Some building owners may hesitate to pursue this credit because they don’t believe that the strategy (or expenditure) brings a direct, tangible benefit to their building.
However, nonrenewable energy production is a huge contributor to pollution and global climate change. Buying green power, renewable energy credits (RECs), and carbon offsets can create market demand for clean energy sources and help address climate change. The benefits of renewable energy are well understood by the general public, and so pursuing this credit can help you advertise your commitment to environmental responsibility.
Making it cost-effective
Many LEED 2009 projects saw this credit as low-hanging fruit because it focused exclusively on electricity, which made it very affordable in many cases. However, the credit now covers all onsite and grid-purchased energy sources, and the length of relevant contracts must be at least five years under LEED v4. These changes might impact the economics of this credit for your project, but it’s still worth running the calculations and soliciting quotes to understand the costs.
Calculate how much to purchase
Calculating the amount of green power, RECs, and/or offsets you need to buy is fairly straightforward. First, start with the predicted annual energy use for each fuel type.
This value should be based on the results of the energy model, if Option 1 is pursued for EAp2 Minimum Energy Performance. If Option 2 or 3 is pursued, it should be calculated from the CBECS benchmark EUIs for electric and non-electric use.
Core and Shell projects: If Option 2 or 3 is pursued, the value should be calculated from the CBECS benchmark EUIs for electric and non-electric use. The energy should only include what’s associated with the core and shell area, or 15% of the project’s floor area, whichever is greater.
Convert the energy use to emissions using standard emissions factors from a credible third party, such as the U.S. EPA or World Resources Institute. Then sort these emissions into Scope 1 (onsite) and Scope 2 (grid-purchased).
Scope 1 emissions include all carbon-containing fuels that are combusted onsite, with emissions factors based on the composition of the fuel. Sources might include natural gas, fuel oil, wood, propane, kerosene, coal, and diesel.
Scope 2 emissions cover all purchased energy sources with upstream generation. Scope 2 emissions factors are based on tracking the fuel sources that feed the grid or that are used to generate the energy, and typically vary by country and region. These might include grid-purchased electricity, district steam, district hot water, or district chilled water.
After you’ve figured out your Scope 1 and Scope 2 emissions you can determine which type of green power, RECs, and/or carbon offsets you’ll need to purchase.
Types of green power
Three different types of purchases can contribute to earning this credit. However, the purchases must align with the emissions sources associated with the project.
Carbon offsets: Can be used to offset project emissions from any fuel source
Each carbon offset represents a verified quantity of avoided or sequestered emissions (usually one metric ton), and this representation can be sold or traded to help finance carbon mitigation projects.
Carbon offsets can be generated from a wide variety of different project types that may or may not involve renewable energy, such as landfill gas capture or reforestation. The projects are often completely disconnected from the purchaser, and the offsets are usually bought in bulk from a third party. Because they are generated by directly reducing emissions, carbon offsets can be used to cover project emissions from any source.
Renewable energy credits (RECs): Can be used to offset project emissions from purchased electricity only
RECs are similar to carbon offsets in that they represent a tradable or sellable quantity of avoided emissions. However, RECs represent the emissions avoided only by renewable energy projects that feed electricity grids. When a producer generates one megawatt-hour of renewable energy, a REC is generated and can be traded or sold separately from the power itself to help offset the cost of the renewable energy project.
Like carbon offsets, RECs are typically bought in bulk after they are generated from a third party. Because RECs are only associated with electric grids, they can only be used to offset purchased electricity. If the project needs to offset any Scope 1 emissions sources, district steam, district hot water, or district chilled water, a combination of both RECs and carbon offsets should be purchased.
Green power: Can be used to offset project emissions from purchased electricity only
Many utilities offer a green power option for their customers, typically from renewable sources that feed the same grid or are in the same region. Instead of buying RECs in bulk from a third party, a project with a green power arrangement pays a premium on electricity purchased from the utility on a per-kilowatt-hour basis, in return for the RECs associated with the renewable energy projects that feed the grid.
This arrangement helps incentivize the utilities to add more renewable power than their minimum legislative requirement, because the RECs can’t be double-counted between the utility and the consumer. Because green power is directly tied to an electric grid, it can also only be used to offset emissions associated with purchased electricity.
Defining “Green-e equivalency”
Green power, RECs, and carbon offsets must be Green-e certified “or equivalent” to contribute to this credit. Green-e is a U.S-based standard administered by the Center for Resource Solutions, which verifies the integrity of green power and offset producers, and prevents double-counting in the market.
RECs must be Green-e certified or the equivalent.
Before you purchase any non-Green-e power, RECs, or offsets for this credit, be sure to confirm that you’re purchasing through a third-party program that has the following features in place:
1. Verifiable chain of custody: The renewable energy or carbon reduction project must be identifiable, and individual RECs and offsets must be traceable from the producer, through all brokers or third-party entities, to the consumer.
2. Verifiable age of renewable energy: The period of generation should be included with each REC or offset, and must be within a maximum of a year and a half from the purchase date.
3. Tracking of greenhouse gas reductions from eligible projects: All producers must keep records of their generation and sales.
4. Mechanism to prevent double-counting: Each REC should have a unique ID number, and/or the third-party program should have an accountability framework (such as an annual audit) to make sure that credits are not being double-counted.
5. Third-party-verified retail transaction: An independent party must confirm that the renewable energy sold is valid and meets all the appropriate requirements.
6. Eligible project types for renewable energy: The Green-e program also includes standards for what can and cannot be considered a “renewable” energy source. Look out for these tricky cases:
- Hydropower is only eligible if it considered low-impact or small-scale (turbines in a pipeline or irrigation canal, for example).
- Wood fuel is only eligible if it is sourced from forestry waste from thinning or natural causes, or from post-consumer waste
- Biofuel is only eligible if it is not derived from consumable food
Green-e certified or equivalent programs
- Green-e Energy/Green-e Climate – United States
- Climate Action Reserve – United States
- American Carbon Registry – United States
- CDM Gold Standard – Global
- Verified Carbon Standard – Global
Alternative Compliance Path (ACP) options for international projects
- EcoLogo Program – Canada
- EKOenergy – Europe
- Guarantees of origin (when the dates of production and project details are all known – Europe
- Brazilian Certificado de Energia Renovável – South America
- India Central Electricity Regulatory Commission approved power exchanges (if built within the last 15 years) – India
Criticisms of RECs
RECs, along with carbon offsets, have come under criticism. This is largely due to the perception that they allow a person or a business to go on with business as usual, and then simply write a check to assuage their guilt, without producing tangible environmental benefit.
The Bear Creek Wind Farm in Bear Creek, Pennsylvania, with 12 Garnesa 2.0 MW turbines, was developed in 2005 by Community Energy, which sells renewable energy credits (RECs) from the project.
What’s New in the LEED v4.1 beta
The v4 Green Power credit has been removed from v4.1 and replaced with an off-site renewable energy option that lives within the new Renewable Energy credit. See here for further details.
