Merit order is the rule that determines which power plants run first. The cheapest sources get dispatched before the expensive ones, which in practice means renewables go before gas or coal. More wind and solar on the grid pushes wholesale electricity prices down because fossil plants get bumped further along the supply curve. Both the EU's Electricity Market Design and the UK's Balancing Mechanism work this way. Where it matters for carbon accounting is that merit order only describes what physically happens on the grid. It says nothing about who gets to claim the clean energy. That's a different system entirely. Scope 2 reporting under the GHG Protocol relies on Energy Attribute Certificates like Guarantees of Origin to track renewable energy ownership on paper. Companies buy and cancel GOs through AIB registries or through platforms like Soldera Virtual Accounts, and that contractual process is what actually backs up their renewable energy claims, regardless of what the grid was doing at any given moment. So compliance teams are really working across two separate logics at once: the physical reality of which plants were running, and the contractual paper trail that proves their renewable procurement. Getting both right is what separates credible Scope 2 reporting from greenwashing.
Merit Order Definition



