Hourly energy certification to guarantee more renewables use

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More than 100 companies, governments, and NGOs, including some of the world’s biggest energy consumers, technology firms, and utilities, are publicly backing a ‘world-first’ programme to improve transparency around renewable energy. The programme is led by EnergyTag, the independent industry-led initiative to accelerate the shift to 24/7 clean power.

EnergyTag has unveiled six projects worldwide to demonstrate a radical new approach to track the source of electricity in near-real-time. The aim is to provide consumers with transparency and confidence that the power they are buying is truly green and provide the price signals to the market to ensure clean power is available round-the-clock.

Organisations including Google, Microsoft and the US Federal Government, have recently announced commitments to source 24/7 clean energy. However, there is currently no recognised system of verifying clean electricity supply on an hourly basis. This is the problem EnergyTag intends to solve.

Although many organisations and individuals already buy energy which is classified as renewable through current certification schemes, the consumption of this energy is only matched to production on an annual basis. The problem is that as more renewable power plants are built, the availability of clean energy becomes increasingly volatile, meaning overproduction at certain times of day and scarcity at others.

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This causes significant daily fluctuations in the carbon intensity of the electricity system as a whole, leading some to suggest that new carbon accounting methodologies may be needed. In addition, under current mechanisms, renewable energy certificates are priced the same regardless of scarcity or oversupply, which does not provide a market incentive to fill the gaps.

A report published by EnergyTag sets out how energy consumers and producers can use hourly certificates to verify that the energy they consume is green hour-by-hour. Furthermore, the six projects aim to demonstrate how these more granular certificates can reward those that can provide renewable power at times of short supply, including storage and flexibility providers that are essential enabling a carbon-free electricity system.

Toby Ferenczi, the founder of EnergyTag, said: “Imagine trying to drink just the apple juice from a smoothie – it’s impossible when it’s all blended together! It’s the same problem with electricity. We need a transparent way of verifying the source of the power we consume each hour to accelerate deployment of the technologies needed to fight climate change.

“These demonstration projects, with some of the world’s largest energy consumers and utilities, showcase a new mechanism to accelerate the shift to 24/7 clean energy. We’re calling on more of the world’s largest energy users, energy companies and investors to participate and help achieve round-the-clock clean energy for everyone.”

The projects, the first of up to ten planned this year, are in the United States, Denmark, Netherlands, Sweden, Norway and Australia, and involve industry leaders Google, Microsoft, Vattenfall, Centrica, Energinet, Statkraft and Eneco. The first results will be published by the end of 2021.

Hourly energy certification – an evolution

Until now, there hasn’t been a system available for consumers to verify their electricity source on an hourly basis. Current Energy Attribute Certificates – known as Guarantees of Origin (GOs) in Europe, Renewable Energy Certificates (RECs) in the US and Renewable Energy Guarantees of Origin (REGOs) in the UK – are issued for each unit (MWh) of renewable electricity produced. Companies then purchase certificates to meet their annual energy demand. 

This system is well established and relied upon as a way for consumers to claim the source of their electricity consumption. However, these schemes, designed more than a decade ago, were developed to encourage the growth of renewables from a very low starting point and do not provide the temporal granularity necessary for reaching 24/7 carbon-free energy.

Phil Moody, EnergyTag Chair, added: “In order to achieve net-zero, we need confidence that our energy supply is 100% clean, 100% of the time. Renewable energy certificate schemes have played a key role in increasing wind and solar generation over the last 20 years. We now have the opportunity to introduce a more granular system that can enable consumers to achieve 24/7 clean energy.”

Supporters believe a market for hourly certificates will improve public perceptions of renewable energy claims, incentivise essential energy storage and support improvements in corporate carbon accounting.

Driving investment in essential storage and flexibility

The EnergyTag report states that a market for hourly certificates can also drive the growth of flexible technologies, such as storage or demand-side response, needed to achieve 24/7 clean power. This is because there will be a new incentive to provide clean energy at times when generation is scarce, i.e. during a still evening.

By creating a market for hourly certificates, EnergyTag will effectively reward clean energy that is available when supply is limited, providing a new pricing signal to drive investment in storage and flexibility. For example, a lack of hourly certificates during times of low supply will lead to higher prices for technologies that can provide clean energy during these hours.