GHG Accounting Updates Must Enable Customer Options to Accelerate Grid Decarbonization
The Clean Energy Buyers Alliance continues to be inspired by the ingenuity and passion of the energy customer community as they continually innovate for grid decarbonization.
Since 2008, when Walmart and SC Johnson became the earliest corporations to use their procurement power to buy utility-scale wind electricity through a Power Purchase Agreement, voluntary customers of clean energy have always pushed the envelope of creativity toward the goal of decarbonizing the U.S. power grid.
Today, voluntary purchases of carbon-free power account for more than a third of all new wind, solar, and storage capacity deployed since 2014 in the United States.
But companies want to do even more and have even more impact in their drive to decarbonize our power systems. Whether it is today’s announcement of an “emissions first” approach to procurement, or coming together to create the global Clean Energy Demand Initiative with the U.S. State Department at COP27, or last year’s launch of the 24/7 compact with the United Nations, these efforts and others demonstrate that companies continue to lead the way toward the Clean Energy Buyers Alliance’s vision of customer-driven, clean energy for all.
With the commencement of the WRI process to evolve the Greenhouse Gas Protocol Scope 2 accounting methodologies, now is a time of tremendous opportunity to continue to unleash the power of energy customers’ demand and optimize the impact of voluntary carbon-free electricity (CFE) procurement to accelerate systemic grid decarbonization.
During the past year, the Clean Energy Buyers Institute (CEBI) has convened and facilitated discussions with over 100 customers, solution providers, registries, and others to discover what customers want and need to optimize the impact of their voluntary procurement strategies. CEBI also explored ways to develop and activate solutions to the challenges customers face in CFE procurement, through our Next Generation Carbon-free Electricity Initiative.
The emissions first principles echo the types of updates that CEBI has identified we need for the voluntary market system to enable next generation procurement solutions. By implementing the market system updates detailed in CEBI’s Next Generation CFE Procurement Activation Guide and expanding the CFE procurement menu to include next generation solutions, energy customers can send more powerful, targeted market signals that drive investments and hasten the deployment of carbon-free electricity in the most carbon-intensive locations and times of day to help decarbonize the grid.
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,
A project in Indiana led by Bank of America enabled carbon emissions reduction of 95,000 metric tons annually and provided benefits to the local ecosystem through the use of pollinator-friendly habitat.
A 200 MW solar project to be built in Texas led by Procter and Gamble will support pollinators, such as butterflies and bees, as well as allow for sheep grazing which will be critical to the longer-term sustainability of the wider agricultural ecosystem.
Wells Fargo partnered with utilities to invest in a community solar project in Colorado that will serve commercial and residential customers, as well as low- to moderate-income service organizations in the greater Colorado area.
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:
Resilience: Enhance energy security and resilience along the supply chain to meet the needs of an economy rapidly undergoing electrification and an outdated power grid vulnerable to 21st century threats.
Equity: Integratediversity, equity, inclusion, and justice in the design, build, and delivery of all clean energy resources
Environmental sustainability: Minimize harm and maximize benefits for the environment and biodiversity.
Beyond the Megawatt has two simple but critical goals:
To develop procurement tools to help maximize the positive impacts of renewable energy, and
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.
Private Sector Energy Customer Companies Take Measurable Action to Decarbonize Industrial Commodities
The Clean Energy Buyers Institute illuminates energy customer company demand for low-carbon materials and resulting action to advance preferences in clean energy procurement processes
Washington, D.C. – (Oct. 20, 2022) – As companies continue to demonstrate critical leadership during the clean energy transition, demand has grown for strategies that optimize carbon impact along supply chains, including industrial emissions that are particularly difficult to reduce. The Clean Energy Buyers Institute’s (CEBI) Decarbonizing Industrial Supply Chain Energy (DISC-e) program, which was launched earlier this year, has engaged with more than 300 companies to accelerate the market for low-carbon industrial commodities illustrated in today’s White House announcement boosting clean American manufacturing.
From the products we use every day to buildings where we work and play to the critical components of a clean energy future, corporate leaders are taking actions to accelerate the market for low-carbon materials and manufacturing by using their purchasing power and voice.
“Industries must prioritize and lead the change to decarbonization,” said Mark Porter, vice president, Transmission Acceleration Group at the Clean Energy Buyers Institute (CEBI) and Clean Energy Buyers Association (CEBA). “Now is the time for energy customers to leverage market demand to establish low-carbon norms by engaging other industry leaders along the supply chain to truly optimize emissions.”
Industrial materials are the building blocks of modern life; leading companies are preferencing low-carbon inputs for their products.
General Motors will join the First Movers Coalition, the public-private partnership that intends to help commercialize zero-carbon technologies by harnessing purchasing power. General Motors joins the coalition as a member of the concrete sector, with an ambitious pledge to purchase at least 10% (by volume) near-zero concrete by 2030 and beyond.
Meanwhile, building materials are the largest source of industrial emissions; corporate leadership matters:
Starbucks commits to reduce carbon emissions in its direct operations and supply chain 50% by 2030, including advancing measurement and reductions in embodied and lifecycle carbon for its equipment and building materials. Through the Greener Stores program, it has launched an open-source educational series in the Starbucks Global Academy, created in partnership with Arizona State University, with actions that can be taken to support reductions in carbon, water and waste – including sourcing sustainable materials.
TK Elevator understands their responsibility to building owners, property managers and the riding public to create the safest and healthiest elevator systems possible. They have reduced scope 1 and 2 carbon emissions by nearly 15% in North America, and are moving aggressively toward a 100% renewable energy goal with a commitment to reduce greenhouse gas emissions from business activities by 53% by 2030 and are on track to achieve their zero-carbon future vision well ahead of their 2050 goal.
The clean energy future is being built now; companies are taking action to ensure it is even cleaner:
AVANGRID is part of the Iberdrola group, a leading global renewable energy company which has committed to specifying 100% net zero steel by 2050 with an interim commitment of 50% by 2030. Domestically, AVANGRID will work to support this commitment through future requests for proposals (RFPs) for equipment procurement and construction (EPC) and balance of plant (BOP) contractors for their next tranche of projects.
First Solar, an American solar technology company and the country’s largest manufacturer of photovoltaic (PV) solar panels, aims to reduce the carbon footprint of its ultra-low carbon solar panels by more than 65% by 2028 by going 100% renewable and engaging with key suppliers to minimize the embodied carbon of its solar panel components. The company’s products were the first PV panels in the Global Electronics Council’s (GEC) EPEAT registry for sustainable electronics, which will soon add an ultra-low carbon solar criterion to enable purchasers to identify solar panels with an ultra-low carbon footprint.
Lightsource bp’s U. S. team was awarded a 2022 EPEAT ecolabel purchaser’s award by GEC for their commitment to and leadership in sustainability and low carbon procurement. As part of their procurement process, they prioritize sourcing renewable energy equipment and products from domestic sources, with an emphasis on those suppliers who are committed to tracking, reporting and reducing their greenhouse gas (GHG) emissions.
The Industrials and Materials sectors are increasingly active in the Clean Energy Buyers Association’s State of the Market 2022, which looks at all corporate clean energy purchases. More than 42 U.S.-based companies joined the nearly 500 global companies in the sector that have committed to, or set, an approved science-based target through the Science-based Targets initiative (SBTi) demonstrating the prioritization of carbon-free energy as of April 2022.
About Clean Energy Buyers Institute The Clean Energy Buyers Institute (CEBI) is a 501c3 public charity that solves the toughest market and policy barriers to achieve a carbon-free energy system. CEBI’s aspiration is to achieve a 90% carbon-free U.S. electricity system by 2030 and a global community of customers driving clean energy. Visit cebi.org for more information.
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.
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 Pillar
Main 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 others
Incentivize 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 markets
Create 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 data
Ensure 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 Standard
Enable 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.
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
• 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
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:
Technology-neutral guidance that provides clear acceptance of EACs from any CFE generation and complementary resource
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 Complexity
GHG 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.
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
Main Impediment to Implementation
U.S. REC registries
Varies across the 10 U.S. REC registries
Varies across the 10 U.S. REC registries
Inconsistencies across U.S. REC registries, where registries with greater autonomy and data access can move faster
European GO issuing bodies
The European Commission (EC) in coordination with the Association of Issuing Bodies (AIB)
Following approval, updates apply across all 25 GO issuing bodies’ systems
Time-intensive approvals process, but following approvals any update has consistent EU-wide adoption
I-REC issuing bodies
The I-REC Standard Foundation in coordination with national I-REC issuers and other stakeholders
Following 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 Standard
While 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).
Leadership Programs Can Catalyze New Communities of Energy Customers to Drive Next Generation Procurement for Systemic Grid Decarbonization
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.
Leadership programs play a critical role in shaping the goals that energy customers set for their voluntary carbon-free electricity (CFE) procurement and cultivating communities of energy customers around these goals. The goals and resulting CFE procurement strategies these programs incentivize are important because they direct billions of dollars in voluntary procurement spending that send market signals for and resulting investments in specific types of CFE resource solutions to decarbonize the grid.
These programs—such as RE100, Science-Based Targets Initiative (SBTi), Green Power Partnership, UN 24/7 CFE Compact, and similar—establish the criteria that customers use to set their goals around CFE procurement, grid decarbonization, and emissions reductions. They also recognize the demonstrated leadership of customers that achieve the marks of success based on these criteria.
In the latest workshop in the NextGen Activator series on July 19th, CEBI convened representatives from various customer leadership programs as well as solution providers who work with numerous customers and inform customers’ participation in these programs. This workshop focused on understanding how and where leadership programs can play their role in enabling customers to set and achieve next generation procurement goals.
This workshop generated insights addressing the following three central questions:
Question #1: Based on the overall experience and industry uptake of existing leadership programs recognition programs, what are the drivers of program success?
Insight #1: Existing programs have catalyzed participation by making customer success straightforward, consistent, achievable, measurable, comparable and marketable.
Leadership programs must balance motivating customers to set and achieve ambitious goals that send important market signals for grid decarbonization while also ensuring that the customer “ask” is clear, actionable, feasible, and appealing. Otherwise, if the customer ask is too complex or costly in the near-term, the program risks low or no customer participation.
Existing programs have expanded their communities by creating a strong brand that industry recognizes and creating peer pressure for customers to lead and/or keep up with industry peers and competitors. They have created robust goal setting and reporting criteria and have defined programmatic governance with clear processes and protocols to make updates. Relatedly, existing programs also attempt to integrate applicable greenhouse gas accounting standards like the Greenhouse Gas Protocol into their criteria, which provides synergies across programs. Each leadership program drives CFE procurement but differs in the goals that define success.
Taken together, these factors help motivate customers to pursue CFE procurement strategies that fulfill the criteria of a given program or multiple programs.
Question #2: What are the gaps between existing leadership programs and customer-identified next generation procurement objectives?
Insight #2: Each of the eight next generation procurement objectives require updated or new programs to incentivize more customer action.
Leadership programs have an opportunity to make updates that create new communities of customers that set and achieve next generation procurement objectives. Without updated or new leadership programs, it is unlikely that a critical mass of customers will gain the internal approvals and resources necessary to implement the range of next generation procurement objectives that they would like to pursue to maximize decarbonization impact.
Table 1 below summarizes the overall opportunities to incorporate next generation procurement objectives into existing leadership programs and/or new programs. While there is some clarity around the opportunities for leadership programs to incentivize next generation procurement, what remains less clear is which existing programs are best suited to incorporate which, if any, of these next generation objectives. What also remains unclear is how and when to determine if a new program should be formed and who should lead with taking new programs forward.
Table 1: Opportunities for Updated or New Leadership Recognition Programs for Next Generation CFE Procurement
Next Generation Procurement Objective
Opportunities for Updated or New Leadership Programs
1. Procure any complementary or carbon-free electricity resource.
New or updated existing program that recognizes procurement that leverages complementary resources (e.g., CFE storage, efficiency energy, etc.) or makes use of any CFE (e.g., not only “renewable” resources)
2. Match energy consumption with carbon-free electricity procurement on a 24/7 basis.
Updates to existing program to recognize verified achievement of 24/7 matching in addition to initial 24/7 commitment
3. Procure carbon-free electricity at the most carbon-intensive times of day.
New or updated existing program that recognizes verified procurement based on CFE procured at times with the highest grid-carbon-intensity OR highest avoided emissions impact
4. Procure carbon-free electricity in the most carbon-intensive locations.
New or updated existing program that recognizes verified procurement based on CFE procured in locations with the highest grid-carbon-intensity OR highest avoided emissions impact
5. Procure carbon-free electricity to cover electricity use across value chains.
New or updated existing programs that permit and recognize EAC procurement to cover certain Scope 3 categories (i.e., the electricity use across a company’s value chain, both upstream and downstream)
6. Apply over-procurement of carbon-free electricity from certain regions to places without procurement options.
Updates to existing programs to broaden market boundaries and recognize the application of CFE over-procurement to compensate for CFE access limitations in different geographies
7. Motivate systemic grid decarbonization beyond the organization’s operations.
New program that establishes and recognizes engagement metrics, lobby dollar percentages, or similar toward climate and energy policy that decarbonizes the grid for all (i.e., beyond the company’s own operations)
8. Deliver social and community benefits that promote further decarbonization of the grid.
New or updated existing program that establishes and recognizes various social/community benefit credentials, certifications, etc.
Question #3: What are the enablers and considerations for making updates to existing leadership programs and/or forming new programs to motivate and recognize next generation customer leadership?
Insight #3: Any updated or new program will only progress and scale if that program attracts a critical mass of customers and if it establishes straightforward, consistent, achievable, measurable, and marketable success metrics.
For existing programs to make updates to support next generation procurement, a diverse, cross-industry group of customers (as well as solution providers and other stakeholders) should come together to request that a program makes certain specified updates, where they support these requests with evidence about the desirable impact of these updates along with potential performance indicators. These requests should leverage the existing technical group and advisory procedures for making program updates.
For new programs to form, it is important that any new program doesn’t compete with existing programs (to avoid market confusion) and establishes credible goal-setting criteria grounded in grid decarbonization impact. New programs will only scale if they make program success straightforward, consistent, achievable, measurable, and marketable for customers and if they reach a critical mass of diverse customers early to form a community.
These insights will inform the forthcoming NextGen Activator Community Guide that CEBI will publish in late September that maps the updates needed to the current voluntary CFE market system and the roles and implementation pathways among key market system stakeholders to activate next generation procurement. CEBI is holding two more workshops in August in the NextGen Activator series before publishing this Guide.
With Expanded and Accelerated Data Access, Energy Attribute Certificate Issuing Bodies Can Capture New Attributes Needed for 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.
Energy attribute certificate (EAC) issuing bodies and registries represent the intersection of all voluntary carbon-free electricity (CFE) markets. As clean energy customers set next generation objectives for CFE procurement and solution providers work to meet evolving energy customers’ needs, EAC issuing body and registry systems have a critical enabling role to play through the introduction of needed new attributes and technical functionalities. By empowering EAC issuing bodies and registries to implement these updates, we can open new channels for CFE procurement that enable customers to send more powerful and targeted market signals.
There are five new types of attributes that, once made available in EACs, will help activate a broader suite of CFE procurement solutions for customers. These five new attribute types—including tags for all CFE resources, tags for complementary resources, (sub-)hourly timestamps, grid carbon intensity snapshots, and tags for social/community credentials—require new data access for EAC issuing bodies and registries. Once these data are available, EAC issuing bodies and registries can introduce the needed new attributes and drive next generation procurement solutions forward.
This workshop generated insights addressing the following two central questions:
Question #1: What are the data types, sources, and quality for the five needed new attributes for EACs that will enable next generation procurement solutions?
Insight #1: The data are generally already available to activate each of the five needed new attributes, but the data sources are widely fragmented and are not yet readily accessible for EAC issuing bodies and registries.
EAC issuing bodies and registries neither create data nor certifications associated with CFE generation. Instead, they provide the technical platform and interfaces whereby trusted, whitelisted data providers deliver the needed static data about each CFE generation device (i.e., facility) and dynamic data about that device’s confirmed monthly CFE generation.
For each of the five new attributes that together will enable a suite of next generation CFE procurement options for customers, the underlying needed data sources and quality considerations vary. These variations are largely due to differences in market structures and resulting stakeholder arrangements across regional and geographic markets.
Table 1 below summarizes the key types of data, data sources, data access barriers, and other considerations that must be addressed in order to introduce the five needed new types of EAC attributes.
Table 1: Data Needs for New EAC Attributes to Enable Next Generation Procurement
New EAC Attributes
Needs for Implementation
Tags for all CFE resources Note: No major differences from existing CFE resources already receiving EACs
Verified megawatt-hour (MWh) generation data
Grid operators, utilities, and other whitelisted data sources that currently verify MWh generation by CFE resources
Creation of a new EAC type in certain markets since not all CFE is renewable
Tags for storage (and other complementary resources)
Timestamped recharge and discharge data, plus data about whether co-located with CFE resource or drawing from grid
Grid operators, utilities, and other whitelisted data sources with access to quality storage meter data
Define the use and applicability of EAC tags across different scenarios to consider the electricity sources recharging the storage device, the size of the storage device, etc.
Hourly (or sub-hourly) timestamp Note: No major differences from monthly timestamp data about MWh generation from CFE resources
More granular hourly (or sub-hourly) timestamped generation data compared to currently more typical data timestamped at the monthly level
Grid operators, utilities, and other whitelisted data sources that currently verify MWh generation by CFE resources
Introduce regulatory requirement for the delivery of hourly (or sub-hourly) timestamped data from data sources and potentially change the structure of an EAC so that it captures all MWh generation during an hourly or sub-hourly period (may need to reflect a unit less than the standard 1 MWh)
Grid carbon intensity snapshot Note on usage: To be used as a new CFE decision-making criterion (to enable customers to differentiate across EACs based on carbon to indicate where market signals are needed most), but NOT for carbon offset- or avoided emissions-related claims
An average grid carbon intensity factor (ideally, timestamped at an hourly or sub-hourly level) that reflects the carbon intensity of the grid based on the electricity mix at the time the MWh associated with an EAC was generated as well as potentially a marginal carbon emissions factor
Grid operators, due to their ownership of the data on the electricity resource mix that can determine the carbon intensity of a grid at a particular point in time
Specify a straightforward, sufficiently robust method to provide this grid carbon intensity factor on EACs
Social/community benefit credentials
Certification data that verifies if a CFE resource has certain social or community credentials
Third party certification body that verifies credentials of CFE resources and submits data to EAC issuing bodies and registries
Third parties must first define and create new certifications for various social and community benefit credentials that can be offered for use in EAC issuing body and registry systems
Question #2: How can EAC issuing bodies and registries accelerate access to needed data and the implementation of technical system updates?
Insight #2: There is a need to support EAC issuing bodies and registries with addressing governance, data access, and technical barriers so they can capture new EAC attributes and better serve as a platform of platforms in CFE markets.
Due to their mandate and market position, EAC issuing bodies and registries can and do make changes to their systems following requests from key stakeholders (i.e., electricity regulatory authority/agency, customers, and solution providers) along with accompanying implementation instructions or guidance. They are limited in their ability to make changes to their systems without such requests. For example, changes may require a regulatory agency like a public utility commission to compel the introduction of new EAC attributes by an issuing body or registry.
In addition, EAC issuing bodies and registries can only reflect attributes if there is agreement or standards on the data source, quality, and flows underlying these attributes. For example, it is not their role or responsibility to develop a new land siting, community ownership, labor union participation, or diversity/equity/inclusion (DEI) focused certifications or measure metrics of interest such as long-term jobs created by a CFE resource investment. Once there are third parties which oversee these certifications and can provide certification data, then it becomes possible for EAC issuing bodies and registries to ingest these data for new attributes tied to static data about CFE resources that can be included on EACs.
Table 2 below details the types of implementation barriers that create challenges for EAC issuing bodies and registries to introduce new EAC attributes and technical functionalities (e.g., enhanced automated programming interfaces, known as APIs).
Table 2: Barriers and Potential Solutions to Accelerating Updates Needed to EAC Issuing Body and Registry Systems to Enable Next Generation Procurement
EAC issuing bodies and registries typically can only make changes, including new attributes, to their systems following requests and approvals from the regulatory authority/agency in their respective market.
Regulatory authorities/agencies can request and approve adoption of new EAC attributes, which may require diverse stakeholders, including end-use customers, solution providers, and others, to first compel these authorities/agencies about the need for these new attributes.
EAC issuing bodies and registries offer interfaces for trusted, whitelisted data providers to input needed data for EAC issuance, but these data providers are not yet providing (or possibly willing and/or able to provide) the data necessary for new EAC attributes.
Regulatory authorities/agencies can compel data providers, such as grid operators and utilities, to deliver already available and needed data to EAC issuing bodies and registries to enable new EAC attributes.
EAC issuing bodies and registries will have to create new data fields and processes in their technical systems to enable users to make use of new EAC attributes. They will also have to develop new APIs to enable data providers to deliver data more seamlessly into their systems and enable solution providers to build integrated platforms more easily on top of their systems.
EAC issuing bodies and registries can develop user requirements and development backlogs to define the needed new functionality, new resource requirements, timelines, etc. for this implementation.
EAC issuing bodies and registries may need to secure additional technical staff and budget resources before they can implement, test, and roll out the technical changes to their systems.
EAC issuing bodies and registries can identify and request additional staff and budget resource needs.
Given the common challenges that EAC issuing bodies and registries face, it appears that updates may move ahead faster through swifter stakeholder action as well as new “accelerator programs” that provide technical toolkits and guidance for implementation.
EAC issuing bodies and registries will reconvene in early August for another workshop to further detail these and other potential solutions to accelerate needed updates to their systems. The insights that CEBI is gathering from this workshop and all NextGen Activator workshops will inform robust public CEBI NextGen Activator community guidance (to be published in late September) that details the market updates needed and outlines the proposed roles and responsibilities of different market stakeholders to enable next generation procurement solutions.
With Enhanced Energy Attribute Certificates, Energy Customers Can Use Their Voluntary Procurement to Send More Powerful and Targeted Market Signals for Systemic Grid Decarbonization
We need to evolve and expand—rather than diminish—the market-based tools customers have at their disposal to drive systemic grid decarbonization and substantiate their carbon-free electricity procurement.
Corporate voluntary carbon-free electricity (CFE) procurement is a proven lever for accelerating grid decarbonization. Case in point, customers drove over one-third of all new CFE capacity additions in the United States since 2014 by signing contracts for 52 gigawatts (GW) of new CFE capacity. Just like any other voluntary energy procurement market scenario, these corporate energy customers received and used energy attribute certificates (EACs)1 to substantiate their CFE procurement. This CFE procurement also sends important market signals by increasing CFE supplier revenues through the resulting EAC sales to customers.
EACs, along with market-based accounting, fundamentally enable and incentivize energy customers to achieve their CFE procurement goals. The resulting collective voluntary CFE procurement power from a substantial and fast-growing community of clean energy customers drives investments in CFE resources that complement policymakers in advancing electric grid decarbonization.
Simply put, EACs represent the completed purchase of verified CFE generation. Underpinned by validated electric grid operator data, EACs convey the property title (or receipt) that energy customers receive along with standardized information (e.g., the EAC issuance date along with the type, location, capacity, etc. of the CFE resource that produced that EAC) about the CFE option they elected to buy to make progress toward their voluntary CFE and sustainability goals. Said another way, customers need EACs in their books to validate any of their CFE procurement claims.
EACs also facilitate the scaling of much-needed financing for grid decarbonization. Any time customers buy CFE—meaning they buy EACs, whether bundled or unbundled with an electricity product—they create a revenue stream and send market signals that make CFE investments more financially attractive among investors. EAC-generated revenue enhances the bankability of CFE projects and investment potential of developers that own and/or operate CFE resources. In other words, EACs provide an additional revenue stream to help attract more CFE investments. Their value can also help fill the bankability gap in countries that are phasing out subsidies or feed-in tariff schemes for new CFE capacity.
Despite the critical role of voluntary CFE markets and the instruments that make them possible, there is an emerging tension in discussions underway about the impact of voluntary markets and EACs. On one hand, publications like this June 2022 Nature paper can—despite presenting some valid observations about the need to enable and motivate customers to send more targeted market signals that advance systemic grid decarbonization through their CFE procurement—present misleading (and sometimes inaccurate) headlines and recommendations (e.g., some going as far as arguing that EACs should be discredited) as a result of misunderstanding how EACs enable market transactions. On the other hand, there is recognition across the clean energy industry that EACs must include more attributes to enable differentiated next generation procurement solutions so customers can better optimize the grid decarbonization impact of their CFE procurement. Either way, EACs underpin all voluntary market transactions. We need to continue to empower customers to engage in these markets to accelerate grid decarbonization, but we also need EACs that carry more specific attributes so that customers can drive deeper and differentiated grid decarbonization impact through their CFE procurement.
To support discussions underway about the role of energy customers in grid decarbonization, the following Q&A overview in Table 1 summarizes the critical role of EACs to support voluntary CFE markets, how EACs substantiate customers’ claims, and new attributes that EACs should include to activate next generation CFE procurement solutions.
Table 1: Q&A about how energy attribute certificates (EACs) create markets, business value, and verifiable claims for carbon-fee electricity procurement and ways to enhance EACs so energy customers can send more powerful, targeted market signals
What is an energy attribute certificate (EAC)?
An EAC is an accounting instrument representing one megawatt-hour (MWh) of electricity generated by a CFE resource that conveys a property right over the environmental attributes of that MWh, such as a zero or near-zero emissions factor depending on the CFE resource. Once the purchased EAC reaches the end consumer (or beneficiary), the EAC is retired (or cancelled) in the EAC registry/issuing body system so it cannot be double counted or double claimed.
Are there different types of EACs?
Yes, there are different types of EACs and associated standards across different markets. For example, the most common EACs in electricity markets are renewable energy certificates (RECs) in the United States., guarantees of origin (GOs) in the European Union, and international RECs (I-RECs) in 50+ countries across Africa, Asia, and Latin America.
Who issues and tracks EACs?
Countries typically have one entity—called an issuing body or registry—that issues EACs to CFE resources based on verified monthly MWh production data from electric grid operators. The United States has over ten registries based on its legacy grid design.
How do energy customers buy carbon-free electricity (CFE) and what role do EACs play?
Energy customers procure CFE through diverse product offerings and solution providers then deliver customers EACs as evidence customers use to substantiate their CFE procurement. Solution providers deliver customers EACs through various types of unbundled or bundled EAC products—such as unbundled EACs, virtual power purchase agreements, physical power purchase agreements—so that customers can verify their claims.
Why do customers buy CFE?
Customers buy CFE on a voluntary basis to make progress toward any goals they set around clean energy sourcing, greenhouse gas emission reductions, and/or broader sustainability.
What is the business value of EACs for CFE resource investments?
EAC sales generate revenues for EAC suppliers and create a revenue stream for CFE resource owners/operators. These revenues can be used to expand their CFE business, make and attract investments in new CFE resources, etc. The value of the EAC follows supply/demand dynamics: as demand for a particular type of CFE in a given market rises, the price of the EAC in that market increases—increasing revenues that then help attract more investments to meet demand.
What is the value of EACs for CFE procurement-related claims and audits?
EACs represent fact-based, ex-post information that underpins all legitimate CFE procurement-related claims. EACs are the standard instrument that customers use to verify CFE procurement credentials. Without holding an EAC, there is no standardized way to verify CFE procurement credentials or related claims.
How do customers use EACs in carbon accounting?
Customers typically use EACs to reduce their emissions from their electricity use (“Scope 2” emissions). Some customers are also starting to apply EACs to reduce emissions from electricity use across their value chains (“Scope 3”). Customers typically report EACs through the market-based accounting method outlined in the Greenhouse Gas Protocol’s Corporate Standard to reflect how the EACs they bought give them the property right over the zero or near-zero emission attributes over MWh in the grid. As a result, customers that achieve 100 percent CFE and have the EACs to prove it can report they have zero Scope 2 emissions. Over time, as the grid mix changes due to CFE capacity additions that replace emitting resources, this reduces the emissions reported through the location-based accounting method under the Corporate Standard. In other words, market-based accounting is the way most customers can take action and document progress toward their own emission reduction goals, whereas location-based accounting provides a pulse check around progress in decarbonizing the grid as a whole, yet does not provide avenues beyond policy change for a customer to change the emissions profile of the grid mix they use.
Can voluntary markets function (i.e., can customers buy CFE) without EACs?
No: There are no straightforward, standardized, transparent options that provide an alternative to EACs either for customers to procure CFE and verify CFE procurement-related claims without EACs or to create EAC-like revenue streams that help increase investments. Without EACs, we would not have seen the tremendous growth in customer driven CFE deployment.
Can customers decarbonize their electricity use without the use of EACs in voluntary markets?
Yes and no: Without the use of EACs in voluntary markets and the ability to make decisions about the type of resource they procure, customers can only rely on lobbying governments, regulators, and utilities to get lower-carbon generation. However, relying solely on slow-moving policy change and implementation greatly diminishes the chances of decarbonizing the electricity system to 90 percent by 2030. Voluntary markets allow energy customers to drive decarbonization faster by making decisions that send important market signals today, while also working with governments, regulators, and utilities to increase CFE generation. In addition, an evolution in existing EAC systems whereby EACs capture more attributes will enable customers to send more targeted market signals for systemic grid decarbonization.
How can we direct voluntary markets to support (i.e., send market signals) for systemic grid decarbonization through next generation procurement?
There are five main new types of attributes—1) tags, or new EAC types, for all CFE resources, 2) tags for storage resources, 3) granular (hourly or sub-hourly) timestamps, 4) a snapshot of grid carbon intensity, and 5) social/community credentials—that EAC issuing bodies and registries can add to EACs to broaden the suite of CFE procurement options and enable customers to send stronger market signals for CFE resource investments advancing systemic grid decarbonization. By capturing these attributes in EACs, EAC issuing bodies and registries will enable solution providers to offer next generation solutions that empower customers to send more targeted market signals for systemic decarbonization through CFE procurement.
How does CFE procurement fit within customers’ overall decarbonization strategies?
Customers typically first implement energy performance measures across their operations to reduce their energy use and associated emissions. Then, they will procure CFE: when and where possible, a customer may be able to enroll in a CFE utility program or change their electricity supplier, where they will still need an EAC (or similar documentation) to substantiate their claims. In most cases, customers will engage in voluntary markets by procuring CFE and receiving EACs—typically starting with unbundled EAC products before moving toward more complex and/or risky bundled products—to cover their more energy-efficient operations with verified CFE, which conveys zero or near-zero emissions factor for each MWh covered by an EAC. In addition, customers can engage with policymakers, regulators, and utilities to advance more ambitious decarbonization goals for the grid.
In support of the NextGen Initiative, the Clean Energy Buyers Institute (CEBI) is launching a new research endeavor to clarify and better communicate the central role of EACs in voluntary CFE markets for current and next generation procurement. This research will result in the delivery of straightforward, audience-specific educational content that informs diverse stakeholders about the central role of EACs for voluntary CFE markets. This research will also inform broader guidance CEBI is developing for the NextGen Initiative about the updates needed to the current voluntary CFE procurement market system—from new attributes, and underlying data, for EACs to new customer leadership recognition programs and greenhouse gas accounting frameworks—to activate a broader suite of CFE procurement options for customers to play their proven important role in advancing systemic grid decarbonization.
Energy Attribute Certificate Issuing Bodies Can Unleash Next Generation Procurement by Capturing More Attributes & Better Serving as a “Platform of Platforms”
The Clean Energy Buyers Institute’s NextGen Activator Workshop series is identifying energy market gaps and changes necessary to help energy customers advance toward and increase the decarbonization impact of their clean energy procurement decisions.
Energy attribute certificate (EAC) issuing bodies and registries are critical stakeholders in the voluntary carbon-free electricity (CFE) market. By updating their centralized database systems to capture more attributes in EACs and allow solution providers to seamlessly synchronize with these systems, EAC issuing bodies and registries will play a central role in enabling the introduction of more CFE procurement options in the market and supporting more actions that lead to grid decarbonization.
Representatives from EAC issuing bodies, registries, and standards bodies that oversee voluntary CFE markets across the globe convened on June 16th for the fourth workshop in the Clean Energy Buyers Institute (CEBI)’s NextGen Activator series to define the specific new attributes, underlying data, and implementation actions needed to introduce CFE procurement options that meet customer-identified next generation procurement objectives.
This workshop generated insights addressing the following three questions:
Question #1: What is the role of EAC issuing bodies and registries in existing and next generation CFE markets?
Insight #1: EAC issuing bodies and registries serve as a linchpin of voluntary CFE markets and can become a “platform of platforms” to better support customer and solution provider needs by updating existing systems.
Customers rely on EACs to assert ownership claims over each megawatt-hour of CFE they procure for auditing, reporting, and marketing purposes. Because EACs possess financial value, customers’ voluntary procurement of EACs (both bundled and unbundled with electricity sales) creates an additional revenue stream for CFE resource owners and sends market signals that help attract greater investments in grid decarbonization.
EAC issuing bodies and registries promote CFE procurement integrity and validation by issuing, tracking, and canceling EACs, which each represent a unique standardized tradeable instrument representing one megawatt-hour of verified CFE generation. They collate the critical details reflected in EACs and track EAC lifecycles to support evidence based CFE procurement.
EAC issuing bodies and registries have the potential to unlock CFE solution innovations that aim to better serve customer needs and decarbonization impact-related goals. Table 1 below summarizes the current functions, limitations, and evolution opportunities of EAC registries and issuing bodies.
Question #2: How should EAC issuing bodies and registries capture new attributes in EACs and gather the underlying data?
Insight #2: EAC issuing bodies and registries should offer new attribute fields in their systems for all CFE resources, storage-related tagging, granular timestamps, grid carbon intensity snapshot, and social/community credentials.
Table 2 below summarizes the five new attributes and associated data requirements to update EACs so that they fulfill the needs of next generation procurement solutions. With these updated EACs, customers can then send clearer market signals and increase demand for solutions that promote systemic grid decarbonization.
Question #3: What are the barriers EAC issuing bodies and registries face to add these new attributes and what are ways to accelerate implementation?
Insight #3: EAC issuing bodies and registries track the information they are supposed to track and diverse stakeholders—from energy customers and solution providers to policymakers and regulators—can support EAC issuing bodies and registries in driving updates to these systems.
Depending on the market, EAC issuing bodies and registries have varying data access, capacity, and governance-related flexibility to make decisions independently about capturing new attributes or making technical system updates.
Stakeholders can and should make detailed requests to EAC issuing bodies and registries about which new attributes should be captured, where to collect the underlying supportive data for these new attributes, and what other new technical functionality is needed. In other words, if stakeholders make these types of requests, this will trigger processes to proceed with making these updates. Stakeholder action, particularly by policymakers and regulators, can also help ensure EAC issuing bodies and registries gain needed access to quality data from grid operators and any other key data sources.
Coming up in the NextGen Activator series, CEBI will hold two workshops focused on defining ways to gather needed data and implementation pathways for EAC issuing bodies and registries to ingest these data to capture new attributes in the EACs they issue. CEBI will hold additional NextGen Activator workshops focused on needs, opportunities, and implementation pathways to update customer leadership programs and greenhouse gas accounting frameworks to, respectively, help incentivize and better capture the decarbonization impacts of next generation procurement.
The insights that CEBI gathers from all NextGen Activator workshops will inform robust CEBI NextGen guidance (to be published in late September) that clarifies how to assemble all the puzzle pieces to enable next generation procurement solutions.
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