Green Power Purchasing Frequently Asked Questions (FAQ)
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What is a “green power purchase”?

Short answer

Frustratingly, from the perspective of an end-use consumer on an electricity distribution grid, there is no accepted definition. A muddled miscellany of financial and contractual arrangements is commonly referred to as “buying green power,” most of which have little bearing on the origins of the electrical energy a buyer physically consumes. This reality presents challenges for representing “green power purchases” in a company’s GHG emissions reporting.

Long explanation

In the context of end-use consumers on a utility electricity distribution grid (versus from the perspective of an electric company acting as a Load Serving Entity), the answer here is ambiguous, as the grid is inherently directing and distributing a pool of electrical power. The fact that there is no empirically supported definition should give us pause and raise suspicion regarding green power purchasing and ownership claims. Several widely different types of financial and contractual arrangements are used to make the same sort of renewable energy (electricity) purchasing claims. Except in rare circumstances[1], none of these arrangements or transactions entail the physical and exclusive delivery of electrical energy from a renewable energy generator to a single organization’s facilities to power their loads. Yet, as an example, RE100 (2016) defines: “RE usage claims are claims by a specific grid customer or group of customers to be receiving or consuming RE, and/or claims by a supplier or distributor to be delivering or supplying RE to a specific grid customer or group of customers.” As a factual matter, electrical energy injected into a transmission and distribution grid by a renewable energy generator becomes part of an undifferentiated pool of electrical potential (not electrons) that all loads on the grid then draw upon in an undifferentiated and undifferentiable manner. So, any purchase and ownership claims have instead been conducted through financial and accounting abstractions (e.g., “renewable attributes”) that are cited in contractual instruments such as Renewable Energy Certificates (RECs), Guarantees of Origin (GOs), Power Purchase Agreements (PPAs), as well as a range of electric company-sponsored green power pricing and tariffs. The question, therefore, shifts to: what are these contractual instruments and what does it mean to “purchase” an “attribute”?

[1] For example, in a case where a direct transmission line is installed from a renewable generation source, such as a hydroelectric facility, to a single production plant (e.g., an aluminum production plant).