Position on transparency in renewable electricity reporting

IBM's strategy is to purchase renewable electricity that is generated in the grid regions where our consumption of electricity occurs. This approach enables IBM to actually consume the renewable electricity it purchases when the time of its generation and our consumption coincides, and creates incentives for our electricity suppliers to increase their renewable electricity generation in the places where we actually have demand for such power. IBM does not rely upon the purchase of unbundled RECs to offset its consumption of electricity from fossil fuels.

It is not possible in today's market, or in the foreseeable future, for IBM's business operations to actually consume 100% renewable electricity given our presence in over 170 countries along with the need for uninterrupted power, which is usually only made possible today by the use of fossil fuel and nuclear generation sources.

In the interest of transparency, we categorize our procurement of renewable electricity as either physical consumption or matched consumption with bundled RECs.1 Both categories represent scenarios in which an IBM facility and a renewable generation asset are connected to the same grid region (allowing electrons to actually flow from generation source to point of consumption).

  • Physical consumption means the time of generation and consumption coincide. In this scenario, IBM is able to consume renewable power real-time, as it is generated.
  • Matched consumption with bundled RECs means the time of generation and consumption do not coincide. This is the case, for example, when there is more renewable power being generated than what IBM needs to consume at a certain point in time. In this example, the excess renewable power is consumed by others within our same grid region.

We allocate our renewable electricity consumption among these two categories as follows, based upon our understanding of the sources and profiles of their output:

  • Biomass - 100% physical consumption
  • Geothermal - 100% physical consumption
  • Hydropower - 70% physical consumption and 30% matched consumption
  • Wind power - 40% physical consumption and 60% matched consumption
  • Solar power - 20% physical consumption and 80% matched consumption

Allocation of renewable electricity during 2019 in MWh
Total renewable electricity reported 1,789,988
By delivery type
Grid-supplied 841,608
On-site generation* 0
Contracted purchases 948,380
By category
Physical consumption 1,029,462
Matched consumption with bundled RECs 760,526
Unbundled RECs 0
*Although IBM consumes power from on-site solar arrays installed at three of our locations, we do not claim that consumption within our reported metrics because our local power suppliers retain ownership of the RECs.

For more information on our renewable electricity use, please see the "Energy and climate change" section of our latest annual environmental report on our Environmental reporting webpage.

1Even when IBM procures off-site renewable electricity that is generated in the grid region where we are physically located and consuming, we cannot say with certainty that the energy which actually comes to us was not generated from fossil fuels. That is because the time when renewable electricity is generated (when the sun shines or the wind blows) may not exactly coincide with the time when we are consuming energy. For that reason, our reporting will disclose what we assume for physical consumption (when the time of generation and consumption coincide) and matched consumption (when generation and consumption occur at different times, but still within the same grid region).