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Beyond the Megawatt: Clean Energy Procurement Can Optimize Positive Impacts On Communities And Planet

Beyond the Megawatt is a Clean Energy Buyers Institute initiative and this is the first of a series of blogs that will highlight its stakeholders, priorities, and impact.

Corporate climate goals play an instrumental role in decarbonizing our economy, including the electricity sector. Since 2014, Clean Energy Buyers Association (CEBA) members have led the transition to a carbon-free energy system by adding over 54 gigawatts of new clean energy capacity to the U.S. electricity system. Such growth in clean energy procurement provides an opportunity to maximize positive impacts on the environment and communities.

More thoughtful clean energy procurement can advance equitable community wealth-building, protection of our environment, and an electricity system that is resilient against natural disasters and supply chain disruptions.  

Many companies have recognized these opportunities and have already leveraged their procurement process for impact. For instance, 

As more companies continue to advance investments in clean energy projects that prioritize carbon-impact a new market need has emerged for educational support to help identify projects that best fit company priorities. 

The Clean Energy Buyers Institute’s Beyond the Megawatt, launched in May 2022, is a stakeholder-driven initiative that provides guidance for companies pursuing clean energy projects with resilient, equitable, and environmentally sustainable priorities. Beyond the Megawatt focuses on creating and evolving energy procurement tools and standards in three key areas:

Beyond the Megawatt has two simple but critical goals:

1. To develop procurement tools to help maximize the positive impacts of renewable energy, and
2. To deepen understanding of clean energy impacts through learning opportunities.

To ensure a diversity of stakeholder voices is represented, Beyond the Megawatt partners with energy customers, energy and service providers, NGOs, academia, researchers, community organizations, and other businesses to realize our goals. These stakeholders have helped explore various solutions and tools to embed resilience, equity, and sustainability into procurement practices. 

Stay tuned for the next blog in this series to learn more about upcoming energy customer company focused tools, learning opportunities through webinars, and peer-to-peer convenings. Interested in deepening your engagement or stay in the know on all things Beyond the Megawatt? Fill out this form online or send us an email to learn more about how you can engage.

Partnership, Impact, Churros … and other Highlights from CEBA at VERGE 22

“All of us here need to be driving impact faster.” Almost 500 CEBA members gathered in San Jose, CA, last month for CEBA at VERGE 22 and shared this sentiment articulated by Emily Williams, VP of Strategy & Sustainability at Edison Energy.

During the week CEBA members — as well as non-members in the clean energy industry — gathered to collaborate toward a clean, resilient, and accessible energy future. Over four action-packed days, we chatted, networked, and problem-solved through CEBA-hosted sessions, the CEBA Station, receptions, meals, and happy hours. We covered a lot, and here are the highlights.

WE GOT THIS

CEBA members were happy to be in the same room, doing what we do best — problem solving through discussion-based sessions. The positivity was inescapable. In every session and side chat, CEBA members knew this was the place to get change accomplished for a customer-driven clean energy future. As David Haines, CEBA’s Senior VP of Strategy and Impact, stated, “The answer to some of the hardest problems of our industry are solved by conversations like these in this room.” 

CEBA MEMBERS LOVE CHURROS AND CHATS

Hundreds of members came through the CEBA Station — not just for the coffee, churros, comfy seating, and CEBA pins — but for the compelling side discussions and networking. The Station was so popular — more so than we expected — that it was often standing room only. We heard over and over that partnership and collaboration is key to decarbonize the grid faster and cheaper. CEBA members talked about the hourly and location considerations for clean energy, clean technology, the power of organized wholesale markets, international markets … the list goes on. 

IMPACT OF THE CLEAN ENERGY BUYERS INSTITUTE (CEBI)

Almost all clean energy conversations asked the question: How can we create more impact from procurement? At the Beyond the Megawatt Initiative panel we learned tribal engagement is a key opportunity for the clean energy transition. Energy customers and providers should enter dialogues without assumptions and follow tribes’ leadership. This can create a respectful and mutually beneficial partnership which in turn can create benefits for all stakeholders. 

Want to dive deeper into impact? CEBA members are invited to join us at the CEBA 2023 Spring Summit. The Beyond the Megawatt Initiative will host a workshop to bring energy customers and providers together to test resources, identify tools, and create partnerships.

POLICY PRIORITIES

During a CEBA session, Darija Cosic, Energy Policy Manager at Meta, stated “this past year has been a whirlwind of policy activity, and there’s still more work to be done.” Energy customers have announced more than 57 GW of new clean energy in the U.S. since 2014 — equivalent to more than a third of what’s been added to the grid in that time. This has driven a massive amount of impact, and the Inflation Reduction Act will accelerate that trend. With the Bipartisan Infrastructure Law and CHIPS and Science Act, this year has most consequential set of investments and programs to date to advance clean energy and reduce emissions. However, additional work is needed in grid data harmonization, transmission reform, and organized wholesale market expansion to unlock the full benefits of these incentives. Members can stay up to date on newest policy and advocacy updates through the year and continue to move discussions forward at CEBA Connect: Spring Summit. 

WE ARE NOT DONE

The fun doesn’t stop at VERGE. Join us at CEBA Connect: 2023 Spring Summit, May 9-11, in Seattle, WA. Keep an eye out for hotel announcements before the end of the year to grab your room at the best rates!

At Spring Summit you’ll gather with peers for a week of conversation, collaborations, and discovery as we move forward down the path to customer-driven clean for energy all. CEBA members will explore a broad range of topics from U.S. energy procurement trends to international engagements to supply chain and how progress in the U.S. federal policy space will affect the future of clean energy. Register today

Be a part of our community to access to these events and join a collaboration of clean energy leaders working toward a 90% carbon-free U.S. electricity system by 2030.

Starting Your Clean Energy Procurement Journey: A Guide for Smaller Energy Customers

Small and Medium Businesses (SMBs) are increasingly entering the clean energy procurement space. While many large, experienced clean energy customers have laid the groundwork for a robust voluntary procurement market, most smaller energy customers are just starting. In a recent landscape analysis on clean energy procurement for SMBs, the Clean Energy Buyers Institute (CEBI) heard much to corroborate the idea that there are significant barriers to SMB engagement. We look forward to tackling these problems.

You’ll be happy to know, it’s not all doom and gloom. Experienced energy customers and service providers shared this wisdom for SMB clean energy customers that are just starting: 

  • Understand your business case for clean energy. If your company is getting into renewable energy credit (REC) purchasing for one year, anticipate being in the market for the next decade. Take a step back to determine what your company’s long-term commitment is going to look like. What are you trying to accomplish? Do you want access to renewables on-site? To make a claim that you are using clean energy generated in the U.S.? To have an effect on your local grid? Find a north star and communicate it to your REC broker or consultant to help them understand your goals and tailor your options. Otherwise, your company is likely to get caught in haphazard REC buying, which tends to be dissatisfying and much harder to sustain long-term.
  • Get used to budgeting for clean energy now. Although SMBs have limited clean energy procurement options, unbundled RECs are typically an option for all types of energy customers. Buying unbundled RECs is an accessible entry point into the market because it helps a company to establish its internal motivations and get used to budgeting for the cost of clean energy. As markets open, the company may be able to shift costs toward other methods of procurement. If possible, seek out longer-term options like REC strip agreements. This can help lock in lower rates for the years to come. 
  • Employ a portfolio approach. Treat your energy activities with a wholistic approach. Where can you execute energy efficiency upgrades to reduce your need for clean energy procurement? Where are retail options or utility green tariffs available? Which of your company’s facilities may be appropriate for on-site generation? As you leverage these options, you may be able to reduce the number of unbundled RECs you need to procure.
  • Engage your suppliers. Many SMBs do not own their own facilities, so some operational decisions — like energy efficiency and on-site clean energy generation — may not be in their control. Still, every tenant will negotiate a contract, and these negotiations are a prime opportunity to make a difference by raising sustainability concerns with a potential landlord. Explore the Clean Energy Buyers Alliance (CEBA) resources on engaging leased space owners and data facility representatives for insights on how to raise awareness of clean energy issues and potentially secure clean energy through your space providers.

The CEBI Small and Medium Business Accelerator (SaMBA) program is a collaborative effort to solve the toughest market barriers for smaller clean energy customers — and we want your input. Do you have ideas that may facilitate SMBs’ clean energy journeys? Do you want to stay informed as this work at CEBI progresses? Email ashby@cebi.org with your thoughts. CEBI and the SaMBA team would like to thank the Arthur Vining Davis Foundation for its financial support of this important work.

A Procurement Conundrum: Small Clean Energy Customers Encounter Roadblocks to Meeting Goals

Small and medium businesses (SMBs) have many of the same motivations for procuring clean energy as larger, more established clean energy customers. Procuring clean energy can help a company attract talent, stand out among competitors, and manage risk. But businesses with fewer employees, tighter cash flows, less substantial annual electricity loads (less than 100,000 megawatt hours [MWhs]), and/or no or low credit ratings face significant barriers to entry into the clean energy market. 

The Clean Energy Buyers Institute (CEBI) is determined to tackle these market barriers. The first phase of that endeavor — already underway — is conducting a listening tour to better understand the lay of the land. We have heard significant challenges but also great success stories. It is evident there is significant will from SMBs to make a meaningful impact in the clean energy space, but there are limited ways for SMBs to get involved. 

Seven of the biggest hurdles SMBs encounter include:

The CEBI Small and Medium Business Accelerator (SaMBA) program is a collaborative effort to solve the toughest market barriers for smaller clean energy customers — and we want your input. Do you have ideas that may facilitate SMBs’ clean energy journeys? Do you want to stay informed as this work at CEBI progresses? Email ashby@cebi.org with your thoughts. CEBI and the SaMBA team would like to thank the Arthur Vining Davis Foundation for its financial support of this important work.

Pack Your Bags, It’s Time For CEBA At Verge 22

Over 400 CEBA members will come together next week in San Jose, CA for CEBA at VERGE 22 to collaborate with leaders working toward a clean, resilient, and accessible energy future. Throughout the week, CEBA members will lead programming about today’s salient market solutions and opportunities to deploy clean energy. 

CEBA members, there are a few exclusive complimentary tickets left! Register through CEBA Interconnect. 

KICK OFF THE WEEK IN STYLE

The CEBA Welcome Reception on Monday October 24 is the can’t-miss event to kick off VERGE 22. This member-only outdoor gathering is the perfect time to re-connect and relax before the exciting content in the Energy Program. Make sure to be there at 5 PM for a special welcome from member AES and CEBA CEO Miranda Ballentine. 

CONNECT WITH ENERGY CUSTOMERS

CEBA Energy Customer’s Morning is a member-only opportunity for energy customers to connect with one another and exchange knowledge, questions, and innovative ideas. Collaborate with your peers to share solutions to market barriers on Tuesday at 9 AM. 

HAVE A CHAT IN THE CEBA STATION

Stop in for a coffee and a chat at the CEBA station all week long. In this members-only lounge, hang out with the CEBA board, the executive leadership team, and other CEBA staffers to learn more about CEBA initiatives — or just to ask SVP David Haines about life in DC and VP Mark Porter about his favorite cake.  There also might be some fun presents for members… you’ll have to come by to find out! 

JOIN THE MOVEMENT WITH THE CLEAN ENERGY BUYERS INSTITUTE (CEBI) CONTENT

Solving the toughest market and policy barriers to achieve a carbon-free energy system requires all hands-on deck, so be sure to add these sessions to your schedule. On Wednesday afternoon, join the Beyond the Megawatt Initiative for the Maximizing Clean Energy Benefits with Tribal Communities panel. Learn about ongoing efforts to enhance the positive impacts of the energy transition with tribal and indigenous communities.

The CEBI Next Generation Carbon-Free Electricity Procurement Initiative will host an interactive session Wednesday morning to explore how energy customers are driving different forms of next-generation impact on the electric grid through procurement approaches. Be sure to check out the recently published Next Generation Carbon-Free Electricity Procurement Activation Guide.

CLOSE OUT YOUR WEEK WITH CONVERSATION SESSIONS

Get into small groups and chat with experts on a variety of topics related to solutions, gaps, and challenges in the market. Interested in community solar or financing post-Inflation Reduction Act? There is a Conversation for you. On Thursday afternoon at 1:30 PM, participate in several 20-minute rounds of these table discussions. See the full list of conversation topics.

For the full agenda with session descriptions, visit the VERGE 22 Energy Program. Looking for other things to do outside the conference center? Check out Top 5 Things to do in San Jose. Stay up-to-date on the latest CEBA at VERGE 22 news – follow CEBA on Twitter and LinkedInBe a part of our community to join a collaboration of clean energy leaders working toward a 90% carbon-free U.S. electricity system by 2030.

CEBI Releases Its Next Generation Carbon-Free Electricity Procurement Activation Guide

The Clean Energy Buyers Institute’s NextGen Initiative aims to expand the menu of carbon-free electricity procurement options available to clean energy customers, to help customers optimize the decarbonization impact of their procurement decisions and accelerate systemic grid decarbonization.

To advance a future point when all energy customers across the globe will have access to carbon-free electricity (CFE) at all times, no matter when or where someone flips on the switch, we need to accelerate the deployment of CFE resources and deliver systemic grid decarbonization.

We have an opportunity to leverage the tremendous demand power of energy customers and maximize the impact of voluntary CFE procurement to accelerate systemic grid decarbonization. By expanding the menu of available CFE procurement options to include next generation solutions, energy customers can send more powerful, targeted market signals that drive investments and accelerate the deployment of CFE in the most carbon-intensive locations and times of day. 

The challenge customers now face is that the voluntary market system neither cultivates the full menu of CFE procurement options nor provides the incentives necessary to empower customers to play an even more powerful role in reaching a future state where the grid is carbon-free every hour of every day of the year, everywhere. Energy market system stakeholders — including energy attribute certificate (EAC) issuing bodies and registries, data providers, customer leadership programs, and greenhouse gas (GHG) accounting standards bodies — must implement updates that collectively evolve the voluntary market system and activate the next generation of procurement solutions that deploy CFE investments for systemic grid decarbonization. 

Today, the Clean Energy Buyers Institute (CEBI) published the Next Generation Carbon-Free Electricity Procurement Activation Guide to provide a customer-oriented roadmap for market system stakeholders, outlining the updates that diverse market system stakeholders must make to broaden the CFE procurement menu for customers. The Guide synthesizes insights from 10 workshops that the Clean Energy Buyers Institute (CEBI) convened in 2022 and provides a foundation for CEBI’s ongoing engagement with the 100+ energy customers, solution providers, and market system stakeholders that together comprise the NextGen Activator community.

The Guide offers detailed specifications about critical updates and the implementation pathways available specifically to EAC issuing bodies and registries, data providers, customer leadership programs, and GHG accounting standards bodies, with the aim of providing solutions that address energy customers’ eight objectives for next generation procurement. The Guide also provides four principles for voluntary CFE market updates that enable expansion of customer choice and access to solutions that optimize the decarbonization impact of CFE procurement decisions, while concurrently maintaining entry points for new and more customers to play their part in scaling CFE.

Key takeaways from the Guide include: 

  • Expanded CFE procurement menu: Customers want a broader menu of options to advance the systemic decarbonization of the electric grid and achieve their next generation procurement objectives. Solution providers should address as many of the eight customer-identified objectives as possible in their next generation CFE solution offerings and make it easy for customers to understand how these solutions help them optimize the decarbonization impact of procurement decisions. 
  • New EAC attributes: EAC issuing bodies and registries should make five new EAC attributes available in a consistent way and modernize their automated programming interfaces (APIs) to enable solution providers to deliver next generation solutions that customers can substantiate in their CFE procurement claims.  
  • More granular and consistent data access: Data providers should deliver needed data to EAC issuing bodies and registries for these five new EAC attributes, so EAC issuing bodies and registries can capture these EAC attributes. 
  • Recognition of next generation goal setting and defined success metrics: Existing and/or new leadership programs should offer next generation goal-setting criteria for customers to pursue. Customer success in achieving program-specific goals should be straightforward, consistent, achievable, measurable, comparable, verifiable, and marketable. Regulatory bodies like the U.S. Federal Trade Commission should also provide more detailed guidance about the distinct marketing claims that customers can make based on the EACs they procured and report. 
  • Clarifications and gap-filling in greenhouse gas accounting: Greenhouse gas accounting standards bodies should clarify how to conduct greenhouse gas accounting for next generation procurement solutions, to make it easier for customers to document and report the verifiable impact of their CFE procurement, and accounting bodies should make these updates more agile, like software updates.  

As a roadmap for implementing new CFE market infrastructure, this Guide will inform CEBI’s research and education priorities for the NextGen Initiative as it pivots from understanding the market updates needed and implementation pathways available to the next phase: informing and empowering market system stakeholders to implement updates and activate next generation procurement options for customers, enabling customers to help accelerate systemic grid decarbonization and optimize the decarbonization impact of their procurement decisions.

CEBI invites customers and solution providers to contact us to provide more details about your objectives, needs, challenges, ideas, and questions about next generation CFE procurement. CEBI also welcomes inquiries from market system stakeholders, to discuss ways to support your organization in gaining support, planning, and/or implementing the updates applicable to your organization described in this guide. Please contact CEBI at NextGen@cebi.org to learn more. 

On October 13 from 2 to 3 p.m. Eastern time, CEBI will present an in-depth webinar to discuss this Guide. Register here. Download the Next Generation Carbon-Free Electricity Procurement Activation Guide.

IRA is a Gamechanger, but only if we are on a level, frictionless field

To ensure we unlock the Inflation Reduction Act’s full potential, we must prioritize markets and transmission.

When Senator Manchin announced a surprise, black-box deal with Majority Leader Schumer on the 2022 Inflation Reduction Act (IRA) this summer, suddenly it became like the chaos of a game of 52-card pick-up — even for an organization like CEBA, which has proactively supported and developed the clean energy provisions since the beginning of the reconciliation process. All politics aside, as we picked up the cards, we started to like what we saw. 

Namely, the 10-year, technology neutral clean energy tax credits, which will accelerate both the scale and pace of a broad suite of clean energy generation by providing as much policy certainty as possible. 

Second, between the CHIPS and Science Act and the IRA, we are signaling that we want to make as much of the clean technologies of the future as possible in the U.S.

Of course, the IRA also sets a third major transformation in motion with an unprecedented foundation for electrification that is beyond CEBA’s scope, but combined, these approaches are aimed at tackling some of the biggest barriers to clean energy deployment: getting costs down, uncrimping and shoring up supply chains, and providing stable market signals to go “get after it!”

And yet, the IRA doesn’t immediately solve market issues for customers who generally don’t take the tax credits directly. Despite contracting for 37 percent of all new wind, solar, and storage in the last 10 years, predominantly through power purchase agreements (PPAs), the biggest bottleneck for customers besides increasing costs and supply chain and tariff disruptions, remain: 

  1. Frozen interconnection queues mean projects can’t get connected to the electric grid.
  2. Broken transmission planning processes that mean we have woefully inadequate transmission to move power across more reliable, interconnected grids.
  3. Lack of access to organized wholesale markets in 1/3 of the country, where customers can transact in for power purchase agreements, or markets that bring transparency and price competition to protect customers against uncompetitive rate increases.

So that leaves us with the question – what can the IRA do to help customers who want to drive clean energy deployment?

Immediately, perhaps very little. Contracts well under way may not be able to flow the value of the tax credits to the customer, and over the course of the next few months, the U.S. Treasury Department and IRS will need to give guidance on how to best optimize the credits’ value. The value of these credits could be as much as 50 percent for the Investment Tax Credit (ITC), for example, depending on whether it is tied to prevailing wages, apprenticeships, domestic sourcing, and proximity to energy and disadvantaged communities. 

But past the horizon, there are signs of optimism that it is possible to break down the logjam preventing customer demand from being realized. And significantly, these tax credits could help tip the balance in regions where markets do not exist and where utilities have historically demonstrated a preference for building and operating fossil fuel power plants.

  • The IRA makes the tax credits refundable for public entities including colleges, universities, municipalities, and rural cooperatives, which generate upwards of 20 percent of all U.S. electricity, enabling previously excluded public entities to join the clean energy market.
  • There are specific provisions to help rural co-ops transition to cleaner forms of energy, where previously they were economically stuck.
  • The technology neutral incentives mean there is new life breathed into existing nuclear plants needed for clean baseload. And the extension of the credits to small modular nuclear reactors, hydrogen and carbon capture will lower the cost and accelerate the time in which these promising technologies could become economically viable, giving fossil fuel dependent utilities options to maintain their existing plants but still meet zero carbon expectations.
  • These credits will level the playing field enabling incumbent utilities to capture the value of the new credits and profit from developing renewables in the same way as independent developers, which if done under competitive solicitation, could bring a lot of new clean energy to all customers at lower cost.

The Rhodium Group estimates IRA’s clean energy incentives will lead to 75 percent of IRA’s GHG reductions and clean energy will comprise 80 percent of all electricity generation in 2030. That peacefully assumes no regulatory friction slowing or preventing clean energy projects from deploying. The ultimate success of the bill and for customers will depend on whether we can smooth the deployment path by addressing interconnection queues, getting transmission planning right to build the grid “inter-state highway system” of the 21st century, and making sure markets are there and working to ensure clean energy is available at lower costs on a level playing field. 

Addressing those bottlenecks and barriers takes us to the regulators and the states, but if we can smooth that path, then we are solidly in the game for achieving not just CEBA’s aspirational vision of a 90% decarbonized grid by 2030, but unleashing tremendous benefits for the country, and the world. 

Come join us to tell that story, and check out CEBA’s work on markets and transmission here

For a summary of the Inflation Reduction Act click here.

With Targeted Updates, the Greenhouse Gas Protocol Can Accelerate Customer-driven Clean Energy and Unleash Next Generation Procurement

The Clean Energy Buyers Institute’s NextGen Activator workshop series is identifying the market system updates necessary to broaden the suite of carbon-free electricity procurement options so customers can optimize the decarbonization impact of their procurement decisions.

The Greenhouse Gas (GHG) Protocol serves as the de facto global GHG accounting standard that helps companies and other energy customers buying clean energy measure and manage their GHG emissions. The GHG Protocol—namely, its Corporate Standard—is central to corporate reporting because it specifies the available actions for companies to reduce their emissions and establishes consistent global practices for how companies can document these actions in GHG reporting. 

The GHG Protocol provides one of the four pillars of market infrastructure that underpin the voluntary carbon-free electricity (CFE) market system—along with 1) energy attribute certificates (EACs), 2) data for EACs and grid-supplied CFE, and 3) customer leadership programs. This market system drives investment in one billion EACs and billions of dollars of clean energy investments annually by companies seeking to achieve their CFE procurement goals. Table 1 below summarizes the role and relationship of market system stakeholders that oversee these four pillars:

Table 1: The Four Infrastructural Pillars of the Voluntary Carbon-Free Electricity (CFE) Market System

CFE Market System Infrastructure PillarMain Role in the CFE Market System
Customer leadership programs, including RE100, Science-Based Targets Initiative (SBTi), Green Power Partnership, UN 24/7 CFE Compact, and othersIncentivize energy customers to set goals aligned with the program’s criteria Create communities of customers with these shared goals to promote shared learning and community growthRecognize customer success and leadership in a consistent, measurable, comparable, and marketable way
Energy attribute certificates (EACs), including renewable energy certificates (RECs) in the US, guarantees of origin (GOs) in Europe, and international renewable energy certificates (I-RECs) in African, Asian, and Latin American marketsCreate a standard tradeable instrument that customers can buy that reflects ownership over the CFE attributes of a given megawatt-hour (MWh) of CFE generationProvide an additional revenue stream for companies’ CFE generation resource owners and investorsEnable customers to substantiate their CFE procurement claims
Data for EACs and grid-supplied CFE, including static data about a CFE resource location, type, capacity, etc. and dynamic electricity generation dataEnsure EACs capture verified fact-based, ex-post information for customers so they can substantiate their CFE procurement claimsEnable customers to assess their GHG emissions profile
GHG Protocol, namely the Corporate StandardEnable customers to assess their GHG footprint organization-wideReport on the relationship between CFE procurement and emission reductions associated with electricity use
A growing number of energy customers want to further optimize the decarbonization impact of their procurement decisions and meet their next generation procurement objectives in order to drive more CFE resource investments toward systemic grid decarbonization. 

To expand the CFE procurement menu available to customers, there are various needed updates to the voluntary CFE market system to deliver new market system infrastructure that activates next generation procurement solutions.

The Clean Energy Buyers Institute (CEBI) has been engaging with its diverse NextGen Activator community—including energy customers, solution providers, and market system stakeholders—to clarify how best to update the GHG Protocol in a way that both enables more companies to procure CFE and more companies to send new market signals through their procurement decisions to drive systemic grid decarbonization. In the latest NextGen Activator workshop, over 50 NextGen Activator participants assessed an initial set of proposed GHG Protocol updates and opportunities for near versus longer-term improvements. 

This workshop provided insights addressing two central questions: 

Question 1: What types of GHG Protocol updates would help clarify how to account for next generation CFE procurement?

Insight #1: The GHG Protocol should make targeted, incremental updates to help expand the menu of CFE procurement options for customers and activate next generation procurement. 

To help customers achieve their next generation procurement objectives, the GHG Protocol should make targeted updates to clarify existing guidance or provide new guidance on how they should account for their procurement of next generation solutions. For example, customers, the consultants and GHG accountants they hire to prepare annual GHG inventories need the GHG Protocol to recognize: 

  • Granular Certificates (GCs), which are EACs timestamped at an hourly or sub-hourly level (compared to the current monthly level timestamping standard) that follow EnergyTag’s GC Scheme Standard 
  • All CFE and complementary technologies with technology-neutral language and definitions (rather than only renewable energy resources)
  • The use of EACs to cover the electricity use associated with customer value chains (i.e., a market-based method for Scope 3 electricity emissions)

As a general principle, any CFE market system update, including those to GHG Protocol, should ensure that customers retain the ability to substantiate their CFE procurement with verifiable claims through robust energy EAC issuance and tracking systems that ensure no double-counting and establish the credibility of procurement claims. Table 2 below summarizes the current shortlist of updates to the GHG Protocol that would enable customers to understand how they can account for next generation procurement.

Table 2: GHG Protocol Updates Required to Enable Next Generation Procurement 

Top Customer-Identified Next Generation Procurement Objectives GHG Protocol Updates Required 
1. Procure any complementary or CFE resource  • Recognition of EACs inclusively from all CFE technologies  
• New guidance for accounting for energy storage (including from a variety of original resources), including recognition of GCs (i.e., hourly or sub-hourly timestamped EACs) 
2. Match energy consumption with CFE procurement on a 24/7 basis Recognition and clearer guidance for the use of GCs as well as granular load data and emission factors
3. Procure CFE at the most carbon-intensive times of day  Recognition and clearer guidance for the use of GCs as well as granular load data and emission factors
4. Procure CFE in the most carbon-intensive locations  Updated guidance around market boundaries
5. Procure CFE to cover electricity use across value chains  Develop market-based methods to allow use of EACs to apply to electricity-related emissions in Scope 3  
6. Apply over-procurement of CFE from certain regions to places without procurement options  Updated guidance around market boundaries
7. Motivate systemic grid decarbonization beyond the organization’s operations  Methodology to accurately account for combination of purchases and grid-supplied CFE
8. Deliver social and community benefits that promote further decarbonization of the grid  N/A

Question #2: Which GHG Protocol updates can be addressed in the near-term and which require more extensive investigation before the needed updates become clear? 

Insight #2: The GHG Protocol can help activate a subset of next generation procurement options in the near-term by adding technology inclusive language and clarifying the role of Granular Certificates (GCs) in the GHG Protocol’s Emission Factors (EF) hierarchy.  Longer-term, larger and complicated questions about how to treat concepts like avoided emissions will be important but there isn’t sufficient near-term consensus.

The various GHG Protocol updates that CEBI identified with its NextGen Activator community that would help activate next generation procurement vary in the complexity and additional investigation necessary to define related new guidance. As a result, the GHG Protocol can address some updates more quickly than others. 

It is important to incorporate these near-term updates into the GHG Protocol because, as it stands today, the absence of clear language and/or acknowledgement of these next generation components results in inconsistencies and/or reluctance to capture next generation procurement by customers and their third-party consultants and GHG accountants.

There are two specific updates the GHG Protocol can likely make swiftly:

  1. Technology-neutral guidance that provides clear acceptance of EACs from any CFE generation and complementary resource
  2. Recognition of GCs in line with EnergyTag’s GC Scheme Standard and clearer guidance for the use of GCs as well as granular load data and emission factors

These two updates are likely the easiest to implement because there is nothing that precludes companies from, respectively, procuring EACs from any CFE resource (pending their issuance from EAC issuing bodies) or accounting for CFE procurement on an hourly basis (pending the integration of GCs with EAC issuing bodies to avoid double-counting/double-claiming). However, the fact that the GHG Protocol does not provide technology-neutral language or specify the position of GCs in the EF hierarchy, leads to confusion, accounting inconsistencies, and undermines the availability and use of various next generation procurement solutions. 

Similarly, a third update that the GHG Protocol could likely also make swiftly is accepting and clarifying GHG accounting guidance on the use of EACs to cover the electricity-based emissions from upstream and downstream value chain partners. Table 3 below summarizes a set of eight updates to the GHG Protocol based on their relative complexity and resulting expected adoption timeframe that would help activate next generation procurement.

Table 3: List of GHG Protocol Updates Required and Overall Timeframe and Complexity

Timeframe and ComplexityGHG Protocol Updates
Nearest-term GHG Protocol update opportunities due to lowest complexity and investigation required• Technology inclusive guidance that provides clear acceptance of EACs from any CFE generation and complementary resource
• Recognition of GCs (i.e., timestamped EACs) and clearer guidance for the use and potential hierarchical treatment of GCs and more granular load data and emission factors
Medium-term GHG Protocol update opportunities due to medium complexity and investigation required• Acceptance and clarified accounting guidance on the use of EACs to cover the electricity-based emissions from upstream and downstream value chain partners
• Redefined guidance on accounting for energy storage, including for storage co-located with CFE resources versus storage storing electricity from the grid  
• Updated guidance around market boundaries and whether to allow for CFE over-procurement in dirtier grids or in certain regions to cover limited supply options in other regions
• Improved guidance to the Grid-Connected Electricity Projects substandard of the Project-Accounting Protocol, which would be one possible start at a standardized method for calculating avoided emissions
• Clear methodology to accurately account for combination of purchases and grid-supplied CFE
Longest-term GHG Protocol update opportunities due to higher complexity and investigation required• Clarity and specificity around the use of avoided emissions in GHG accounting, mainly due to the challenge of verifying and attributing avoided emissions

In the months ahead, CEBI will convene additional workshops in the NextGen Activator series to define solutions, implications, and implementation pathways for these identified GHG Protocol updates that will help activate next generation procurement and drive more targeted investments for systemic grid decarbonization. The next workshop in this NextGen Activator series will pivot the focus of discussion to another focus area of CEBI’s NextGen Initiative: accelerating data access to enrich EACs with new attributes. During this workshop on September 7, 2022, CEBI and participants will dive into the current ecosystem of data types and the barriers related to accessing the needed new data to introduce enriched EACs and activate next generation CFE procurement.

Engaging with Emerging Clean Energy Technologies

Climate innovation is gaining attention as an imperative piece of the net-zero equation. With more government funding allocated for clean energy research and development than ever before (thanks to the Bipartisan Infrastructure Law, CHIPS and Science Act, and the  Inflation Reduction Act), and private investment increasing substantially, carbon-free energy technologies are beginning to receive the attention, and dollars, they will need to create impact. As speed is one of the most critical variables in the climate change battle, expedient timelines to scale these technologies are crucial for success. This is where corporate buyers can play a pivotal role in the innovation ecosystem – by providing necessary capital, product validation, and demonstration opportunities for pre-commercial technologies. 

Beyond rapidly deploying existing technologies that are available today, there is a need to signal demand for the next generation of technologies that will close the gap in the “hard to decarbonize sectors” and generate long-term storage capacity. Deploying capital through investments or offtake agreements is the primary mode to influence market signals. Private capital from large energy buyers to complement public investment can carry clean energy solutions through fatal later-stage funding gaps.

While flexibility to provide financing may be a high barrier of entry to get involved in the cleantech ecosystem, it is not the only avenue to exert influence. Also salient is the feedback and validation large customers can provide to startups, ensuring that their efforts are strategically focused based on the needs of customers. Further, customers can step in to provide an environment to test new technologies and demonstrate proof of concept. Customers should consider what role they are positioned to play in accelerating the deployment of these imperative technologies. 

Accelerators, like Third Derivative, are working with innovators, investors, and offtakers to expedite the rate of climate innovation through a collaborative ecosystem approach. Their commitment to connecting a diversity of stakeholders and providing guidance and support, increases the likelihood of startup success and results in gigatons of carbon dioxide removal. Through working with an accelerator, corporations can engage with pre-screened startups that have been vetted for criteria like climate impact, scalability, feasibility, and additionality. Engaging with an accelerator can provide a viable inroad to leveraging emerging solutions and complimentary next generation carbon-free energy technologies to contribute to emissions reduction and reliability goals.

CEBA recently sat down with Third Derivative and Microsoft to discuss ways to effectively engage in the cleantech ecosystem. A few key insights included: 

  • Anyone can get involved. There are avenues to engage for all levels of commitment and means. Providing granular feedback and information to startups about what needs consumers foresee and how they will use their technologies can provide the certainty and transparency necessary to expedite product development.
  • Breaking silos in pursuit of collaborative efforts across the innovation pipeline, from entrepreneurs to offtakers, is the most effective way to create the biggest impact. Accelerators provide an inroad for buyers to access this diverse ecosystem.
  • We must incorporate environmental justice principles and consider impacted communities when deploying capital and solutions to ensure equitable and inclusive progress.

CEBA members can access our full conversation with Third Derivative and Microsoft on InterConnect here. If you are interested in learning more, please contact innovation@cebuyers.org.

Energy Attribute Certificate Issuing Bodies & Registries Need Clearance and Practical Tools to Expedite System Updates that Enable Next Generation Procurement

The Clean Energy Buyers Institute’s NextGen Activator workshop series is identifying the market system updates necessary to broaden the suite of carbon-free electricity procurement options so customers can optimize the decarbonization impact of their procurement decisions

There is an opportunity for energy attribute certificate (EAC) issuing bodies and registries to new important attributes on EACs applicable to next generation procurement solutions and better serve as a “platform of platforms” for diverse clean energy solution providers and data providers. EAC issuing bodies and registries can unleash a new era of carbon-free procurement and solution innovation by implementing two types of updates in their systems: capturing five key new attributes—including tags for all carbon-free electricity (CFE) resources, tags for complementary resources, (sub-)hourly timestamps, grid carbon intensity snapshots, and tags for social/community credentials—and offering modern automated programming interfaces (APIs).

The Clean Energy Buyers Institute (CEBI) has been engaging with EAC issuing bodies and registries to identify and understand various potential solutions to address the governance, data access, technical, and resourcing barriers they face to implement these updates. In the latest workshop in the NextGen Activator workshop series, EAC issuing bodies and registries examined each of these potential solutions. This workshop provided insights addressing two central questions: 

Question #1: How can EAC issuing bodies and registries make updates to their systems, such as capturing new EAC attributes and offering new technical functionalities like modern APIs?

Insight #1: The governance- and approvals-related process varies across EAC markets, where there are two sides of the coin to consider. Some EAC issuing bodies and registries have greater capacity and flexibility to implement changes faster, whereas others have greater capacity to implement updates in a more consistent, integrated way. 

Any EAC issuing body or registry that wants to update their system must follow established protocol and processes to get necessary internal approvals and resources. It is no surprise that across the 10 U.S. renewable energy certificate (REC) registries, 25 European guarantee of origin (GO) issuing bodies, and the 50+ countries in Africa, Asia, and Latin America that issue international renewable energy certificates (I-RECs) that these processes vary.

To a certain extent, EAC issuing bodies and registries that have greater autonomy and decision-making agility can more easily implement updates to activate next generation procurement. For example, I-REC and select U.S. REC markets have processes for approvals and updates that appear poised to move fastest with enabling next generation procurement, whereas these approvals and updates will likely take more time in European GO markets because extensive regulatory approvals apply at the European Union level by the European Commission in Brussels.  

Table 1 below summarizes the notable governance and implementation rollout differences between U.S. REC, European GO, and I-REC markets: 

Table 1: Summary of Governance and Implementation Factors for EAC Issuing Bodies to Implement System Updates

EAC IssuersGovernance StructureImplementation ScopeMain Impediment to Implementation 
U.S. REC registriesVaries across the 10 U.S. REC registries Varies across the 10 U.S. REC registriesInconsistencies across U.S. REC registries, where registries with greater autonomy and data access can move faster
European GO issuing bodiesThe European Commission (EC) in coordination with the Association of Issuing Bodies (AIB)Following approval, updates apply across all 25 GO issuing bodies’ systemsTime-intensive approvals process, but following approvals any update has consistent EU-wide adoption
I-REC issuing bodiesThe I-REC Standard Foundation in coordination with national I-REC issuers and other stakeholdersFollowing approval, any I-REC issuing body and Evident (the technology system for I-REC issuance and tracking) can choose to make updates following new guidance in the I-REC StandardWhile I-REC markets can theoretically adopt updates the fastest, there are limitations and country-by-country variations around granular data access for new EAC attributes

Let’s consider why I-REC and select U.S. REC markets may make updates fastest:

  • I-REC markets can likely integrate any combination of the five new EAC attributes into the I-REC Standard with the greatest relative ease compared to more complex and/or diverse governance processes in REC and GO markets since it is one body (I-REC Standard Foundation) that oversees this standard in operation in 50+ countries. Furthermore, the fact that all I-REC markets use one technical system—run by Evident—means that any new EAC attributes and technical functionality Evident offers can take wide geographic effect quickly. 
  • M-RETS, which issues and tracks RECs for most of the U.S. Midwest, can make decisions and implement updates more swiftly than other U.S. registries because it is structured as a nonprofit and does not have to go through same regulatory or stakeholder processes as other registries to make changes

However, the relative speed of the governance process might not make I-REC markets the first to adopt new EAC attributes. First, the data that EAC issuing bodies and registries need so they can add these five new attributes are more readily available in the U.S. and European markets compared to the countries that issue I-RECs. Upon adoption, newly available EAC attributes may be more consistently available in GO rather than I-REC or REC markets. This is because updates to European GO markets come from Brussels to promote European Union market integration and consistency.

Question #2: What else can support EAC issuing bodies and registries with accelerating the implementation of these updates to their systems?

Insight #2: Practical tools, such as template legal agreements that define API terms, can make it easier for EAC issuing bodies and registries to expedite updates once they have internal clearance to proceed.

There are opportunities that exist today to develop practical tools that will help expedite updates once issuing bodies and registries get the clearance they need to proceed with implementation. 

For example, workshop participants proposed a concept for a generic template legal agreement that sets the basic terms for how a given data provider, trading platform, and other solution providers can use a given EAC issuing body or registry’s APIs to interact with their system. EAC issuing bodies and registries can use and modify this template legal agreement to expedite the process and reduce administrative costs associated with enabling whitelisted data providers or trading platforms to, respectively, deliver new data or sync trading activity with EAC issuing body and registry systems. These template agreements would also help create greater consistency for data providers, trading platforms, and solution providers that offer services across EAC markets—helping to scale the adoption of innovative solutions. 

These insights are informing CEBI’s NextGen Activator Community Guide that CEBI will publish in mid/late September that specifies the ways to update the four pillars underpinning the current CFE market system—the EACs, underlying data, customer leadership programs, and greenhouse gas accounting guidelines—to activate new CFE procurement solutions that meet customers’ next generation procurement objectives. 

The next workshop CEBI is convening as part of the NextGen Activator series will pivot the focus of discussion to another pillar of CEBI’s NextGen Initiative: greenhouse gas accounting. During this workshop, CEBI and participants will review opportunities to clarify and gap-fill areas in the Greenhouse Gas Protocol’s Scope 2 Guidance to better support various next generation procurement scenarios. 

We hope you will join us on Monday, August 22nd at 2PM U.S. Eastern (register here).