The ICP protocols and IREE certification provide a structured process for determining reliable energy savings estimates for energy efficiency projects. This guide offers ICP users with a framework for converting ICP-determined energy savings estimates into GHG reductions.
Converting ICP energy savings projections to GHG reductions includes the following steps. Each step must be detailed within a GHG Conversation Plan.
Step 1: Determine the conversion method from energy savings to GHG reductions. Step 2: Determine GHG values for electricity Step 3: Determine GHG values for delivered fuels Step 4: Covert energy savings values into GHG values
This appendix provides guidance on how to arrive at guidelines for each step and details the criteria for your GHG Conversion Plan.
Determining GHG Calculation Approach and Data Source
Focusing on GHG reductions involves converting energy consultation and savings from units of energy to reductions in GHGs. The current IREE methods, which focus on arriving at a reliable estimate for energy savings, remain the first step in this process. The following approach can allow for accurate and consistent conversion to GHGs to enable goal setting and reporting.
There is no single correct answer for calculating GHGs appropriate for all use cases, locations, and buyer priorities. What one measures will significantly influence what project developers and buyers focus on, so it is essential to adopt the correct GHG metrics for your program.
For example, monthly GHG calculations were shown in NYC to undercount GHG savings in commercial buildings by 7% compared to a more accurate hourly accounting, with upwards of 30% differences between commercial building sectors.
The entity underwriting and investing in a project for GHG savings should define in writing the methods to convert energy savings to GHG reductions.
Step 1: Determine the conversion method from electrical savings to GHG reduction
Monthly or Hourly GHG Conversion: Using yearly, monthly, or daily conversions from energy to GHGs can profoundly affect calculated savings. GHG per MWh varies based on seasons, hours of the day, and grid location. Choosing the right metric depends on the investor's goals is essential. Monthly vs. Hourly conversions can favor different building sectors and retrofit approaches and affect which retrofits are approved.
Monthly Using monthly data has the benefit of simplicity, requiring simply multiplying monthly projected and ultimately measured savings by per kWh monthly conversion factor. However, this comes at the price of accuracy, which can be particularly acute for electrification projects or energy storage, which, for example, will increase energy consumption but may have large GHG savings.
Hourly Using hourly savings requires hourly consultation data (Green Button) and hourly model outputs multiplied by hourly GHG values for each hour. This approach reflects a more accurate accounting of GHG impacts, making projects that focus on peak reductions reflect their actual impact and encourage not just energy savings on average but load shifting and flexibility.
Marginal vs. Average Decide whether to use average or marginal GHG values for saved energy. For different use cases, arguments can be made for either approach. This journal article outlines some of the pros and cons.
Accounting for operational impacts or lifetime value of projects GHG reductions from efficiency occur for the useful life of the installed equipment. In some cases, GHG impacts may be included in ongoing reporting; in others, it may be appropriate to account for the lifetime impact of a project based on its effective useful life (EUL).
For example, if your goal is to reduce a certain amount of GHGs by a date in time, then a lifetime GHG accounting method may be best to qualify a project. However, if your goal is a reduction in annual GHGs to achieve an ESG goal, you may instead want to underwrite GHGs annually.
The source of EUL and any applicable discount rates are factors to consider. When accounting for long-term GHGs, one may also want to specify how GHGs are estimated to change over time (see the CA avoided cost calculator).
Step 2: Determine GHG values for electricity
There are a range of monthly and hourly sources for GHG content of kWh. Sources should be agreed to in advance but may vary depending on the investor's needs.
Monthly Accounting For monthly GHG accounting, a range of public resources can provide metrics to establish guidelines for GHG conversion. The EPA’s Greenhouse Gas Reporting Program (GHGRP) in the U.S. offers aggregated monthly emissions data for various sectors. The National Inventory Report (NIR) provides monthly GHG data across industries in Canada. However, some counterparties, especially utilities or local regulators, may have alternative sources of GHG data.
Hourly Accounting For hourly GHG conversations, several options are available to ensure accuracy and comprehensiveness. In the U.S., the EPA’s Greenhouse Gas Reporting Program (GHGRP) and eGRID database provide emission rates for power plants. The National Inventory Report (NIR) and Canadian Energy Regulator (CER) offer comprehensive GHG data and energy production datasets in Canada. At the same time, the Canadian Carbon Exchange supports emissions trading with detailed tracking capabilities. Private sources also offer robust tools and data; for example, the Carbon Trust provides carbon footprint calculators with hourly data analysis, Enerdata offers detailed hourly analyses of energy consumption and GHG emissions, WattTime specializes in real-time emissions tracking, using machine learning to assess electricity carbon intensity, and the Climate Action Reserve manages carbon offset programs with hourly monitoring. The GHG Protocol offers guidelines for emissions reporting, and the Open Energy Data Initiative (OEDI) provides open datasets for hourly emissions analysis. Many other private sources exist, but these examples empower organizations to establish reliable guidelines for GHG conversion and data-driven decision-making.
Step 3: Determine the approach to delivered fuels
Identify conversion values for delivered fuels such as natural gas, propane, fuel oil, etc. Because delivered fuels are combusted on site and generally have consistent GHG emissions, these values are much easier to calculate and are typically not time-dependent.
Step 4: Generation of GHG Accounting Plan
To ensure consistency and accuracy in converting energy savings into GHG impact, it is essential to establish a clear and detailed GHG Plan document. This document should define the granularity, data sources, and other attributes necessary for GHG calculations within the project, program, or investment portfolio. The plan must provide sufficient detail for project developers and QA providers to convert savings into GHG impacts consistently. The key elements of the GHG Plan document should include:
GHG Data Granularity:
Specify the chosen granularity for GHG calculations (e.g., hourly, monthly).
Justify the selection based on project requirements, considering factors like peak load reductions and accurately reflecting true GHG impacts.
Data Sources:
Identify and agree on public and private data sources for GHG content of electricity and other fuels.
Examples include the EPA’s GHGRP, eGRID database, Canada’s National Inventory Report (NIR), and the Canadian Energy Regulator (CER), or private data sources like Carbon Trust, Enerdata, WattTime, Climate Action Reserve, GHG Protocol, and the Open Energy Data Initiative (OEDI).
Conversion Methodologies:
Detail the conversion of energy savings to GHG reductions, using either marginal vs. average GHG values.
Define the approach for different fuel types, such as electricity, natural gas, propane, and fuel oil, ensuring consistent GHG emissions calculations.
Effective Useful Life (EUL), GHGs over time, Discount Rates:
Establish guidelines for accounting for GHG reductions over the useful life of the installed equipment.
Establish any changes to GHG rates for future savings.
Agree on discount rates for future savings and consider the forecasted changes in GHG intensity over time.
Integration with IREE Process:
Outline the integration of GHG data into the existing IREE process, from data collection to energy simulation modeling and GHG calculation.
Ensure that the methodology aligns with the IREE framework, enhancing the accuracy and effectiveness of GHG emissions reductions.
3. Integration into the IREE Process
The proposed methodology integrates GHG data into the existing IREE process. This involves: Data Collection: Before project implementation, stakeholders collect energy consumption data for relevant fuels (e.g., natural gas, fuel oil, propane) and obtain hourly GHG emission factors for electricity. Savings Modeling: Energy simulation models are utilized to estimate hourly energy savings. These models typically operate hourly (8760 hours annually) and consider building characteristics, climate conditions, and operational parameters. If using a spreadsheet or other non-hourly approach, utilize those outputs. GHG impact does not impact the IREE forecasting process used to estimate savings but may affect how those savings are valued. GHG Calculation: Hourly energy savings from simulation models are multiplied by the corresponding GHG emission factors at the agreed-upon granularity, yielding GHG reductions for the project.
By adhering to these guidelines, stakeholders can create a robust GHG Plan document that supports the consistent and accurate conversion of energy savings into GHG impacts. This structured approach facilitates informed decision-making, prioritizes initiatives with significant environmental impact, and aligns with sustainability goals.
