From Annual Averages to Half-Hourly Insight: The Future of Scope 2 Reporting

From Annual Averages to Half-Hourly Insight: The Future of Scope 2 Reporting

The future of carbon reporting is increasingly focused on data granularity and transparency, particularly in how businesses account for emissions associated with their electricity consumption.

At the centre of this shift are proposed updates to the Greenhouse Gas Protocol, specifically in relation to how Scope 2 emissions are calculated and reported. These changes are intended to better reflect how electricity is generated and used within a modern, increasingly dynamic energy system.

This blog explains what Scope 2 emissions are, why the current reporting approach is being reviewed, and how Crown Gas & Power can support businesses that want to stay one step ahead.

What is the Greenhouse Gas Protocol?

The Greenhouse Gas (GHG) Protocol is the most widely used global framework for measuring and reporting greenhouse gas emissions. It underpins many corporate sustainability disclosures, supply-chain reporting requirements and ESG frameworks.

Under the Protocol, emissions are grouped into three categories:

• Scope 1 – Direct emissions from sources a business owns or controls
• Scope 2 – Indirect emissions from purchased energy, such as electricity
• Scope 3 – Other indirect emissions across the wider value chain

The GHG Protocol is currently in the process  of updating its corporate suite of standards and guidance, including its Scope 2 calculation guidance which has not been updated in over 10 years

A closer look at Scope 2 reporting requirements today – and why it’s being reviewed

At present, UK businesses typically report Scope 2 electricity emissions using one or both of the following methodologies:

• Location-based:

This method applies emissions factors published by the Department for Energy Security and Net Zero (DESNZ), based on the average fuel mix and carbon intensity of the national electricity grid over the reporting year.

• Market-based:

This method does more to reflect a business’s specific supplier and/or contract arrangements. Often allowing businesses to report lower emissions through commercial instruments such as renewable-backed electricity tariffs, where annual electricity consumption is typically reconciled against an equivalent volume of Renewable Energy Guarantees of Origin (REGOs) or similar certificates.

These approaches have played an important role in supporting investment in renewable generation and providing businesses with greater choice in how they procure electricity. However, both methodologies represent average conditions rather than the circumstances under which electricity is actually generated and consumed.

In practice, electricity-related emissions can vary significantly depending on time of use, seasonality, and location. For example:

• Business A may consume a large proportion of its electricity overnight. Under a market-based approach, this electricity may be reported as renewable-backed, even though renewable output such as solar generation primarily occurs during daytime hours.
• Business B’s electricity consumption may peak during winter months, when grid carbon intensity is typically higher due to increased demand, reduced solar generation, and greater reliance on gas-fired power stations. However, reporting annual average emissions factors do not capture these seasonal variations and a
• Business C may be located in central London where generation, meaning its consumption is associated with higher transmission and distribution losses. While Scope 2 emissions are reported using national average factors, the physical distance between generation and demand can influence the actual emissions associated with electricity use.

As a result, the emerging direction of travel for Scope 2 reporting places greater emphasis on when and where electricity is consumed, and whether low-carbon generation is actually available at the time of use, rather than relying solely on annual averages.

What’s changing: A move towards time-based matching

This isn’t about making reporting more complex for the sake of it – It’s about improving transparency and ensuring reported emissions better reflect how the grid operates, as electricity systems become more dynamic, decentralised, and data-driven”

– Head of Regulation & Sustainability

The proposed Scope 2 guidance is exploring a closer alignment between electricity consumption and low-carbon generation. This has implications for both existing reporting approaches.

• For location-based reporting, a revised data hierarchy encourages organisations to prioritise time and location specific grid emissions factors over national averages where available, increasingly leveraging half-hourly metering data.
• For market-based reporting, rather than relying solely on annual certificates or fuel-mix disclosures, acceptable contractual instruments are expected to align more closely with the timing and location of actual electricity use, supported

A key development supporting the continued viability of market-based reporting is the emergence of hourly matched renewable contracts, which aim to align electricity consumption and low-carbon generation on an hour-by-hour basis, rather than across an entire year.

When might this affect your business?

Revised Scope 2 guidance is expected later this year, with practical implementation likely from around 2027. The consultation recognises that some businesses, particularly smaller organisations or those with longer-term energy contracts, may need time to adapt.

Even where reporting isn’t mandatory, many businesses are already seeing:

• Increased expectations from customers and supply chains
• Greater scrutiny of renewable and “green” claims
• Forward-looking discussions about future compliance and reporting costs

As a result, some organisations are beginning to factor these changes into their energy strategy now, rather than waiting for formal requirements.

How can Crown Gas & Power support?

We recognise that many businesses want their energy purchasing decisions to remain aligned with both commercial priorities and evolving carbon reporting expectations.

Through our existing and developing products and services, we can help provide the data and procurement options that support this journey, including:

• Hourly-matched renewable electricity options, supporting closer alignment between electricity consumption and low-carbon generation.
• Access to half-hourly consumption data via our customer portal, helping businesses better understand how and when energy is used.
• Flexible Biogas contract options, offering an alternative approach to addressing Scope 1 gas-related emissions.

While responsibility for carbon accounting and reporting remains with the business, these tools can support more informed decision-making as reporting expectations continue to evolve.