Electrical Grids and Storage
Criteria
Frequently Asked Questions
Table of Contents
QUESTIONS ON SCOPE ............................................................................................................................ 2
WHAT ASSETS AND ACTIVITIES ARE WITHIN SCOPE OF THESE CRITERIA?.................................................................. 2
MY BOND IS FINANCING EXCLUSIVELY TRANSMISSION LINES TO AN ELECTRICITY PLANT BELOW THE THRESHOLD OF 100G
CO2/KWH, BUT IT IS NOT FINANCING THE PLANT ITSELF. DOES THE PLANT NEED TO MEET THE RELEVANT CLIMATEBONDS CRITERIA FOR THE TRANSMISSION INFRASTRUCTURE TO BE ELIGIBLE? .......................................................... 2
ARE THE REQUIREMENTS FOR ELECTRICITY STORAGE THE SAME AS FOR ELECTRICAL GRIDS? ........................................ 2
QUESTIONS ON MARKET AND FINANCE .................................................................................................. 2
DO YOU SEE THESE CRITERIA BEING USED BY THE BOND MARKET? ......................................................................... 2
DOES CBI VIEW SECURITISATION AS GREEN IF THE BACKED ASSETS ARE GREEN AND/OR THE PROCEEDS FROM THE
SECURITISATION ARE USED FOR GREEN PURPOSES? ............................................................................................. 3
CAN COVERED BONDS BE CERTIFIED? ............................................................................................................... 3
HOW DO THE ELECTRICAL GRIDS AND STORAGE CRITERIA CORRESPOND TO THE EU TAXONOMY ON SUSTAINABLE
FINANCE?................................................................................................................................................... 3
QUESTIONS ON CRITERIA REQUIREMENTS ............................................................................................. 3
MY BOND IS NOT FINANCING INFRASTRUCTURE THAT DIRECTLY SUPPORTS OR LINKS TO A SINGLE POWER GENERATIONPLANT. HOW CAN I GET CERTIFIED? ................................................................................................................. 3
HOW DO I DETERMINE WHETHER MY SYSTEM GRID FACTOR IS BELOW 100G CO2 EQ/KWH? ..................................... 3
HOW DO I DETERMINE WHETHER AT LEAST 67% OF ADDED CAPACITY IN MY SYSTEM IS BELOW 100G CO2 EQ/KWH? .... 4
MY ASSETS ARE ON A GRID SYSTEM THAT IS NOT INTERCONNECTED AS PART OF ONE NATIONAL SYSTEM. HOW DO I
DETERMINE THE SYSTEM’S ELIGIBILITY? ............................................................................................................ 4
MY INVESTMENT WILL SPAN SEVERAL CONTROL AREAS THAT ARE INTERCONNECTED. CAN I CALCULATE THE ELIGIBILITY OF
THESE MULTIPLE SUBSYSTEMS? ...................................................................................................................... 4
WHAT DATA SOURCES ARE ACCEPTED WHEN EVALUATING A SYSTEM’S ELIGIBILITY? .................................................. 4
MY BOND WILL FINANCE THE INSTALLATION AND OPERATION OF SMART METER INFRASTRUCTURE? WHAT CRITERIA MUST
THE ASSETS MEET? ....................................................................................................................................... 5
CAN I DEMONSTRATE A SYSTEM’S ELIGIBILITY THROUGH PERCENTAGE OF ELECTRICITY GENERATION DERIVED FROMRENEWABLE ENERGY? ................................................................................................................................... 5
HOW SHOULD I MEASURE THE 100G CO2/KWH THRESHOLD? ............................................................................. 5

QUESTIONS ON THE THRESHOLDS .......................................................................................................... 5
HOW WAS THE 100G CO2EQ/KWH THRESHOLD PRODUCED? WHAT DOES IT SIGNIFY? ............................................ 5

Questions on Scope
What assets and activities are within scope of these Criteria?
Electrical grids
All assets and activities relating to electrical grids are within scope. This includes transformers,
transmission/distribution lines, interconnectors, communication and measurement infrastructure, andtechnology that increase renewable energy use. That is to say that they can potentially be certified under these
Criteria. Note, this does not mean everything is automatically eligible. Most assets and activities will be subject tomitigation requirements found in the Criteria document. However, some assets and activities are automaticallyeligible from a mitigation standpoint. The Criteria document states which types of assets and activities areautomatically eligible.
Electricity storage
Storage assets and activities are slightly more limited in scope. Anything where it is electricity in, electricity out,
is within scope. This includes battery and compressed air storage and excludes hydropower storage and hydrogenstorage, for example.
All assets and activities must meet the Adaptation & Resilience component of the Criteria.

My bond is financing exclusively transmission lines to an electricity plant below the threshold of 100g
CO2/kWh, but it is not financing the plant itself. Does the plant need to meet the relevant Climate
Bonds Criteria for the transmission infrastructure to be eligible?
No – so long as the issuer can demonstrate that the plants emissions are below the low carbon power threshold,any direct connections to that plant are, by extension, eligible. However, if a plant does meet the requirementsof the relevant Climate Bonds sector criteria (for example, the Solar Criteria), any direct connections to that plantis also eligible.

Are the requirements for electricity storage the same as for electrical grids?
With the exception of the list of automatically eligible assets and activities, which is more specific, grids andstorage must effectively meet the same criteria.

Questions on Market and FinanceDo you see these criteria being used by the bond market?
Grid and Storage investment will be crucial to meeting decarbonisation targets in line with limiting global warming
to no more than 1.5-degrees Celsius. This is due to the enabling nature of the infrastructure. As such, CBI will bepart of a global push to increase investment into electrical grids and storage, and we expect green bonds to be alarge part of this. There are already considerable and tangible prospects of certification. As of November 2021,
there is already the first certification under these Criteria.
Remember, the CBI Standard and Certification scheme is an additional layer of information which gives investors
an indication of whether this bond’s Use of Proceeds are aligned with the Paris Agreement. The inclusive natureof the Criteria means there are lots of opportunities for certification.

Does CBI view securitisation as green if the backed assets are green and/or the proceeds from thesecuritisation are used for green purposes?
It is our view that the actual use of proceeds should be green, not necessarily the securitised assets. In otherwords, it is the projects and assets which the proceeds are allocated to that have to pass the requirements of theStandard. While we encourage the use of green receivables for securitised bonds, it is not a prerequisite.

Can covered bonds be certified?
Yes, covered bonds can be certified. Provided that the assets to which the proceeds will be used are compliant
with their respective thresholds. However, we do not require that the pool of assets used as collateral in the
covered bond are compliant with the respective threshold.

How do the Electrical Grids and Storage Criteria correspond to the EU Taxonomy on Sustainable
Finance?
The Grids and Storage Criteria are aligned with the requirements for the corresponding economic activities in the
EU Taxonomy1. This means that if your bond is certified under these Criteria, the investment would be defined as
green under the EU Taxonomy, whether Transmission & Distribution or Storage of Electricity.

Questions on Criteria requirements
My bond is not financing infrastructure that directly supports or links to a single power generation
plant. How can I get certified?
Your bond may be financing assets and activities that do not directly support a single power generation plant. For
example, the project may be general transmission and distribution infrastructure across a whole grid system, ordistributed storage assets. There are two other ways these assets and activities can meet the criteria. Both takea system approach to eligibility. If the grid system in which the assets and activities will be located is on a pathway
to decarbonisation, any investment on that system is eligible 2. There are two ways to determine whether thesystem is on such a pathway:
1.
2.

The system grid emissions factor is below 100g CO2 eq/kWh on a rolling 5-year average.
67% of added electricity generation capacity (in MW or GW), over a 5-year rolling average, is comprisedof energy generation sources below 100g CO2 eq/kWh.

More detail can be found in the methodological notes within the Criteria document.
Equally, the assets may be found in the list of automatically eligible assets and activities. If the entire use ofproceeds will go to one or more of these assets in the list, the bond is eligible for certification.

How do I determine whether my system grid factor is below 100g CO2 eq/kWh?
There are a number of reputable sources which provide national grid emission factors. One is the International
Energy Agency (IEA), though this data is proprietary. The International Financial Institution methodology also
provides grid factors for most countries.

1 https://eur-lex.europa.eu/resource.html?uri=cellar:d84ec73c-c773-11eb-a925-

01aa75ed71a1.0021.02/DOC_2&format=PDF
2
Note: direct connections or supporting infrastructure to power generation plants above the energy generation threshold(100g CO2 eq/kWh) are never eligible

However, some subsystems will not be found within a single national interconnected grid. For example, Japan has
several grid systems that are not interconnected. The national grid factor would thus not reflect each individual
subsystem. In this case, the issuer would have to retrieve reputable data for that individual subsystem. This mightentail calculating the grid factor using the total emissions from electricity generation, against the amount ofelectricity generated.
Full details are in the methodological notes in the Criteria document.

How do I determine whether at least 67% of added capacity in my system is below 100g CO2 eq/kWh?
See the methodological notes in the Criteria document for full details.
Again, the issuer should use reputable data sources to carry out this analysis. Ideally, this would be directly
sourced from the network or system operator. Climate Bonds acknowledges that there are limitations in data
availability in this regard. Data availability for electricity generation capacity is far easier to retrieve for a single,
national interconnected grid system such as India. If the issuer is financing an investment into a subsystem at a
subnational level, they may struggle to find the level of granularity needed in data. Currently, there are few ways
round this limitation other than directly contacting the system or network operator for the data. Future iterationsof the Criteria will aim to solve this issue.

My assets are on a grid system that is not interconnected as part of one national system. How do I
determine the system’s eligibility?
This issue is discussed in the previous two FAQs above.

My investment will span several control areas that are interconnected. Can I calculate the eligibility ofthese multiple subsystems?
To determine compliance, it is possible to consider a system covering multiple control areas which areinterconnected and with significant energy exchanges between them, in which case the weighted average
emissions factor across all included control areas is used, and individual subordinated transmission or distribution
systems within that system is not required to demonstrate compliance separately.

What data sources are accepted when evaluating a system’s eligibility?
Data must be from reputable sources which are ideally directly sourced. This includes (in an approximate orderof preference):
For grid emission factors:••••

The system or network operator.
National electricity authorities or organisations. For example, the equivalent to the Central Electricity
Authority in India.
International Energy Agency (note this is not openly available data).
International Finance Institution methodology on grid factors.

For electricity generation capacity:••••

The system or network operator.
National electricity authorities or organisations. For example, the equivalent to the Central Electricity
Authority in India.
International Energy Agency (note this is not openly available data).
U.S. Energy Information Administration: provides national data on electricity generation capacity.

My bond will finance the installation and operation of smart meter infrastructure? What criteria mustthe assets meet?
The list of automatically eligible assets and activities in the Criteria document includes ‘Manufacturing,
installation, upgrading, leasing and/or operation of equipment to carry information to users for remotely acting
on consumption such as, but not limited to, advanced (also known as smart) metering infrastructure, including
customer data hubs.’
This infrastructure must meet, or correspond to, the requirements in Article 20 of Directive (EU) 2019/944.
Moreover, the key criteria for advanced metering infrastructure is that of two-way communication between the
consumer and the meter operator or utility. Full details can be found in methodological note 6 of the Criteria
document.

Can I demonstrate a system’s eligibility through percentage of electricity generation derived fromrenewable energy?
No. To demonstrate system eligibility one of the two criteria listed must be met – either:
1.
2.

Grid factor is at or below 100g CO2/kWh on average over the past 5 years; OR:
67% of added electricity generation capacity over the past 5 years is 'low carbon' or, in other words, ator below 100g CO2/kWh or lower. The Criteria document lists which energy technologies fall below thisthreshold.

How should I measure the 100g CO2/kWh threshold?
For connections to or from single generation plants, or a small group of plants, the carbon intensity of the plant(s)should be measure on a life-cycle basis. For entire systems, this then depends on the criteria being met. If gridfactor is used (number 1 under the previous question), it is the total of electricity emissions divided by the total
electricity generation for each year. If added capacity is used (number 2 under the previous question), the issuer
should check which energy technology falls below the 100g CO2/kWh threshold.

Questions on the Thresholds
How was the 100g CO2eq/kWh threshold produced? What does it signify?
This is a scientifically grounded threshold that reflects the maximum allowable CO2 emissions from power
generation today that would keep emissions within the carbon budget required for limiting global warming to no
more than 1.5-degrees Celsius. This is based against modelled future changes in electricity production. This
number reflects calculations in an EU context, but holds true as a global threshold. The CBI Hydropower Criteria 3
demonstrate how separate calculations of a global, 1.5-degree-aligned threshold also comes out as 100g
CO2eq/kWh.
The Criteria document references what energy sources are currently considered to fall under this threshold.
Ideally issuers will determine compliance with the threshold on a Product Carbon Footprint (PCF) basis. It is
accepted that not all issuers will be able to calculate the PCF of all electricity generated on a system, particularly
on large, interconnected systems. In lieu of this more complete picture, issuers can instead use approximate

3 https://www.climatebonds.net/standard/hydropowerassumptions of lifecycle CO2 emissions by energy source. According to the IPCC4,5, certain energy generation
technologies generally fall below the threshold of 100gCO2eq/kWh:
•
•
•
•
•

4

Solar
Wind
Geothermal
Hydropower
Nuclear"IPCC Working Group III – Mitigation of Climate Change, Annex III: Technology - specific cost and performanceparameters - Table A.III.2 (Emissions of selected electricity supply technologies (gCO 2eq/kWh))" (PDF). IPCC.
2014. p. 1335.
5"IPCC Working Group III – Mitigation of Climate Change, Annex II Metrics and Methodology - A.II.9.3 (Lifecycle
greenhouse gas emissions)" (PDF). pp. 1306–1308.