When we announced Cisco’s new environmental sustainability goals, one goal continued to require the most clarification from both internal and external stakeholders: having our corporate electricity emissions factor at half of the International Energy Agency (IEA) world average.
This goal, and it’s delicate wording, perhaps only makes sense to us sustainability nerds who are immersed in the Greenhouse Gas conversation…
Given the recent market report from the IEA on renewable energy, I thought a post would be useful to explain the reasoning behind this goal, and how it helps both Cisco and the planet by including this goal in our efforts.
What is Electricity Emissions Factor?
Electricity is generated in a number of ways, each emitting different amounts of GHG measures in tonnes of carbon dioxide equivalent (tCO2e) for every kilowatt-hour produced. This ratio is the electricity emissions factor. The lower the factor, the ‘greener’ the electricity being produced.
Coal-fired plants typically emit the most GHG per kWh followed by oil and then natural gas fueled generators. Wind, solar, geothermal, and hydroelectric facilities are considered renewable energy sources and produce zero tCO2e per kWh. The electricity emissions factor at an individual generation facility also depends on the specific plant technology, it’s operating conditions including weather, variances in the fuel (e.g., different types of coal), etc.
Data is collected and then shared by the IEA and other national and regional agencies such as the EPA and the Energy Information Administration (EIA) in the US. Cisco and other companies that report their carbon footprints use this data to convert their electrical consumption to GHG emissions.
How does Cisco’s goal impact renewable market advances?
As a significant electricity user (Cisco consumed over 1.4 million Megawatt-hours in 2012), Cisco can, and does, take action to reduce our electricity emissions factor. These actions in turn support the on-going development and deployment of renewables.
- Participating in the Renewable Energy Certificate (REC) market
Cisco is consistently in the top 20 largest national purchasers of RECs over the past 5 years. Buying Green-e Certified RECs supports the operation of existing renewable power plants and also provides a source of funding for future renewable generators. We primarily purchase RECs from wind generating stations.
- Buying utility green power
Through utility contracts and energy procurement strategy, Cisco purchases ‘green power’ – power from renewable sources – for the majority of our European operations as well as portions of our electricity in other global sites. Although we do not count this as zero-carbon energy in our GHG reduction goal (since unlike RECs it is not attributable), our demand for green power contracts creates market pressure for utility companies to build or source incremental renewable energy.
- Locating sites based on emissions factor
Although it’s not the only consideration, the emissions factor is part of the conversation as we decide where to place energy intensive operations. Since we prefer sites which have lower emissions factors, we can either choose to locate elsewhere reducing demand and consumption of higher-carbon electricity or work with the local utilities to increase their renewable portfolio.
- Developing our own renewable and lower-carbon power
We also have a small, but growing, portion of our energy coming from on-site sources including solar photovoltaics, solar thermal, and combined heat and power (CHP). Each of these installations provide zero or lower carbon emissions for the electricity that we consume. Plans are underway to significantly increase the amount of on-site renewable power in our portfolio. We are also actively discussing off-site power purchase agreements for renewable energy since off-site generation can be done more efficiently and cost-effectively at utility scale versus an on-site production facility.
Interestingly, as the global electricity emissions factor continues to drop, our goal becomes increasingly more difficult to achieve. While we gain the benefit of reduced carbon electricity for the carbon reduction goal, it will taking increasing efforts to get below 50% of the IEA emissions factor.
The latest medium-term market report from the IEA shows that our actions along with the actions of many other companies, government and non-government agencies, and concerned individuals is working. Data shows that market penetration of renewables is higher than projected, and new projections are very positive with renewables perhaps moving to the number 2 position in global electricity production behind coal and ahead of natural gas. Furthermore, the new projected levels are approaching a point that scientists indicate may prevent us from going beyond unsustainable GHG levels. Check out a great summary by Steven Lacey on Greentech Media.
With the recent announcements from the White House around both the Climate Action Plan and the Power Africa initiative, we expect this trend could continue in the US and globally. And we’re happy to do our part to promote the acceleration of renewable energy.