With nearly 400 members around the world, all committing to the ambitious goal of operating their business using 100% renewable electricity, RE100 has solidified itself as a global leader in driving corporate renewable procurement. In late 2022, RE100 announced changes to its technical criteria - or the rules that member companies follow in pursuit of their 100% clean energy targets - that will impact member companies and prospective RE100 signatories.
The changes include:
- Revising the definition of the single market for renewable electricity in Europe. Only countries in Europe that have certain conditions met will make up the single market boundary, thereby allowing renewable electricity procured within this market to be counted toward an RE100 goal. These conditions include: the country being a member of the Association of Issuing Bodies (AIB), the country needs to be in the EU single market, and physical grid connection needs to be established in order for a company to use cross-country GOs. There is a list of exceptions for areas which have small domestic energy production and import most electricity from neighboring countries.
- Limiting commissioning dates on renewable electricity purchases. There will now be a 15-year limit on the commissioning dates for purchased (not self-generated) renewable electricity that can be claimed by RE100 members.
Why is RE100 making these changes now?
The renewable energy market is an ever-evolving field that is being challenged by both the urgent need to decarbonize and the rapid uptake of climate action goals by corporations around the world, resulting in a significant uptick in demand for renewable energy projects and much more scrutiny being placed on renewable electricity usage claims. To account for market dynamics and the maintain the competitiveness of the RE100 label against other reporting frameworks, the technical criteria for RE100 members is revisited on a 2-year cycle.
These changes that are being implemented now are designed to improve the quality assurance of Guarantees of Origin (GOs) in Europe, and to accelerate the transition to renewable electricity by encouraging the use of newer assets. The changes will take effect on January 1, 2024, and companies with existing RE100 commitments that meet the current criteria will be grandfathered in until their contracts expire.
What immediate steps should businesses take?
Companies with RE100 commitments in Europe, as well as any company considering making a commitment, should take the time to understand their executed contracts and ensure that they will meet the new criteria. This may involve collaborating with developers on the expected operational commencement date, buying EACs generated prior to 2024, and retiring hydro GOs in Q4 2023. It is also important for companies to verify the commencement dates of any EACs they plan to claim beginning in 2024.
These changes to the RE100 technical criteria will present challenges, such as the potential for worsened price spikes and constrained supply of EACs. However, they also present opportunities for companies to accelerate the transition to renewable electricity and take a leading role in the fight against climate change. The new guidance also seeks to align more closely with the market boundary defined by CDP for its emissions reporting questionnaire, meaning businesses’ reporting practices will be more consistent across frameworks.
To understand how these new technical criteria from the RE100 will impact your business’s decarbonization roadmap, we invite you to connect with an expert on our Renewable Energy and Carbon Advisory team at Schneider Electric.