IBM's strategy is to purchase renewable electricity that is generated in the grid regions where our consumption of electricity occurs. Our definition of "grid region" aligns with how the US Energy Information Administration defines power balancing authorities' territories. We apply the same concept for other jurisdictions.
By aligning with this definition of "grid region," we ensure that the renewable electricity we purchase can actually physically flow from point of generation to point of consumption. For example, we do not use purchases of renewable electricity generated in Texas to claim consumption of that electricity in New York because the two states are in different grid regions.
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 useh 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 electricity being generated than what IBM needs to consume at a certain point in time. In this example, the excess renewable electricity 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 2020 in MWh | |
|---|---|
| Total renewable electricity reported | 2,082,549 |
| By delivery type | |
| Grid-supplied | 562,301 |
| On-site generation* | 0 |
| Contracted purchases | 1,520,248 |
| By category | |
| Physical consumption | 1,241,950 |
| Matched consumption with bundled RECs | 840,599 |
| Unbundled RECs | 0 |
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).