Green electricity procurement

Internal carbon pricing has a major role to play in managing the footprint of goods and services procured by government agencies. Under the so-called Climate Envelope scheme, funds are available for research on ways that carbon CO2 pricing can be implemented by local and regional government (‘lower government’). Via the Climate Alliance (on behalf of the Association of Netherlands Provincial Authorities, IPO), the Association of Netherlands Municipalities (VNG) and the Association of Water Boards (UvW) several projects are already underway to examine use of carbon pricing. 

One key issue is how to handle procurement of ‘green electricity’, i.e. renewably sourced electricity certified with a Guarantee of Origin (GO), for which there is currently no uniform methodology. At present, with most of the GO-certified electricity procured by lower government no CO2 emissions are allocated to power consumption. This is unsatisfactory for several reasons. In the first place, allocating zero emissions to green electricity removes any climate-motivated incentive for energy-saving (such as LED lighting or fitting switches on centrally controlled lighting systems). In addition, it means the party procuring the green electricity can allocate all its ‘CO2 benefit’ to himself, even though numerous other players and cash flows are involved in realising the renewable generating facility.

This study examines whether there is an alternative for calculating the CO2 emissions of the green power procured by lower government.