Issue link: https://resources.tangoanalytics.com/i/1508312
Coordinating with suppliers to purchase a specific product with lower emissions than the supplier's average emissions; these contracts can vary widely by region based on how the local energy grid is regulated, it is important to understand what is included in a supplier contract to assess the quality of the purchase, for example: whether the renewable energy is generated by the supplier or purchased from the market. Energy Attribute Certificates (EACs) There are different EACs depending on the market, for example, in the US the most common products are Renewable Energy Credits (RECs), and in Europe, the most common products are Guarantees of Origin (GOs) Certificates verifying the right to claim energy attributes, which can be bundled with the underlying energy or unbundled and purchased on a spot market; EACs can underpin other contractual instruments, such as a PPA or a supplier contract. Purchase Power Agreements (PPA) Supplier Specific Contracts Investing in a specific renewable energy project either including the underlying energy (Physical PPA) or including only the energy attributes (Virtual PPA). Contractual Instruments Purchasing decisions are underpinned by 'contractual instruments', which are contracts to claim the renewable energy attributes (e.g., 0 emissions), regardless of whether the underlying energy is purchased and delivered to the company. These contracts can vary widely across regions and markets, but these can include energy attribute certificates ( like RECs, GOs, etc), direct contracts (for both low-carbon, renewable, or fossil fuel generation), supplier-specific emission rates, and other default emission factors representing the untracked or unclaimed energy and emissions (termed the residual mix) if a company does not have other contractual information that meets the Scope II Quality Criteria. Contractual Instruments As defined by the GHG Protocol scope II guidance, a contractual instrument is "any type of contract between two parties for the sale and purchase of energy bundled with attributes about the energy generation, or for unbundled attribute claims. Sustainability & Energy Management Simplified