for all of its installations in 43 countries since April 2018. In its 2020 report, Apple told the EPA that it used 2.2 million MWh of renewable electricity during the year. elapsed.

However, in its report, the company only uses 382,215 MWh of self-generated renewable electricity, with the rest coming from the grid.

More than half of Apple’s renewable electricity comes from financial power purchase agreements. These power purchase agreements still need the grid to transmit electricity, so Apple cannot know how much electricity supplied by the grid is renewable and how much is from dirty sources. In addition, Apple does not even include its extended supply chain in the calculation of renewable electricity consumption.

Capital One says it has been using 100% renewable electricity since 2017, but in 2020 100% of its renewable electricity is allocated to RECs. Capital One’s environmental, social and governance fact sheet also shows that in 2020, the company used 32,962 MWh from non-renewable sources.

Facebook claimed it was only using green power and explained how in an official April 2021 statement. The social media giant is using its massive data center in Prineville, Oregon, as an example to only use renewable electricity via a green tariff. Look beyond marketing and you will find that the company pays PacifiCorp for grid electricity and purchases unbundled RECs to offset the amount of electricity it has been using there since 2018.

The Goldman Sachs group didn’t even hit the 100% mark, but in 2020 it said 99.1% renewable electricity was enough to make a victory lap by rounding. In an explanation of sustainable energy, Goldman Sachs Group explains that part of its energy strategy includes purchasing CERs or green instruments if renewable electricity is not directly available.

The Goldman Sachs Group’s 2020 Sustainability Report shows that renewable electricity is not always “directly available” as the report lists 145,000 metric tonnes of CO2 emissions from purchased electricity. It can only come from non-renewable sources.

Google explicitly says that “we still get electricity from the grid, part of which comes from carbon-emitting resources” in its 2020 environmental report. This concession is rare, and the price of transparency goes to Google, because doing the strict minimum is to do nothing.

Microsoft claims to use 100% renewable electricity since 2014. However, more than 50% of its consumption of “green” energy is compensated by the RECs.

Claiming 100% renewable electricity for all of a company’s sites and operations without resorting to a clever accounting trick is misleading at best. TAG24 has contacted RE100 for comment and has yet to receive a response.

Cover photo: Collage: IMAGO / photosteinmaurer.com, IMAGO / UIG / PeterxBennett

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