The ICP protocols and IREE certification provide a structured process for determining reliable energy savings estimates for energy efficiency projects. This guide offers a framework for converting ICP-determined energy savings estimates into GHG reductions.
Following these guidelines, one can create a GHG Plan that the defines an appropriate conversion from energy to GHG savings. In most cases these rules should be established by programs, governments, or investors.
Following these guidelines, one can create a GHG Plan the defines an appropriate conversion from energy to GHG savings. In most cases these rules should be established by programs, governments, or investors. This approach includes four required steps for converting ICP energy savings projections into GHG reductions. Each step must be detailed within a GHG Conversion Plan.
Step 1: Determine the method for converting electricity savings to GHG reductions. Step 2: Determine GHG values for electricity. Step 3: Determine GHG values for delivered fuels. Step 4: Convert energy savings values into GHG values.
If your IREE certification is required by an investor or program, contact them for their specific GHG Plan. Projects in Canada seeking IREE certification to access financing funding from the Canada Infrastructure Bank should contact the Canada Green Building Council for their program specific guidance. 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 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. It is important to choose an appropriate conversion methodology and understand how different methods may influence outcomes.
Step 1: Determine the method for converting electricity savings to GHG reductions
Selecting Monthly or Hourly GHG Conversion: Whether conversion from energy to GHGs is made monthly or hourly can profoundly affect calculated GHG savings. GHG per MWh varies based on seasons, hours of the day, and grid location. Choosing the right metric for an investor's goals is essential. Monthly or 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. Under this approach, GHG reductions are calculated by multiplying monthly projected and ultimately measured energy savings by a monthly GHG conversion factor per kWh. However, simplicity comes at the price of accuracy. For example, monthly GHG calculations were shown in New York City to undercount GHG savings in commercial buildings by 7% compared to hourly accounting, with upwards of 30% differences between monthly and hourly conversions in some cases. The inaccuracy of monthly conversions can be particularly acute for electrification projects or energy storage investments, which can increase energy consumption while resulting in significant GHG savings.
Hourly: Using hourly conversion mitigates this issue, providing more accurate GHG reduction values for peak reduction and load-shifting impacts. When using the hourly approach, hourly projected and ultimately measured energy savings are multiplied by hourly GHG conversion factors.
Marginal or Average GHG Values: Decide whether to use average or marginal GHG values for saved energy. Arguments can be made for either approach for different use cases. The journal article above outlines some of the pros and cons of each approach.
Operational Impacts or Lifetime Value: GHG efficiency reductions occur for the installed equipment's useful life. In some cases, GHG impacts may be included in ongoing reporting; in others, it may be appropriate to account for a project's lifetime impact 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 GHG reductions annually.
Step 2: 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 3: Determine GHG values for electricity
There are a range of monthly and hourly sources for GHG content of kWh. As an investor, you should select the GHG values that best meet your needs. Example resources for determining your GHG values include:
The EPA’s Greenhouse Gas Reporting Program (GHGRP) (U.S.)
National Inventory Report (NIR) (Canada)
eGRID database (U.S.)
Canadian Energy Regulator (CER) (Canada)
Carbon Trust
Enerdata
Climate Action Reserve
Open Energy Data Initiative (OEDI)
WattTime
The GHG Protocol
This list is just a starting point, as many more resources exist.
Step 4: 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 5: Convert energy savings values into GHG values.
You are ready to convert the energy savings projections developed through the standard ICP process into GHG reductions! Simply multiply the ICP energy savings outputs (monthly or hourly) by your selected GHG values. Energy simulation models typically operate hourly (8760 annual hours) and provide the granularity required for hourly GHG conversion.
Once your values are converted, you must choose whether to measure for operational or lifetime project impact. 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 GHG reductions annually.
Consider the source of EUL and any applicable discount rates. When accounting for long-term GHGs, you may also want to specify how GHGs are estimated to change over time (see the CA avoided cost calculator).
Required GHG Conversion Plan
To ensure consistency and accuracy, you must document your selected approach to GHG conversion within a GHG Conversion Plan. The plan must provide sufficient detail for project developers and QA providers to convert savings into GHG impacts consistently.
The plan must include:
Method for converting energy savings to GHG reductions, including:
Selection of Monthly or Hourly conversion
Selection of Average or Marginal GHG values
A narrative explaining why the chosen method was selected, considering both complexity and accuracy.
Source of GHG Values:
Source of GHG values for electricity
Source of GHG values for delivered fuels
Operational and lifetime GHG calculation considerations:
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 into the IREE Process
This 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.
