Residual Mix methodology for IREC issuing countries AUTHORS HANNE LERCHE RAADAL AND MEHRDAD GHORBANI MOOSELU REPORT NO. OR.15.23 YEAR 2023 ISBN NO. 978-82-7520-916-8 ISSN NO. 2703-8610 REPORT TYPE Commissioned report PROJECT TITLE Residual Mix Methodology I-REC PROJECT NUMBER 3400 COMMISSIONED BY I-REC Standard NUMBER OF PAGES 11 KEY WORDS Residual Mix, Renewable Energy Certificates, Electricity, Tracking systems PHOTO FRONTPAGE I-REC issuing countries, taken from: https://www.irecstandard.org/world-map/ CONFIDENTIALITY Open Residual Mix methodology for I-REC issuing countries Summary The International REC Standard Foundation (I-REC Standard) is a non-profit organization that provides a standard for developing attribute tracking systems. The I-REC Standard ensures the highest quality systems and adherence to best practices designed to avoid double counting, double certificate issuance, and double attribute claims. An I-REC certificate for renewable electricity, I-REC(E) or I-REC, represents the environmental attributes of the generation of one-megawatt hour (MWh) of energy produced by renewable sources, and can be used to make end-user claims for energy/electricity consumption. According to the GHG Protocol a Residual Mix should be used by end-users for any electricity consumption not tied to an I-REC or other recognized tracking system that meets the Scope 2 Quality Criteria. The emissions from all untracked and unclaimed energy comprise a Residual Mix emission factor. Hence, the Residual Mix is an integral element in preventing double counting of renewable energy attributes in any energy tracking system. However, country specific Residual Mix emission factors are not frequently available for consumer Scope 2 calculations. Through this report, the I-REC Standard Foundation expects to contribute to enhance transparency and robust energy attribute markets globally. This report recommends implementing a modified Issuance Based (IB) method for calculating Residual Mixes to be used for I-REC issuing countries, valid for national tracking markets that are not legislatively linked in the same way as European markets are. It is further recommended that the national Residual Mixes are published within one year after the generation year, which means January in year X+2 for generation at any point in year X. However, redemption (or cancelation) data for attribute tracking certificates might still not be definitive at the date of publication. The modified method calculates the Residual Mix by withdrawing the issued volume from the generated volume in the respective year. It is therefore based on two assumptions: (1) potential unclaimed issued IRECs at the moment of publication are assumed to be redeemed over time, and (2) the Residual Mix volume is assumed to correspond to the volume of Untracked Electricity Consumption in the respective country. Hence, the occurrence of a potential surplus/deficit of attributes is not considered. Two checkpoint assumption tests are recommended to verify the potential impact of both assumptions for the Residual Mix calculation. The report also presents two different ways for calculating the direct CO2 emission factor for the Residual Mix, depending on the availability of data. Finally, it is recommended that I-REC Standard regularly reviews these methodologies and assumptions to ensure continued applicability. I-REC should regularly review annual calculated Residual Mixes and underlying assumptions to ensure the continued validity of the method. If, for example, surpluses and deficits of attribute certificates in markets are considered substantial or consistently increasing, or if unredeemed certificate rates tend to increase, the I-REC Foundation should reevaluate these methodologies and/or propose modifications such as implementing an expiry date for I-RECs (like in the European GO system). i Residual Mix methodology for I-REC issuing countries Contents Summary..............................................................................................................................................................i 1 Introduction ............................................................................................................................................ 1 2 Relationship of I-REC(E) certificates and Residual Mix ........................................................................... 2 3 Residual Mix method used by the European GO system ...............