Ontario’s “misleading and illegitimate” system of clean energy credits is “little more than greenwashing” and “should not move forward,” a team of three researchers writes for the Canadian Climate Institute (CCI).
The province’s new voluntary clean energy credit registry, first announced last year and critiqued through last fall, will allow companies to make their power “look cleaner than it is” at a time when the grid itself is getting dirtier, write CCI Mitigation Research Director Jason Dion, Associate Professor Nicholas Rivers of the University of Ottawa, and CCI Research Associate Nikhitha Gajudhur, in a post originally published in the Toronto Star.
The credits take the form of certificates that each represent a megawatt-hour of clean electricity, the authors explain. Ontario’s grid is currently 92% non-emitting, mostly on the strength of its hydroelectric and nuclear plants. Buying credits would allow companies to count that clean generation against their own greenhouse gas emissions—with the intent, the government says, of generating revenue to drive down electricity costs.
The first problem with that plan is that it allows businesses to double-count the same units of clean electricity, with companies that buy credits claiming 100% clean energy, but everyone else calculating their indirect (Scope 2) emissions based on the average carbon intensity of the grid. That means clean energy credit buyers would claim the 100%, everyone else would default to the 92% average—but they’d be basing those claims on the same power.
“This kind of approach is misleading and illegitimate,” the three authors write, citing a January, 2018 methodology review in the journal Energy Policy. “For it to work, those companies that weren’t opting in would have to claim in their own corporate reporting that their electricity was only as clean as the generation mix that remained after the clean energy credits were sold and withdrawn from the generation mix. But changing their corporate emissions reporting in this way would require regulation, and would turn this voluntary scheme into a compulsory one.”
Ontario is also introducing the clean energy credits at a time when its electricity mix is getting dirtier, not cleaner. The authors point out that the province is developing 1.5 gigawatts of new gas plants while the aging Pickering nuclear station goes offline for an overhaul—producing an electricity shortfall made worse by the loss of a major wind farm and 758 smaller renewable energy contracts the Ford government cancelled after it took office in 2018.
Ontario is pushing ahead with the gas plant deal after an independent analysis late last year showed it could cut projected emissions 85% by 2035 and save up to C$9.5 billion on wholesale electricity by meeting new electricity demand with energy efficiency, solar, wind, and energy storage.
“There are policies Ontario could enact if it wants to expand use of clean electricity, and ways of leveraging corporate support. Alberta’s power purchase agreements and reverse auctions could offer some great lessons,” the CCI authors write.
“But selling clean energy credits from a dirtying grid under an accounting framework that double-counts the clean parts is a bad idea.”