Tag: CEBI

By Kerri Metz and Doug Miller

Energy customers rely on regulatory guidance from the U.S. Federal Trade Commission (FTC) to inform how to advertise their clean energy claims. The FTC’s Guides for the Use of Environmental Marketing Claims (Green Guides) provide environmental marketing recommendations aimed at shielding consumers from potentially deceptive claims, and the FTC has begun a process to update the guidelines, which have not been revised since 2012. 

With the growing clean energy market, the greater diversity of carbon-free electricity (CFE) procurement solutions available to energy customers, and increasing consumer interest in purchasing environmentally friendly products, the FTC this past December announced it was seeking public comment on various issues related to environmental marketing claims. The FTC sought feedback on topics including carbon offsets, renewable energy procurement, recycled content, and compostable materials. The agency accepted comments through April 24. 

The Clean Energy Buyers Institute’s (CEBI’s) Next Generation Carbon-free Electricity Initiative began work with more than 35 stakeholders in early 2023 to develop Green Guides recommendations that would both help energy customers understand how they can advertise their next generation procurement strategies and provide additional protections and clarity for American consumers. Through these stakeholder discussions, CEBI developed three guiding principles and three recommendations on ways to enhance the Green Guides. 

The three guiding principles shaped the recommendations that CEBI submitted to the FTC:

• Principle #1: The FTC Green Guides updates should help clarify how energy customers can advertise and substantiate their CFE procurement.
• Principle #2: The FTC updates should create the opportunity for energy customers to make more types of verifiable marketing claims based on their respective CFE procurement strategy and provide new examples illustrating how to make these claims for a broader range of CFE procurement strategies. 
• Principle #3: The updates should use plain language to avoid creating confusion among consumers and energy customers, refrain from unduly limiting or narrowing the menu of CFE procurement options available to energy customers, and prioritize updates that enable the maximum number of energy customers to participate in CFE procurement markets. 

These three principles serve as the foundation for the recommendations that CEBI submitted to the FTC to inform the Green Guides updates:

Recommendation #1: Broaden current Green Guides language from renewable energy to carbon-free electricity. 

The FTC should broaden its existing language around renewable energy claims to include technology-neutral CFE and all CFE-related marketing claims. Given the increased interest and investment in diverse CFE resources since the previous Green Guides revision, the guidelines should acknowledge the present greater diversity of CFE procurement options, clarify how marketers can make accurate marketing claims about their CFE procurement, and advise marketers on how to avoid making unqualified or misleading CFE claims. 

Recommendation #2: Maintain a requirement for marketers to substantiate CFE claims with energy attribute certificates (EACs) and additional disclosures. 

The FTC should continue to require that marketers use customers’ EACs and, where needed to validate differentiated claims, additional disclosures to substantiate CFE procurement claims. This guidance is especially important as new CFE procurement solutions become available to energy customers. The FTC should continue to clarify that energy customers must own EACs that align with any CFE-related marketing claims, including differentiated claims. In cases where EACs do not yet contain sufficient attributes that could be used in making specific CFE marketing claims, energy customers should have high-quality, detailed data — in addition to the EACs they own — to substantiate these differentiated claims.

Recommendation #3: Differentiate between EACs and carbon offsets in marketing claims. 

The Green Guides should include new language that provides clarification between the purpose and role of EACs versus carbon offsets in clean energy marketing claims. The FTC should clarify that marketing claims made around an energy customer’s CFE procurement and associated emission reductions in that energy customer’s respective greenhouse gas inventory must be verified through the customer’s completed CFE procurement and ownership of EACs that align with any marketing claims.

The marked increase in the number of individual consumers using their purchasing power to buy products from businesses that can prove they are adopting sustainable practices creates a need for clearer guidance on the wider-ranging types of claims consumers are now seeing. As more types of CFE procurement solutions become available and energy customers pursue these diverse solutions, guidance is also needed about how customers can communicate the differentiated decarbonization impact of their procurement strategies. Between 2012 and 2020, customers’ global voluntary procurement increased from about 300 million megawatt hours (MWh) of CFE to over 1 billion MWh of CFE, and this CFE market growth trend has only intensified since 2020.

The FTC Green Guides clarify how energy customers communicate their leadership in taking voluntary action to accelerate investments in electric grid decarbonization. CEBI’s recommendations for improvements to the FTC Green Guides serve as an example of our broader work to improve customer leadership programs, one of four interdependent market evolutions that CEBI is advancing through the Next Generation CFE Initiative. To learn more about CEBI’s research on the four market evolutions needed to broaden the menu of CFE procurement options and enable customers to optimize their procurement strategy for grid decarbonization impact, check out the Next Generation CFE Procurement Activation Guide.

CEBI presented its FTC Green Guides revisions principles and recommendations in a public webinar on March 29 and submitted them formally before the April 24 deadline. To get involved in CEBI’s NextGen Activator community or learn more about CEBI’s recommendations for the FTC Green Guides, please contact Doug Miller at dmiller@cebuyers.org.

Energy customers and providers have a powerful role to play in advancing an equitable and just transition by leveraging the large scale of their clean energy procurement and market influence to advance co-benefits for historically marginalized communities. While concerns still exist about the perceived lack of feasibility and prohibitive cost premiums associated with advancing equity, access to tools, financial incentives, and lessons learned from market leaders illustrate that an equitable clean energy future is more feasible than ever.

Over two years ago, the Clean Energy Buyers Institute (CEBI) began its journey to embed diversity, equity, inclusion, and justice (DEIJ) across its programming and engagement through a partnership with Groundswell, a community-centered non-profit advancing equitable clean energy initiatives. Initial outcomes included a listening tour co-led by Groundswell, The Solutions Project, and Hummingbird that convened  corporates and communities to highlight the potential shared benefits from respecting and centering the values and lived experience of communities, and was followed by a Corporate and Community Engagement Primer providing guidance for meaningful community engagement. The Beyond the Megawatt initiative was launched shortly after and is building on this work by convening a growing group of diverse stakeholders to create tools and resources to build awareness and momentum for action on DEIJ. 

Here are some of our key findings:

Increased access to new data tools 

There’s an emergence of data tools that can help energy customers and providers identify communities historically impacted by environmental injustice and poised to benefit most from an equitable and just transition. For instance, the White House Climate and Economic Justice Screening Tool helps identify disadvantaged communities that have been underserved and overburdened. 

The Energy Equity Project (EEP) provides a framework for measuring equitable outcomes beyond job creation and air quality improvements, such as evaluating  Pursuing clean energy co-benefits that support healthy homes, community resilience, and alleviating financial stress from disproportionate energy burden and low-quality jobs can all lead to public health improvements in historically marginalized communities. 

BTM is creating a due diligence framework, including procurement guidance to facilitate accessibility and application of these tools and establish a clear framework for what data needs to be collected and evaluated to integrate equity in procurement processes. 

It’s good for business 

Embedding equity and justice in clean energy procurement isn’t just the right thing to do, it can also maximize access to economic incentives. The Inflation Reduction Act provides additional tax benefits for solar and wind projects developed in low-income, tribal, and environmental justice communities. There’s never been a better time to think about impactful siting of projects. 

Early and inclusive public engagement is essential to achieving a social license to operate in these communities. While deep engagement may appear more costly and time-consuming up-front it can help address costs from potential project delays and opposition in the long run.

Creating and supporting high-road jobs—those that promote practices like prevailing wage standards and equitable workforce development— can have significant quality-of-life impacts on workers and their families, while having a marginal cost increase on utility-scale clean energy development. A Princeton University study found that a 20% increase in installation and construction labor costs from improved standards would only increase the installed cost of solar PV and wind projects by 3% and 1%, respectively. 

More thoughtful clean energy procurement enhances your brand and strengthens your stakeholder relationships. A 2017 Cone Communications CSR study found that 87% of surveyed consumers make purchasing decisions based on values, 76% will boycott based on values, and 88% are more loyal to a company when it supports a social or environmental issue.

It’s already being done

The days of theoretical scenarios are over. This work is already being done by several market leaders.

• Microsoft and Volt Energy Utility, a Black-led solar energy development firm, partnered to advance a groundbreaking Environmental Justice Power Purchase Agreement (EJPPA). A portion of the project’s revenue will be invested in community initiatives and equitable workforce development.
• Sol Systems and Google have announced a first-of-its-kind tax equity investment that will provide capital investments to organizations serving communities of color and historically under-resourced communities to reduce energy burden and promote healthy homes through weatherization and home repair services.
• Equity and justice can also be advanced through Renewable Energy Credits (RECs). Salesforce partnered with Powertrust to purchase 280,000MWh of Distributed Renewable Energy Certificates (D-RECs) that increase clean energy access in emerging markets that have been traditionally excluded from corporate procurement. 

You can be a leader too

A decarbonized grid for all means we can’t leave any communities behind. At BTM, we want to ensure that corporate energy customers and providers have the tools and information necessary to advance an equitable and just transition. Are you ready to join us? Learn more here

Want to join the amazing group of energy customers and providers helping to lead the way? Email Phoebe Romero at promero@cebuyers.org to join our equity working group or find other ways to get involved.

By Hanna Ye and Doug Miller

To meet organizational goals, emerging regulations, and stakeholder demands, energy customers are beginning to assess solutions to reduce greenhouse gas emissions across their value chains. These Scope 3 emissions originate from upstream and downstream sources and on average represent 75% of an organization’s total emissions.

At the beginning of 2022, energy customers identified the ability to procure carbon-free electricity (CFE) on behalf of value chain partners as one of their top objectives for next generation energy procurement. During workshops convened last year by the Clean Energy Buyers Institute (CEBI) as part of its NextGen Initiative Activator series, customers, solution providers, and market system stakeholders aligned around the opportunity to scale voluntary CFE demand and hasten grid decarbonization investments by empowering energy customers to procure CFE, covering the subset of their Scope 3 emissions originating from their value chain partners’ electricity use. The U.S. Environmental Protection Agency (EPA) last year also issued guidance detailing how customers may procure CFE on behalf of value chain partners and allocate energy attribute certificates (EACs) to them.

These discussions elevated practical challenges hindering broader adoption. At the top of the list: How can energy customers determine the volume of CFE to procure on behalf of their respective value chain partners, given limited access to quality data? CEBI conducted numerous interviews in late 2022 with large commercial and industrial energy customers from diverse industries to investigate this challenge and identify potential solutions. 

Three key themes emerged about the real-world challenges that customers face in reducing emissions from their value chain partners: 

1. Value chains’ complexity: Energy customers often have different value chain partners; these partners range from large resource-strapped manufacturers and dispersed small- and medium-size enterprise suppliers to diverse downstream partners that vary based on a customer’s product or service. Customers also likely have different contractual arrangements with different value chain partners that often vary across geographies.
2. Limited data access: Customers have limited access to quality data about their value chain partners’ respective electricity use and emissions. In the absence of quality data, customers seeking to better understand their Scope 3 emissions associated with value chain partners must estimate partners’ respective electricity use and emissions.
3. Resource constraints to develop and implement a CFE procurement strategy: Upstream suppliers and downstream users across an energy customer’s value chain have limited internal resources, capacities, skillsets, and practical options to develop and implement a CFE procurement strategy. 

CEBI asked customers about currently available methods and stakeholder concerns around procuring CFE on behalf of value chain partners given these challenges, particularly about limited quality data access. Based on those conversations, CEBI identified potential solutions to address value chain data access and accounting challenges and promote CFE procurement on behalf of value chain partners:

• Short-term: Energy customers could use best-effort estimation methods to evaluate their upstream and downstream value chain partners’ electricity usage and related emissions. Customers then could procure CFE on behalf of value chain partners and decide how to allocate ownership over the energy attribute certificates (EACs) across value chain partners.
  
• Medium-term: Energy customers could rely on self-reported figures from a selection of value chain partners and use best-effort estimation methods for those that do not report directly. Some value chain partners procure CFE themselves and report evidence. For other non-reporting value chain partners, customers procure CFE on behalf of their partners and decide how to allocate ownership over the EACs among their partners.
  
• Long-term: All value chain partners could report their electricity use and associated emissions to energy customers, and a growing group of value chain partners could procure CFE themselves and deliver this evidence. For other non-reporting value chain partners, customers could procure CFE on behalf of their partners and decide how to allocate ownership of the EACs among their partners.

Wider market evolutions would also empower customers to procure CFE on behalf of value chain partners’ respective electricity use. CEBI explained those evolutions in its Next Generation CFE Procurement Activation Guide. 

For example, the Greenhouse Gas Protocol, currently undergoing an updates process, could make changes to clarify acceptance of reducing Scope 3 electricity-based emissions by procuring CFE on behalf of and assigning the associated EACs to customers’ value chain partners. This clarification in greenhouse gas accounting, which is one of four recommendations that CEBI is submitting to the Greenhouse Gas Protocol for this updates process, would enable more customers to address their Scope 3 electricity-based emissions and create significant growth in voluntary CFE procurement. 

CEBI’s NextGen CFE Initiative this year is focused on solving barriers to activating the market evolutions specified in our guide. This means finding opportunities to enrich EACs with more attributes, increase access to consistent and more granular data, update the Greenhouse Gas Protocol, and enhance customer leadership programs. Each of those endeavors will help create an evolved voluntary market system where customers have increased options to advance systemic grid decarbonization.

By Priya Barua and Doug Miller

The Greenhouse Gas Protocol—the preeminent global framework for greenhouse gas inventory accounting—is under revision. The protocol’s Scope 2 and 3 standards have not been updated in eight and 12 years, respectively, and clean energy markets have evolved significantly in that time. World Resources Institute (WRI), which oversees the protocol with World Business Council for Sustainable Development (WBCSD), late last year began a revisions process for updating the Scope 2 and 3 standards. CEBI has worked in recent months to develop key recommendations for the update.

WRI in December began seeking comments through stakeholder surveys to evaluate needs and opportunities for updating and improving its guidance for Scope 2 and Scope 3 emissions accounting, and those comments are due by March 14. In anticipation of this revision, the Clean Energy Buyers Institute (CEBI) initiated a stakeholder process in late 2021 that included participation from more than 100 energy customers, solution providers, and key voluntary market stakeholders from the NextGen Activator community. 

CEBI’s extensive stakeholder engagement process resulted in three community-developed guiding principles and four recommendations on ways to enhance the Greenhouse Gas Protocol. The following three guiding principles underpin the recommendations that CEBI then developed with the NextGen Activator community:

• Principle #1: Greenhouse Gas Protocol updates should help expand carbon-free electricity (CFE) procurement options for energy customers rather than narrow them.
• Principle #2: Greenhouse Gas Protocol updates should encourage ambition without unduly limiting options for energy customers, given customers’ diverse skillsets, resources, and geographic dispersal.
• Principle #3: Greenhouse Gas Protocol updates should maintain yet enhance the momentum of the current voluntary CFE procurement market—enabled by market-based accounting—that is demonstrably complementing policymaker action in decarbonizing the grid.

These three principles guided the four recommendations that CEBI is submitting to inform updates to the Greenhouse Gas Protocol:

Recommendation 1: Maintain the market-based method under Scope 2, but update the market-based method in accordance with sub-recommendations 1a-d. 

• Recommendation 1a: Additional guidance should be provided that offers a locational and temporal data hierarchy to help users prioritize electricity consumption data, emission factors in existing hierarchy, and energy attribute certificate (EAC) granularity, where granular certificates should be listed as the highest-precision EAC within the top category of an EAC hierarchy.
• Recommendation 1b: Language should be broadened throughout the Scope 2 Guidance to become technology-neutral for all types of CFE generation and complementary technologies.
• Recommendation 1c: New guidance should prescribe how to account for CFE procurement through energy storage systems, including clean hydrogen.
• Recommendation 1d: The order of operations in which users account for the combination of purchases and grid-supplied CFE should be updated to more accurately reflect and value utility decarbonization.

Recommendation #2, Explore Potential for New Third Impact-based Number: CEBI recommends that the GHG Protocol explore the pros and cons of options to add a required avoided carbon emissions impact-based number and where to put that value in addition to the location-based and market-based methods. CEBI is furthering conversations around the merits of this approach and any prerequisites needed to feasibly calculate, utilize, and report this figure.

Recommendation #3, EACs for Value Chains: CEBI recommends that the GHG Protocol should extend the use of EACs to decarbonize the measured or estimated electricity-based components of an energy customers’ Scope 3 greenhouse gas emissions. By extending to Scope 3 the use of EACs and a market-based accounting framework for CFE procurement currently used for Scope 2, this will encourage and enable customers to take verifiable action to decarbonize the electricity-based components of their value chains.

Recommendation #4, GHGP Process Improvements: CEBI recommends that WRI develop a new process and governance structure for updating the GHG Protocol so that the process is more dynamic, updated more frequently, allows for piloting new approaches, considers the negative market implications of GHG Protocol changes, elevates the needs of and options available to market stakeholders outside the United States and European Union to attract investments, and does not require multiple years per update.

The framework for market-based accounting in the Greenhouse Gas Protocol’s Corporate Standard, which clarifies that customers can apply an emission factor of zero to each megawatt hour (MWh) of CFE they procure and associated energy attribute certificate (EAC) they claim to reduce emissions from their electricity use. This standard has served as a key enabler of the rapid growth in voluntary markets that has helped accelerate grid decarbonization across the globe. 

Today, more than 1,600 companies have net-zero goals under the Science Based Targets Initiative, and nearly 400 companies have set 100% renewable energy commitments under RE100. Customers worldwide now procure over 1 billion megawatt hours of carbon-free electricity annually, creating about $10 billion in addition revenue in 2020 for CFE resources and reducing investment risks. 

Customers’ impact in accelerating grid decarbonization is significant. Since 2014, commercial and industrial customer-led procurement of wind, solar, and battery storage has amounted to 64.5 gigawatts (GW) of new CFE capacity in the United States alone—equivalent to 41% of all new clean capacity additions during this timeframe.

CEBI’s work to identify and develop areas of improvement for the Greenhouse Gas Protocol is one of four interdependent market evolutions under the Next Generation Carbon-free Electricity initiative. This initiative is driving change across global voluntary CFE markets that are necessary to expand the menu of CFE procurement options available to energy customers and enable customers to send more powerful, targeted market signals optimized for grid decarbonization impact. 

The other three market evolutions include measures to enrich energy attribute certificates (EACs) with key new attributes; enable access to more consistent, reliable, and granular data; and enhance customer leadership programs to incentivize customers to implement next generation strategies. 

CEBI published its comprehensive Next Generation CFE Procurement Activation Guide in 2022 that specifies customers’ eight objectives for next generation projects and defines the specific changes that voluntary CFE market stakeholders must make to enable solutions that help customers achieve these objectives and, as a result, accelerate systemic grid decarbonization.

CEBI presented its Greenhouse Gas Protocol revisions principles and recommendations in a public webinar on February 8 and will submit them formally before the March 14 deadline. CEBI encourages all market participants to submit their own recommendations to the Greenhouse Gas Protocol and, where possible, highlight examples about the importance of voluntary CFE markets to accelerate grid decarbonization around the world. 

To support stakeholders with developing their respective recommendations to submit to the Greenhouse Gas Protocol, CEBI is making its detailed recommendations available to the public, upon request. If you would like access to CEBI’s full recommendations to support your submission, please contact Doug Miller at dmiller@cebuyers.org.

The Clean Energy Buyers Institute’s NextGen CFE 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 send more targeted demand signals that accelerate systemic grid decarbonization.

Over the past decade, voluntary purchases of carbon-free electricity (CFE) hastened the deployment of 60 gigawatts of new wind, solar, and storage capacity to the U.S. grid. With mounting pressure to achieve the next level of deep decarbonization, energy customers want more solutions to achieve more differentiated impacts through CFE procurement decisions. Clean hydrogen is one of the solutions customers may want to procure, to achieve their CFE procurement goals and advance economy-wide decarbonization. 

With U.S. federal incentives for clean hydrogen through the Inflation Reduction Act (IRA) taking effect this month, along with parallel policy developments in the European Union and other international markets, we need new ways to verify the clean electricity credentials underpinning clean hydrogen production. As the U.S. Department of Energy prepares to fund regional hydrogen hubs and finalize requirements for the Clean Hydrogen Production Standard (CHPS) that will jumpstart the U.S. clean hydrogen economy, it is critical that energy customers have the opportunity to engage and transact clean hydrogen, to achieve their individual goals and send powerful market signals that unlock greater and swifter investments in clean hydrogen. 

Policymakers must create this market infrastructure that establishes self-sustaining voluntary markets and scales commercial clean hydrogen transactions, verifiable claims, and new investments. 

CEBI recently sat down with RMI, the Center for Houston’s Future, and EnergyTag to better understand opportunities, challenges, and functional requisites to enable a voluntary market for verifiably clean hydrogen, ranging from the use cases for clean hydrogen to how to get the incentive design and carbon accounting right. Here are some key insights from that discussion:

Hydrogen can serve as a transportation fuel, a grid stabilizing storage reserve, and perhaps most promisingly, as a low-cost way to decarbonize several emission-intensive industries that are hard to abate. With incoming tax credits from the IRA that may help make clean hydrogen production more cost-competitive, the green premium of adapting this new technology may significantly decline. These production tax credits may bring the cost of green hydrogen-based production close to parity with fossil-based alternatives in industries that now contribute up to 20% of global carbon emissions, including shipping fuel, fertilizer feedstock, and steel production. 

The European Union’s recent decision to include hydrogen on the list of imports subject to its Carbon Border Adjustment Mechanism (CBAM), a carbon tariff, also highlights the growing relevance of verifiably clean hydrogen production in markets outside the United States. 

With the opportunity clean hydrogen presents to scale industrial decarbonization, it is critical that system stakeholders urge decision makers to move quickly to put voluntary market frameworks in place that include the right provisions. The question of how to “get it right” rests on expanding the voluntary market system to introduce verifiably clean (meaning carbon-free) hydrogen. Energy customers must be able to discover, procure, and verify procurement of clean hydrogen so they can achieve their goals and advance broader decarbonization across the economy. 

Access to a consistent, tradeable, and certified commodity for each kilogram of clean hydrogen will unleash further investment and drive additional clean energy generation. This means the United States can and should follow the lead of stakeholders abroad in developing an energy attribute certificate (EAC) for clean hydrogen, such as CertifHy in the European Union and the I-REC for Hydrogen Code.

Commercializing clean hydrogen solutions through EACs can expedite the uptake of this new technology by creating real customer markets. EACs in electricity markets provide proof that one megawatt-hour of CFE was generated and delivered to the grid. These market instruments underpin voluntary CFE procurement by creating a transactable commodity that customers can procure. 

By linking the EACs associated with clean electricity production to the associated kilograms of clean hydrogen production, the resulting clean hydrogen EAC will create an auditable product that gives customers confidence that their clean hydrogen is in fact carbon-free. EACs for clean hydrogen will unlock a voluntary market and, in turn, increase investments. 

Clean hydrogen production will also create new load on electric grids. To optimize the decarbonization impact of this new load and avoid unintended grid impacts that could increase local grid emissions, clean hydrogen production could send time-sensitive market signals through hourly EACs, known as granular certificates (GCs), to optimize for grid decarbonization impact. 

Clean hydrogen also creates new questions that require clarification from the Greenhouse Gas Protocol around how customers should account for their procurement and use of clean hydrogen. CEBI details various initial recommendations addressing these issues in our comments to the U.S. Internal Revenue Service (IRS) and forthcoming related recommendations to the Greenhouse Gas Protocol’s Scope 2 and 3 updates process currently underway. 

If you are interested in engaging in CEBI’s work to expand voluntary markets for clean hydrogen, reach out to Kate Harrison at kharrison@cebuyers.org. Stay tuned for more information about CEBI’s clean hydrogen insights in the coming months.

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.  

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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: Integrate diversity, 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:

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.

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.

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

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 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.