Allocating certificates

Edit online

In IBM® ESG Suite, a methodology is applied to allocate unbundled certificates across the electricity consumption of an organization.

Compliance & Jurisdiction

Certificates allocated against this category are the result of grid consumption multiplied by the renewable power percentage for the region and month. This renewable power percentage is managed by Envizi ESG Suite at a monthly level and is updated as required.

Green power

Green power, or bundled certificates, are certificates that are obtained by the organization through the purchase of renewable power through an electricity retailer. The organization doesn’t take formal ownership of the certificates purchased but can make claims to the certificates in market-based reporting.

This category of certificates requires that green power is captured in the same account as regular black grid electricity. For more information about how RECs are captured and handled in Envizi ESG Suite, see Renewable energy certificates.

Allocating unbundled certificates

Unbundled certificates are a useful tool when looking to reduce Scope 2 market-based emissions. The difficulty is understanding how these certificates can be applied to electricity consumption to achieve the emissions credit.

Envizi has provided a methodology to allow organizations to capture and allocate unbundled (voluntary) certificates to grid electricity consumption without requiring the organization to allocate certificates on an account-by-account basis.
Note: Unbundled certificates in Envizi ESG Suite must be allocated to locations that have at least some electricity for the reporting period. You cannot create a new certificate for the sole purpose of capturing the certifications. Under these circumstances, the certificates do not appear in reports.
You can apply certificates to 7 electricity data types. Unbundled certificates are applied and apportioned to levels of the classification group structure in the following order from lowest to highest:
  • Location
  • Level 3 group
  • Level 2 group
  • Level 1 group
  • State
  • Country
  • Organization
Note: The system uses the classification group structure for certificate allocation by default as this structure typically includes all groups. However, if you prefer to use the portfolio group structure, contact the IBM Envizi support team.

Methodology

For each level of allocation, the method determines the subtotal of remaining kWh, that is, consumption that is not covered by certificates, for each month of data. The method then prorates certificates captured in the data type against the subtotal. This is seen in the columns beginning with Certificates -. Then, prorated monthly certificate values are subtracted to arrive at the next subtotal.

In the following example, an organization purchases 10,000 kWh of unbundled certificates and applies the certifications to a level 3 group called Office Space that has two locations, Oakland office and Sydney office. The total consumption of electricity across both offices in a 3 month period is 45, 708 kWh. Reporting periods are normally 12 months, but 3 months was selected for simplicity. For the same period, the total consumption without certification allocation is 35,708 kWh. The system repeats this process at each level that certificates are apportioned.
Table 1. Methodology example
Location Month Electricity consumption in kWh Certificates in kWh Consumption with no certificates in kWh
Oakland office January 7,329 1,603 5,726
Oakland office February 9,302 2,035 7,267
Oakland office March 7,855 1,719 6,136
Sydney office January 8,162 1,786 6,376
Sydney office February 5,030 1,100 3,930
Sydney office March 8,030 1,757 6,273
Office Space N/A 45,708 10,000 35,708

Handing negative values

This report can apportion certificates across periods that contain negative consumption values. Organizations may have situations where accounts are added to true-up consumption by adding negative kWh consumption values for a site.

The system prorates and allocates certifications to those months with negative consumption. As a result, when you drill down to a monthly level, incorrect monthly values appear in the Certificates column. However, the summary rows show the correct values as the negative and positive values are summed to produce the correct value.

The rows with negative values in the Subtotal - Location kWh column are set to zero and the rows with positive values are shown prorated based on distributing the negative sum proportionally. The rows with negative values in the Subtotal - Location kWh column are set to zero and the rows with positive values are shown prorated based on distributing the negative sum proportionally.
Table 2. Handing negative values example
Accounts Month Subtotal - Bundled Certificates kWh Certificates - Location kWh Subtotal - Location kWh
Account A Sum   23,102 0 20,397
Account A Jan 7,421 0 6,552
Account A Feb 8,290 0 7,319
Account A Mar 7,391 0 6,526
Account B Sum   19,598 0 17,303
Account B Jan 7,528 0 6,647
Account B Feb 6,117 0 5,401
Account B Mar 5,953 0 5,256
Account True-up Sum   -5,000 0 0
Account True-up Jan -1,722 0 0
Account True-up Feb -1,556 0 0
Account True-up Mar -1,722 0 0
Grand Total   37,700 0 37,700
Note: The electricity consumption column shows zero for locations that report a negative value for the reporting period. This is because the level above the location appropriation would show misleading totals if negative values were allowed. If your data set contains a total consumption value with a negative value, an error icon appears. The value is not invalid in the report, as long as you can exclude the site with the negative value from the report.