CEP Sustainability & Energy Efficiency 3 — Questions and Answers
Question 1: Which of the following best describes a Virtual Power Purchase Agreement (VPPA)?
- A financial contract where a buyer pays a fixed price for RECs and the generator sells power to the market (Correct answer)
- A physical delivery contract for renewable electricity directly to a buyer's facility
- A utility tariff program that credits customers for on-site solar generation
- A government program that subsidizes renewable energy for large commercial buyers
Correct answer: A financial contract where a buyer pays a fixed price for RECs and the generator sells power to the market
A VPPA is a financial hedge where the corporate buyer receives RECs and the net settlement between strike price and market price, without physical power delivery.
Question 2: What does the term 'carbon neutrality' require beyond simply purchasing carbon offsets?
- Measuring, reducing, and then offsetting remaining emissions through verified projects (Correct answer)
- Eliminating all direct and indirect emissions before any offsets are purchased
- Purchasing enough RECs to cover 100% of electricity consumption
- Achieving net-zero Scope 1 emissions only
Correct answer: Measuring, reducing, and then offsetting remaining emissions through verified projects
Carbon neutrality requires first measuring all relevant emissions, implementing reductions, and only then using offsets to neutralize unavoidable remainder.
Question 3: A building's Energy Use Intensity (EUI) is best described as:
- Energy consumption per square foot of floor area over a year (Correct answer)
- The ratio of renewable to total energy used annually
- The percentage reduction in energy use compared to a baseline
- Total annual energy costs divided by the number of occupants
Correct answer: Energy consumption per square foot of floor area over a year
EUI measures kBtu (or kWh) consumed per square foot per year, enabling comparison of energy performance across buildings regardless of size.
Question 4: Which protocol provides the most widely used framework for categorizing corporate greenhouse gas emissions into Scope 1, 2, and 3?
- GHG Protocol Corporate Standard (Correct answer)
- ISO 14064
- CDP Reporting Framework
- TCFD Recommendations
Correct answer: GHG Protocol Corporate Standard
The GHG Protocol Corporate Accounting and Reporting Standard defines Scope 1, 2, and 3 emission categories used globally for corporate carbon accounting.
Question 5: What is the key difference between a 'bundled' and 'unbundled' REC transaction?
- Bundled RECs are sold with the physical electricity; unbundled RECs are sold separately from the power (Correct answer)
- Bundled RECs include multiple renewable technologies; unbundled RECs are from a single source
- Bundled RECs come with long-term contracts; unbundled RECs are spot purchases only
- Bundled RECs are utility-administered; unbundled RECs are broker-traded
Correct answer: Bundled RECs are sold with the physical electricity; unbundled RECs are sold separately from the power
In a bundled transaction, the REC travels with the electricity commodity; in unbundled, the environmental attributes are sold separately from the power.
Question 6: Which efficiency measure typically offers the fastest payback period in most commercial buildings?
- LED lighting upgrades and lighting controls (Correct answer)
- High-efficiency HVAC system replacement
- Building envelope improvements (insulation, windows)
- On-site solar PV installation
Correct answer: LED lighting upgrades and lighting controls
LED retrofits and lighting controls typically offer payback periods of 1-3 years due to low installation cost and immediate energy savings.
Question 7: In the context of Scope 3 emissions reporting, which category typically represents the largest share of emissions for most corporations?
- Use of sold products
- Business travel
- Employee commuting
- Purchased goods and services (Correct answer)
Correct answer: Purchased goods and services
For most companies, purchased goods and services (Scope 3, Category 1) represent the largest portion of value chain emissions.
CEP Sustainability & Energy Efficiency 3
Which of the following best describes a Virtual Power Purchase Agreement (VPPA)?