Quick Answer
If your organisation already purchases renewable electricity, the next opportunity to reduce Scope 2 emissions is not usually through changing suppliers again. Instead, it comes from reducing energy demand, improving energy efficiency, optimising building performance, strengthening energy data management, and generating renewable energy on-site.
Many organisations have already captured the biggest gains available through renewable electricity procurement. Future progress is more likely to be achieved through active energy management and operational improvements. Reducing electricity consumption remains important even where renewable electricity is purchased, because energy efficiency reduces demand and can lower location-based Scope 2 emissions as well as energy costs.
Watch our short video for an overview of how organisations can continue to reduce Scope 2 emissions after purchasing renewable electricity, including the role of energy efficiency, energy data, building optimisation and on-site generation.
What are Scope 2 Emissions?
Scope 2 emissions are the indirect greenhouse gas emissions associated with purchased electricity, steam, heating and cooling consumed by an organisation.
For many organisations, electricity consumption can be a significant contributor to operational emissions and is often an early focus when developing a carbon reduction strategy. Under the GHG Protocol Scope 2 Guidance, organisations operating in markets where product-specific or supplier-specific contractual information is available are required to report Scope 2 emissions using both:
- Location-based accounting: reflects the average carbon intensity of the grid where electricity is consumed.
- Market-based accounting: calculates Scope 2 emissions using eligible supplier-specific information and contractual instruments, such as qualifying renewable electricity products, power purchase agreements and energy attribute certificates. These instruments must meet the GHG Protocol Scope 2 Quality Criteria to be used in the market-based calculation.
The GHG Protocol Scope 2 Guidance sets out the requirements for accounting for purchased electricity and other forms of energy, including the treatment of contractual instruments used in market-based Scope 2 reporting.
For the wider greenhouse gas accounting context, our Scope 1, 2 and 3 emissions explained guide shows how purchased energy emissions sit alongside direct emissions and wider value-chain emissions.
Why has Reducing Scope 2 Emissions Become Harder?
For over a decade, many organisations achieved substantial reductions through three factors:
1 Renewable Electricity Procurement
Switching to renewable electricity contracts often enabled dramatic reductions in reported market-based Scope 2 emissions without requiring significant operational changes. The Scope 2 Guidance introduced accounting methods that recognise contractual renewable energy purchases.
2 Grid Decarbonisation
The UK electricity grid has become significantly cleaner over the past decade. According to RenewableUK, renewable technologies generated more than half of UK electricity for the second consecutive year, demonstrating how rapidly the electricity mix continues to decarbonise. This has reduced location-based emissions for many organisations, even where energy consumption remained unchanged.
3 Energy Efficiency Projects
Many businesses have already implemented straightforward measures such as:
- LED lighting upgrades
- HVAC optimisation
- Building management systems
- Smart metering
- Occupancy controls.
These improvements often delivered immediate energy and carbon savings with attractive payback periods.
Today, many of these “quick wins” have already been implemented, leaving organisations searching for the next stage of Scope 2 reductions.
Renewable Electricity Doesn’t Automatically Mean Lower Energy Consumption
One of the biggest misconceptions in corporate sustainability is that a renewable tariff solves Scope 2 emissions entirely.
While renewable electricity can significantly reduce market-based emissions, it does not reduce the amount of energy an organisation consumes.
Two companies could report similarly low market-based Scope 2 emissions while having vastly different energy performance:
Market-based Scope 2 emissions and energy efficiency measure different things.
Renewable electricity procurement can affect how emissions from purchased electricity are accounted for under the market-based method. Energy efficiency addresses how much electricity the organisation actually consumes.
Looking at market-based emissions, location-based emissions and electricity consumption together therefore provides a more complete view of Scope 2 performance.
Five Ways to Continue Reducing Scope 2 Emissions
1 Prioritise Energy Efficiency
Energy efficiency remains one of the most effective strategies available.
Every kilowatt-hour avoided reduces electricity demand and can reduce energy costs and location-based Scope 2 emissions. It may also reduce market-based Scope 2 emissions where the applicable market-based emission factor is above zero. Energy efficiency improvements can also reduce the amount of renewable electricity required to support net zero goals.
Opportunities include:
- HVAC upgrades
- Optimised heating and cooling schedules
- Variable speed drives
- High-efficiency motors
- Insulation improvements
- Building fabric upgrades
- Lighting controls
- Equipment replacement programmes.
Our practical guide to energy efficiency explores how organisations can take a structured approach to reducing energy consumption and improving energy performance.
2 Improve energy monitoring and targeting
Many organisations still lack detailed visibility of how energy is consumed across sites and operations.
Without accurate data, wasted energy often goes unnoticed.
Effective monitoring and targeting programmes can help identify:
- Out-of-hours consumption
- Excessive baseload demand
- Unexpected increases in usage
- Poorly performing equipment
- Opportunities for operational improvements.
Smart metering and half-hourly data provide valuable insight into energy performance and can support continuous improvement programmes.
For organisations managing complex estates, energy monitoring and targeting can provide the consumption data needed to identify excessive use, unexpected changes and opportunities for operational improvement
3 Optimise HVAC systems
Heating, ventilation and air conditioning systems are often among the largest electricity users in commercial buildings.
Common opportunities include:
- Reviewing operating schedules
- Correcting control settings
- Recommissioning existing plant
- Installing occupancy sensors
- Upgrading ageing equipment.
Even small improvements in HVAC performance can generate significant energy savings across multi-site estates.
4 Consider on-site renewable generation and energy storage
Organisations that already purchase renewable electricity may benefit from generating renewable electricity on-site. Solar PV can be combined with battery storage to retain surplus generation for use at another time. Stand-alone battery storage does not generate renewable electricity, but it may support peak-demand management and wider energy optimisation.
Options include:
- Solar PV
- Solar PV combined with battery storage
- Stand-alone battery storage as part of a wider energy-management or flexibility strategy.
Benefits can include:
- Reduced grid electricity consumption
- Increased energy resilience where generation and storage systems are appropriately configured to provide backup or islanded operation
- Protection against energy price volatility
- Improved visibility of energy generation and use.
On-site generation can complement existing renewable procurement strategies rather than replace them.
5 Prepare for electrification
Many organisations are replacing fossil fuel assets with:
- Heat pumps
- Electric vehicles
- Electrified processes.
While these technologies can support wider decarbonisation objectives, they often increase electricity demand.
Understanding how electrification affects future Scope 2 emissions is becoming increasingly important.
Businesses should model future electricity requirements and identify efficiency opportunities before electrification programmes significantly increase demand.
Common Scope 2 Mistakes Organisations Make
Focusing solely on emissions reporting
A low market-based Scope 2 figure does not necessarily mean an organisation is using energy efficiently. To understand true performance, businesses should monitor energy consumption, energy intensity, and both location-based and market-based emissions, ensuring carbon reductions are supported by genuine improvements in energy use.
Treating renewable procurement as the finish line
Renewable electricity procurement is an important milestone, not the end of the journey.
Long-term reductions require ongoing energy management and efficiency improvements.
Ignoring energy data quality
Poor data can undermine reporting accuracy and prevent organisations from identifying genuine opportunities for improvement.
Market-wide Half-Hourly Settlement will make more time-specific electricity-consumption information increasingly important to the operation of the electricity market. In TEAM Energy’s view, the availability and use of more granular consumption information strengthen the business case for clear ownership, validation and governance of organisational energy data.
What does good Scope 2 management look like?
Organisations making the greatest progress on Scope 2 emissions typically:
- Purchase renewable electricity
- Track both market-based and location-based emissions
- Monitor energy consumption continuously
- Maintain accurate metering and energy data
- Invest in energy efficiency programmes
- Optimise building performance
- Integrate energy management into business operations
- Plan for future electrification.
Scope 2 management is increasingly becoming about operational excellence rather than procurement alone.
Frequently Asked Questions
Can Scope 2 emissions be zero?
Market-based Scope 2 emissions may be zero or close to zero where qualifying contractual instruments support the use of an appropriate zero or low emission factor.
Location-based Scope 2 emissions will ordinarily remain while the grid-average emission factor for the area in which the electricity is consumed remains above zero. The location-based method uses an average grid factor and does not trace the specific electricity physically supplied to the organisation.
Is renewable electricity enough to achieve net zero?
No. Renewable electricity is an important component of a net zero strategy, but organisations must also address energy demand, Scope 1 emissions and Scope 3 emissions.
Which is more important: renewable electricity or energy efficiency?
Both are important. However, energy efficiency reduces the amount of electricity required in the first place, lowering costs and emissions simultaneously. Most organisations should prioritise reducing demand before securing additional energy supply.
What Organisations Should Do Next
For organisations already purchasing renewable electricity, the next stage of Scope 2 management should focus on what happens to electricity after it enters the organisation’s estate.
Consider:
- Reviewing both market-based and location-based Scope 2 emissions to understand the effect of contractual electricity purchasing alongside grid emissions.
- Tracking electricity consumption and appropriate intensity measures to distinguish accounting changes from improvements in energy performance.
- Using monitoring and targeting to identify excessive baseload, out-of-hours consumption and unexpected changes in demand.
- Reviewing HVAC, controls and building operating schedules for opportunities to reduce unnecessary electricity use.
- Assessing on-site renewable generation where it is technically and commercially appropriate.
- Modelling future electricity demand before electrifying heating, transport or other processes.
- Maintaining clear energy-data governance so that changes in consumption and emissions can be understood and reported consistently.
Renewable electricity procurement and energy efficiency should not be viewed as competing approaches. Procurement addresses the source and accounting of electricity, while effective energy management focuses on reducing and optimising the electricity an organisation actually uses.
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Author
Written by Graham Paul – Service Delivery Director
With over twenty years of experience in the energy sector, Graham leads service delivery, sales and marketing to enhance customer experience and scale TEAM’s carbon and energy services with a data‑driven, outcomes focus.