Renewable Energy
Renewable energy comes from sources that replenish on a human timescale: solar, wind, hydro, geothermal, and sustainably sourced biomass. Non-renewable energy comes from finite stores such as coal, oil, natural gas, and uranium.
Solar and wind now supply the cheapest new electricity in most markets, which has moved the question for most companies from cost to procurement. The options are on-site generation, a power purchase agreement, a green tariff from the utility, or unbundled energy attribute certificates. They differ in price, contract length, and in how strong a claim they support.
The reporting consequence sits in Scope 2. Under the GHG Protocol a company reports two figures: location-based, which uses the average emissions of the local grid, and market-based, which reflects the contracts and certificates it holds. Buying renewable electricity reduces the market-based figure. It does not change the location-based one.
Certificate quality decides whether the claim survives review. Auditors and frameworks such as CDP and RE100 look at whether the certificate matches the grid where the electricity was consumed, whether it covers the same period, and whether it has been retired rather than resold. Gravity tracks certificates against consumption so both Scope 2 figures can be produced from the same underlying meter data.
Frequently asked questions
What is renewable energy? +
Renewable energy comes from sources that replenish naturally on a human timescale, including solar, wind, hydro, geothermal, and sustainably sourced biomass.
What is non-renewable energy? +
Non-renewable energy comes from finite stores that are consumed faster than they form, including coal, oil, natural gas, and uranium for nuclear fission.
How does renewable energy affect a company's reported emissions? +
It reduces market-based Scope 2 emissions when backed by contracts or retired energy attribute certificates. Location-based Scope 2, which uses average grid emissions, is unaffected by procurement.
Related terms
Renewable Energy Certificates (RECs)
A Renewable Energy Certificate (REC) represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable energy source. RECs are used in market-based Scope 2 accounting to claim renewable electricity consumption, separate from the physical delivery of electrons.
Scope 2 Emissions
Scope 2 emissions are indirect greenhouse gas emissions from the generation of purchased electricity, steam, heating, and cooling consumed by an organization. They are called 'indirect' because the emissions physically occur at the power plant or utility, not at the reporting company's facilities.
Energy Management
Energy management is the systematic monitoring, control, and optimization of energy consumption in an organization to reduce costs, improve efficiency, and lower carbon emissions. It encompasses utility bill tracking, real-time meter monitoring, anomaly detection, efficiency project planning, and incentive capture.
Energy Efficiency
Energy efficiency means using less energy to deliver the same service or output. In the context of carbon management, energy efficiency is the fastest, lowest-cost decarbonization lever because every unit of energy saved reduces both operating costs and greenhouse gas emissions simultaneously.
Carbon Intensity
Carbon intensity is a ratio that expresses greenhouse gas emissions relative to a business metric — such as emissions per unit of revenue, per product manufactured, per square meter of floor area, or per employee. It complements absolute emissions by showing efficiency improvements even as an organization grows.
Net Zero
Net zero means reducing greenhouse gas emissions as close to zero as possible, with any remaining residual emissions balanced by an equivalent amount of carbon removal from the atmosphere. The SBTi Corporate Net-Zero Standard requires at least 90–95% absolute emission reductions before carbon removals can be used.