On 6 December, Powerledger led a roundtable with key market stakeholders to explore the opportunities and challenges of 24/7 Carbon-Free Energy (CFE).
Data Access and Transparency
Moving toward a 24/7 CFE commitment requires both an understanding of hourly load profiles and access to hourly generation data, two challenges many organizations report grappling with. That said, companies understand that moving from renewable energy procurement based on net annual consumption to procurement based on hourly load profiles and location can dramatically increase the complexity and administrative requirements associated with renewable energy procurement. Companies expressed that as the data complexity increases there becomes a need for products that simplify and automate 24/7 CFE data gathering, reporting and renewable energy procurement transactions using unbundled RECs.
Importance of Carbon Emissions Data
Companies who make 24/7 CFE commitments are aiming to match each megawatt-hour (MWh) of consumption with renewable energy that is generated on their local grid during that hour. Increasingly, companies are also interested in the “emissionality” of the projects that they are purchasing from, asking how much carbon is being avoided from going onto the local grid at the time of generation and procuring from projects that have the greatest impact on carbon reduction. Access to granular and verifiable data for the location, time and source of energy is critical to assessing emissionality and improving our ability to identify when and where to deploy what types of power to meet commitments. Allowing companies to maximize the decarbonization of the grid and create a positive socio-environmental impact in the communities in which the power is being generated.
As the 24/7 CFE movement grows, there will be a need to rapidly increase the volume of time- and location-stamped instruments to ensure liquidity in the market, especially as more companies, municipalities, and other purchasers make 24/7 CFE commitments. Increased demand signals will create more opportunities in the market, with many good examples of virtuous cycles in emergent buyer-seller markets including Airbnb, Uber and Spotify. Verifiable attributes of equal value and the resulting price signals are expected to attract more sellers into the market. These granular price signals will help direct resources to where physical demand is located and where strategic impact is desired or valued. Hourly locational certificates also offer access for smaller businesses and municipalities to participate in the market; signalling a strategic opportunity for local developers. This demand has the potential to spill over into compliance markets.
Improved Reporting Frameworks
Stakeholders also expressed a need for better GHG and renewable energy reporting frameworks that incorporate both hourly renewable energy and carbon avoidance accounting. Providing such clarity should enable more potential 24/7 CFE participants to make commitments, with the assurance that global reporting frameworks will support their procurement efforts.
Starting Where You Are
One very apparent thing is that everyone is starting from a place that is unique to their circumstances, which is a good thing. 24/7 Carbon-Free Energy should not be something that intimidates or prevents potential participants from taking the first steps. As Voltaire is credited with saying, “perfect is the enemy of the good.” No matter what organization you're a part of, access to granular data and visibility across your energy portfolio (consumption, procurement, generation) with time, location, source and emissions stamping is critical for identifying your baseline to stay on track with your clean energy decarbonization strategy.