P-REC Avoided Emissions Calculator

P-REC Avoided Emissions Calculator: Methodology Guide

1. Overview

The P-REC Avoided Emissions Calculator is designed to bridge the gap between renewable energy procurement and verifiable, physical climate impact. Unlike standard unbundled RECs, which often apply to already-decarbonized grids, Peace Renewable Energy Credits (P-RECs) are deployed in fragile, energy-poor, and off-grid settings.

This tool provides a transparent, data-driven estimate of the avoided emissions generated by displacing highly polluting fuels (e.g. diesel and kerosene) with new renewable energy capacity. It also models procurement targets for companies adopting the SBTi Ongoing Emissions Responsibility (OER) framework.

2. Part I: Calculating Avoided Emissions

This calculator determines the climate impact of a P-REC purchase through three steps.

Step A: Establishing the Off-Grid Baseline

In the regions where P-RECs operate, the alternative to renewable energy is not a centralized utility grid, but a mix of highly polluting localized fuels. The calculator uses a default baseline mix informed by World Bank off-grid energy data (e.g., the ADELE project):

• Diesel Generators: 70% share (Emission Factor: 1.200 tCO2e/MWh)
• Kerosene: 21% share (Emission Factor: 0.150 tCO2e/MWh)
• Candles / Wax: 9% share (Emission Factor: 0.245 tCO2e/MWh)

Step B: Applying Conservative Discount Factors

To ensure impact claims are not overstated, the calculator applies two adjustable discounting parameters to the total MWh purchased:

• Displacement (%): The estimated percentage of the newly generated renewable electricity that displaces the baseline fossil fuels, rather than just meeting new latent demand.
• Delivery Confidence (%): A conservative buffer to account for potential project downtime, curtailment, or transmission inefficiencies.

Step C: Determining Final Climate Impact

The final avoided emissions are calculated by taking the effective volume of renewable energy and multiplying it by the net emissions avoided per MWh.

Note: The Project Emission Factor for new solar/wind/hydro generation is typically 0.

3. Part II: SBTi OER Procurement Navigator

The Science Based Targets initiative (SBTi) introduced the Ongoing Emissions Responsibility (OER) framework in the June 2026 update of the Corporate Net-Zero Standard. This framework encourages companies to take financial responsibility for their remaining emissions on the path to net-zero.

Based on SBTi’s recommended Contribution Budget (Money-for-Ton) pathway, our tool models procurement targets by applying an internal carbon price to the ongoing emissions footprint. This budget is then deployed to finance high-impact physical mitigation via P-RECs.

The OER Tiers

• 1% Recognized: The company physically neutralizes an amount equal to at least 1% of its annual Scope 1–3 emissions.
• 10% Scale-up: A proactive target demonstrating linear progress toward full responsibility.
• 40% Leadership: The company neutralizes a strict physical floor equivalent to 40% of its ongoing emissions, backed by a full internal carbon pricing budget.

The Calculation Logic

1. Determine the amount of emissions:
   Emissions Target (tCO2e) = Corporate Total Emissions × OER Tier Percentage
2. Calculate the budget:
   Contribution Budget ($) = Emissions Target (tCO2e) × Internal Carbon Price ($/tCO2e)
3. Translate to P-REC Procurement:
   Amount of P-RECs Procured (MWh) = Contribution Budget ($) ÷ P-REC Price ($/MWh)

4. Data Sources

All baseline assumptions and calculations are derived from leading public frameworks:

• Emission Factors: Sourced from the EPA GHG Emission Factors Hub for stationary combustion and off-grid lighting fuels.
• Baseline Assumptions: Informed by energy access diagnostics from the World Bank (e.g., Ethiopia ADELE Project).
• Policy Alignment: Modeled against the SBTi Ongoing Emissions Responsibility (OER) framework published in June 2026.

P-REC Claims & Reporting Guide

1. Introduction: P-RECs and the SBTi "Money-for-Ton" Approach

Under the Science Based Targets initiative (SBTi) Corporate Net-Zero Standard, the Ongoing Emissions Responsibility (OER) framework encourages companies to take financial responsibility for their unabated emissions on the path to net-zero.

SBTi recommends the "Money-for-Ton" (Contribution Budget) approach for Peace Renewable Energy Credits (P-RECs). Instead of attempting a 1:1 physical carbon offset, this approach asks companies to establish an internal carbon price, create a dedicated budget, and deploy that capital toward high-impact climate actions. P-RECs are highly aligned with this financial pathway.

2. Why P-RECs Align with the Contribution Budget

By deploying an OER contribution budget into P-RECs, companies go beyond standard carbon accounting to deliver systemic climate impacts. P-RECs directly support:

• Action Outside the Value Chain: Channeling vital climate finance to high-impact renewable projects in fragile states.
• Loss-and-Damage & Climate Justice: Compensating for climate impacts by targeting vulnerable regions historically excluded from green finance.
• Adaptation & Resilience Outcomes: Replacing polluting generators with distributed renewables (e.g., solar mini-grids) to power hospitals, schools, and local economies.
• Funding Innovation: Providing the critical revenue stream needed to de-risk and unlock early-stage clean energy solutions in frontier markets.

3. Suggested Template Guide for P-REC Procurement

This template illustrates how buyers could communicate their P-REC procurement and OER strategy in their reports and and public claims.