Issue link: https://resources.tangoanalytics.com/i/1508312
LOCATION-BASED APPROACH This method of calculation reflects the average emissions intensity of the local electrical grid in which the energy consumption occurs, solely focusing on the emissions of the energy delivered to a company. Location-based methods solely consider the carbon intensity in the grid within the location where your physical operations are located and do not factor in any contractual agreements you might have: for example, location-based will not include any renewable energy credits (RECs) you may be able to claim or any other renewables you might be externally sourcing. For renewable energy, beyond what is included in grid averages, only on-site and direct-line sources are reflected in location-based accounting. This approach ensures that changes to renewable energy over time reflect actual changes to the grid. However, it excludes the vast majority of renewable energy purchases, which can help increase renewables on the grid, but don't necessarily include the direct delivery of the underlying renewable energy. The location-based method of calculating your scope II emissions is important in order to improve the comparability across multiple markets over time, and to show risks and opportunities that take into account average grid emissions. Another reason why location is relevant for companies to consider, for example, is preventing companies in renewable-intensive states like Washington or California from having to claim the same amount of grid emissions as a company in say, Oklahoma, where there is factually a significant lower percentage of renewable energy fed into the grid there. Importance/Relevance Reducing Emissions Because the location-based method does not take into account any contractual agreements you may have, the only way to reduce your location based emissions is to reduce your energy consumption, or increase your onsite renewable generation that is used directly at the premises. eGRID subregion emission factors: When calculating the scope II location-based emission in the US, you would use the eGRID (Emissions & Generation Resource Integrated Database) subregion emissions factors, which divides the US into different regions that approximate grid distribution areas. These factors are based on the electrical grid and not off of arbitrary state and city boundaries. For places outside the US, you would use national energy production emissions factors. These emissions factors are posted on the US EPAs website and are updated yearly. Sustainability & Energy Management Simplified