Article summary
The global market for power purchase agreements (PPAs) is preparing for changes that will affect how contracts are being structured. Naturally, this raises questions among corporate buyers.
The Greenhouse Gas Protocol, or GHG Protocol, provides standards and tools that facilitate the tracking of progress toward climate objectives by companies, organisations, countries and cities. The GHG Protocol is the most widely adopted global standard for corporate GHG accounting, having been used by 97% of disclosing S&P 500 companies in 2023.
The organisation is now in the process of updating its corporate suite of standards and guidance, including its Scope 2 Guidance, which will result in a fundamental change to how businesses account for their emissions from electricity consumption. A move towards hourly-matching is a big part of that. The planned update is expected to increase the complexity associated with procurement, which has always been one of the main concerns among corporate buyers.
Revisions to the Scope 2 Guidance, first introduced in 2015, will be shared through a 60-day public consultation period, starting in October.
Renewables Now spoke with Juan Pablo Cerda, CEO of clean energy procurement platform Renewabl, about the upcoming update to the Scope 2 Guidance and the recently rejected proposal in the UK to move to zonal pricing, both of which are of importance to corporate power purchasers.
Can you explain for our readers how Scope 2 updates and hourly matching will evolve the way companies account for emissions from purchased electricity?
"To answer the first point, the upcoming GHG Protocol Scope 2 update, together with the move toward hourly matching, will fundamentally change how companies account for electricity emissions.
"Instead of showing an annual average, organisations will need to demonstrate, hour by hour, how their consumption aligns with clean energy supply. Each hour of electricity use will have to be matched with the associated carbon intensity of the grid at that time. This makes accounting far more accurate and transparent. Companies can no longer claim “100% renewable” if, in reality, they’re using grid power during high-carbon hours.
"Worth clarifying: the Scope 2 update is about more accurate accounting and credible claims, not mandating 100% hourly matching from day one. As a buyer, you would want to know if your standalone solar PPA only offsets ~40% of your demand (and hedges only 40% of costs), versus a wind–solar mix that could cover closer to 70%.
"Contracts will increasingly use hourly price indices, where every hour of the day carries a different value depending on supply, demand, and carbon intensity."
– JP Cerda, Renewabl
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