Baseline Methodology

You have most likely heard the term “baseline scenario” while reading about a renewable energy project’s environmental benefits. Have you ever wondered how exactly is the baseline scenario defined and calculated? The following is a brief summary of how a grid-connected renewable energy source’s baseline scenario is determined. You can read the detailed consolidated methodology here.

There are two possible baseline scenarios defined under the ACM0002 methodology for grid-connected renewable energy sources. Each scenario carries a unique definition of baseline scenario along with the corresponding methodology for baseline calculation.

The first scenario is the installation of a new renewable energy facility to an electricity grid. The baseline scenario is calculated by taking the total output generated by the new facility and attributing that generated electricity to incremental facility additions to a grid as dictated by the Combined Margin (CM). (See Emissions Factor for more information on Combined Margin). The following equation can be used to calculate the baseline scenario emissions:

Where BE_y is the baseline emissions per year, EG_y is the generated electricity from the proposed renewable energy project, and EF_grid,cm is the CM emissions factor per MWh.

The second scenario is a project that modifies or retrofits an existing renewable grid-connected energy source. The equation for calculating the baseline scenario emissions under these conditions is similar to the equation above, but this time with an added term.

Where EG_baseline varies depending on whether it falls before or after DATE_{baselineretrofit}, the time when the existing equipment would be replaced/retrofitted in the absence of the project activity. Prior to DATE_{baselineretrofit}, EG_baseline is the historical average of electricity generated by the facility. This historical average requires data spanning a minimum of three years, five years for hydro projects. After DATE_{baselineretrofit}, EG_baseline is equal to the EG_y, making the baseline emissions scenario equal to zero.

DATEbaselineretrofit is determined by using either typical lifetime expectancy of such equipment based on technical literature, statistics, etc. or historical replacement records of responsible companies near the area of the project’s operations.

The logic behind this calculation structure is that the retrofitted facility would normally be upgraded to include the retrofits when the old facility equipment requires replacement. Furthermore, prior to the replacement date, the only baseline emissions taken into account are those generated by the extra margin of electricity produced by the introduction of a retrofit/upgrade.