With Evolving Scope 1 Solutions, Focus on Scope 2 Emissions, Suggests Retail Energy Provider

With Evolving Scope 1 Solutions, Focus on Scope 2 Emissions, Suggests Retail Energy Provider

Sarah Johnston presenting at FMI Energy & Store Development Conference.
Sarah Johnston presenting at FMI Energy & Store Development Conference. Photo Credit: FMI

For sensible sustainability, focus on scope 2 (indirect emissions from purchased power) solutions to start meeting carbon reduction goals, advised Sarah Johnston, Managing Director of Marketing and Carbon Roadmapping at Texas-based Calpine Energy Solutions.

Johnston compared energy usage solutions to “low-hanging fruit,” while the technology for scope 1 (direct emissions) is in a “rapidly evolving” phase, in a presentation at the Food Industry Association (FMI) Energy and Store Development Conference, held in Baltimore, Maryland, October 2‒4.

When asked how the refrigerant selection played into the overall energy picture, Johnston explained she was not a refrigerant expert. “What I do understand is that if it reduces the amount of energy used and is a cleaner source that reduces fugitive emissions, then you are better for it.”

On its Better Buildings website, the U.S. Department of Energy notes that natural refrigerants, including ammonia (R717), CO2 (R744) and hydrocarbons, are sustainable alternatives to synthetic refrigerants: “They can decrease energy, gas, and water consumption while permanently reducing greenhouse gas emissions from refrigeration.”

Johnston acknowledged that scope 3 emissions (from the value chain not as a direct result of activities) offer the “highest level of flexibility and creativity to solve” but have cumbersome data collection and often challenging implementation.

Carbon roadmap

As part of a retail energy provider active in every deregulated U.S. power market, Johnston focused on reducing scope 2 emissions as a starting point to meet carbon reduction goals. She gave three priorities for carbon management associated with power usage.

The first was to reduce usage. “The cheapest [unit of power] is the one you never have to buy again,” she noted. 

“The Inflation Reduction Act made money available for emerging technologies, research and development, and other green initiatives,” Johnston remarked. “Look at some of the efficiency projects and see what you could put into effect even if it has been only six months since you last looked.”

The second priority is to produce energy on-site. “The second cheapest [unit of power] is going to be the one that does not come with transportation,” she said. “Anything that you produce on site is going to be more effective than something bought that has to be delivered.”

The last priority is procuring the rest of the energy required by the organization. “The usage left is what we manage, including its cost, risk and carbon footprint.”

Though this prioritization is “pretty universal,” according to Johnston, the policies, strategies, execution and performance-tracking are customized to each business, with the goal of making it scalable and repeatable.

When creating carbon reduction goals, it is “imperative that all the different function groups take part” to decide what the company is willing and able to do, she said. Everyone needs to communicate concerns and issues with implementing a program.

Other considerations include:

  • What state regulations apply?
  • Is the goal carbon-based or renewable energy–based?
  • What standard or framework are you adhering to? “The thousands of standards have similar but slightly different criteria,” Johnston explained.
  • What do you want to say with the goal? To whom?
  • Is the goal percentage-based or absolute? Will it allow you to continue to grow and possibly emit more carbon than before?
  • How diversified would you like your target?
  • What are the cost objectives?
  • What baseline year are you going to compare yourself to?
  • What are you committing to, and how will you achieve it?
  • What are the potential risks, and how will they be monitored?
  • What would warrant a goal review and possible revision?

After defining goals, “guardrails create efficiency in carbon road mapping,” Johnston said. The guardrails include non-negotiable company policies, contract term limits, state regulations, the adopted carbon reduction framework, financial considerations, technology or structure limits, maximum or minimum hedge limits and geographic constraints.

“Finding the optimal solution manages costs, risks and carbon equally; it is not focusing on one at the expense of the other two,” Johnston explained, emphasizing the need for data management. “The more granular data you have with efficient access, the better suited you are from a state corporate commission perspective.”

As one of the largest energy suppliers in North America, Calpine Energy Solutions seeks to “help businesses transform their energy/carbon management programs from a traditional, transactional approach to a data-driven, sustainable business process,” its website says.

“The cheapest [unit of power] is the one you never have to buy again.”

Sarah Johnston, Managing Director Marketing and Carbon Roadmapping at Calpine Energy Solutions

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