“We are powered by 100% renewable energy.” – The impact of temporal and spatial matching in voluntary green electricity markets

The GHG Protocol establishes the global standard for measuring and reporting corporate scope 2 emissions, mainly from electricity consumption. The current accounting methodology allows companies to purchase renewable energy certificates (RECs) from another country to match their electricity consumption within the same year, allowing them to claim to be powered 100% renewable. However, under a currently proposed revision, companies will have to purchase RECs from the same bidding zone in the same hour of their consumption to make this claim. The intention is that sufficient demand for certificates will lead to an increase in the supply of clean energy. Given the current supply, would there be a shortage of certificates due to additional temporal and spatial matching, or are there sufficient RECs on the market? This study uses open-access data on past European REC sales and renewable energy production to empirically analyse the impact of these measures. We show that the impact greatly depends on country, time of day, and season. Although some countries might be able to meet the GO demand with storage, others require higher capacity or will face higher prices.