Renewable Electricity Not Always Made In Ireland
Like many corporates, restaurant chain McDonald’s is on the path to net-zero emissions. Its ‘Plan for Change’ programme – out to 2040 for the UK and Ireland – encompasses premises built to a net-zero emissions standard, renewable and recyclable packaging, furniture made from recycled materials, sustainable ingredients, and even vegan burgers.
Like thousands of other businesses, McDonald’s buys only renewable electricity. In an Irish context, this means electricity generated by wind power. Perhaps the easiest win for a business seeking the green halo is sourcing green electricity, and power suppliers are eager to oblige.
Among the market leaders, Energia and SSE Airtricity only supply electricity with renewable credentials. At Bord Gáis Energy and Electric Ireland, the make-up of the fuel mix for the electricity they sell has a large gas component – 64% for BGE, and 34% for Electric Ireland. However, both suppliers also have dedicated green-electricity tariffs, and the renewable credentials are audited and certified by the Commission for Regulation of Utilities (CRU).
Electric Ireland notes that in 2020 it supplied 50% more electricity sourced from renewable generation, year on year, to business customers, and that over two thirds of its business electricity supply to customers is 100% green electricity. Going forward, all electricity suppliers are required by the CRU to inform customers through their bills how the fuel mix is constituted, and the associated carbon dioxide emissions’ intensity.
However, in a recent briefing paper the CRU reported that the fuel mix of each supplier does not necessarily represent metered generation in Ireland or Northern Ireland. This is because suppliers are permitted to claim the attributes of renewable electricity through certificates known as Guarantees of Origin (GOs), imported from other EEA member states. These certificates are issued for energy generated from renewable sources, and they are then issued to renewable generators.
This mechanism allows suppliers of electricity in Ireland to purchase the renewable benefit of generators of green power across Europe and include it in their total fuel mix. According to the CRU: ‘This means that the fuel mix presented on a bill by a supply company generally displays a higher percentage share of electricity derived from renewable sources than would otherwise be displayed if it was solely on the basis of the actual generated-in-Ireland renewable share of the supplied electricity.’
This stands to reason. EirGrid, operator of the national electricity grid, notes that electricity generated from renewables was 43% of the total in 2020. Wind generation accounted for most of the renewables, along with small amounts of hydro, bioenergy, ocean energy, and combined heat and power. Gas-powered generators created 50% of electricity last year, and there were also small amounts of coal-, peat- and oilpowered generation.
Though Ireland’s electricity generation from renewables can top 70% on certain days, when the wind dies down, the grid and suppliers have to turn to non-renewable generators. In such circumstances, if a supplier’s fuel mix is promised as 100% renewable, that’s only possible by offsetting the actual carbon intensity of the electricity supplied with purchases of GO renewable credits.
In Ireland, suppliers buy a significant quantity of GOs from other European countries, and the volume has been increasing in recent years. GO imports stood at 8.3m in 2017 and increased to 16.4m in 2020, with 12.7m GO certificates imported last year from Norway. Each GO unit corresponds to one MWh of electricity generated from a renewable source.
The CRU concedes that the system ‘is a somewhat complex system for consumers to understand’. However, the Commission points out that the GO arrangement is long established and has supported the addition of renewable generation across the EU.