Tag: CEBI

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.

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

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

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

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

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

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

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

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

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

EAC Issuers	Governance Structure	Implementation Scope	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 22^nd at 2PM U.S. Eastern (register here).

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. 

Among the top updates necessary to evolve the current CFE market, common to all eight customer-identified objectives for next generation CFE procurement is the need for updated or new leadership programs. There is an opportunity for existing programs to make updates and/or new programs to form that motivate new communities of customers to send more targeted and differentiated market signals with their CFE procurement that drive systemic grid decarbonization. These updated or new programs will complement other needed evolutions in the voluntary CFE market system around capturing new attributes with underlying data in energy attribute certificates (EACs), enabling EAC registries to better serve as a platform of platforms for solution and data providers, and clarifying the role of avoided carbon emissions in CFE procurement-related decision making and greenhouse gas accounting.

In the latest workshop in the NextGen Activator series on July 19^th, 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.

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. 

Representatives from EAC issuing bodies, registries, and standards bodies that oversee voluntary CFE markets across the globe as well as data providers met on July 13th for the sixth workshop in the Clean Energy Buyers Institute (CEBI)’s NextGen Activator series to clarify the data needs to enable EAC issuing bodies and registry to capture needed new attributes in EACs and better serve as a “platform of platforms” for CFE markets.

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	Data Types	Data Sources	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

Implementation Barriers	Details	Potential Solutions
Governance	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.
Data Access	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.
Technical	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.
Resourcing	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.

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

Question	Answer
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.

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 16^th 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.

By capturing a specific set of new attributes in EACs, issuing bodies and registries can solve pre-requisite for solutions for six of the eight customer-identified next generation procurement objectives. 

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.

The Clean Energy Buyers Institute’s NextGen Activator Workshop series is defining the necessary updates to the current system of energy attribute certificates, data, leadership recognition programs, and greenhouse gas accounting to enable an expansion of the suite of carbon-free procurement options available to customers to achieve their clean energy goals and better optimize their decarbonization impact.

A growing group of energy customers want their carbon-free electricity (CFE) procurement to have systemic impacts by sending market signals for investments that accelerate grid decarbonization in places and times where action is most needed. 

Customers are seeking clearer guidance on the use of avoided emissions impacts to drive their CFE procurement decisions and greenhouse gas accounting and reporting. The lack of clarity on how to assess, use for decision-making, and report avoided emissions presents a key barrier to four of the top eight customer-identified objectives for next generation CFE procurement, such as scenarios where a customer wants to procure CFE from the most carbon-intensive locations or times of day in order to optimize emission reductions.

Energy customers, solution providers, and stakeholders assembled at CEBA Connect Spring Summit 2022 on May 18^th, 2022, in Detroit, Michigan for the third workshop in CEBI’s NextGen Activator series to evaluate the role of avoided emissions in CFE procurement decision-making and greenhouse gas accounting. This workshop generated insights to the following three critical questions: 

Question #1: What is the role of avoided emissions (i.e., the change in emissions caused by decisions or interventions) in decision-making? 

Insight #1: Customers want the ability to make comparisons of consequential, carbon-based impacts of CFE procurement options for more informed decisions.

Avoided emissions may serve an important role in decision-making as a new criterion that empowers customers to use a common denominator of decarbonization impact in prioritizing investment decisions across diverse CFE procurement options. These comparisons may result in customers making different CFE procurement decisions than they otherwise would have made. 

For example, the use of avoided emissions as this common denominator may compel a customer to procure CFE in a location or at a time of day where they do not have load because it can deliver greater avoided emissions based on the carbon intensity of the grid in that location or at that time. Similarly, this may compel a customer to take more action to decarbonize their value chain (in line with the U.S. Environmental Protection Agency’s new guidance for buying CFE on behalf of others) or over-procure CFE in certain geographic regions to cover load in other regions with limited or no CFE options. How to capture and report on these impacts is detailed in Question/Insight #3 below.

Question #2: What are the data and methodology bottlenecks to using avoided emissions? 

Insight #2: Access to transparent hourly consumption data and generation data as well as standardized methodologies are needed.

To evaluate avoided emissions, like energy efficiency estimates, customers need access to hourly consumption and generation data and a standardized methodology for the counterfactual (i.e., the baseline for comparison). Although data exists, the level and quality of data needed is not easily or transparently available to customers and the persistent challenge with accessing granular data complicates the ease and accuracy of customers’ measurements of avoided emissions for greenhouse gas accounting and reporting purposes. As these data (or at least modeled estimates in the interim) become available, customers are asking for clearer guidance from market system stakeholders about how to determine the counterfactual for calculating the avoided emissions and how to report avoided emissions in greenhouse gas accounting and reporting. 

By gaining access to better data and clarifying how to use that data to measure avoided emissions, it will become easier to create market incentives and recognize customer leadership. For example, access to granular data will make it easier for customers to evaluate the decarbonization impact of charging or discharging a battery at a certain time of day, which then may cause demand for new categories in existing leadership recognition programs, or an entirely new customer leadership recognition program focused on maximizing avoided emissions. 

Question 3: Can a company include avoided emissions directly in its corporate inventory for greenhouse gas accounting and, if so, what are the implications for reporting emissions? 

Insight #3: Capturing the avoided emissions impact of actions is important, but there is a lack of consensus on how and where they should be accounted for and reported. 

Traditionally, avoided emissions and carbon offsets have been treated similarly by reporting them as supplemental information, but not directly part of corporate greenhouse gas inventory accounting. Currently, a growing group of energy customers and solution providers believe positive decarbonization impacts on the grid from clean energy procurement targeting dirtier grids results in a more granular type of avoided emission that should be calculated and reported differently than a conventional offset. 

While discussions will continue if and how it is possible to incorporate avoided emissions directly in a corporate inventory, three options surfaced for incorporating avoided emissions into greenhouse gas reporting for stakeholders, each of which CEBI will explore further with its NextGen Activator community: 

1. Report avoided emissions as supplemental information only, with the requirement to disclose following standardized methodologies (this is closest to the status quo since it is currently optional to disclose avoided emissions).
2. In addition to location-based and market-based figures, companies optionally report a new third avoided emissions value under Scope 2 (which would need to follow standardized methodologies and calculations).
3. Report avoided emissions outside the Corporate Standard but following an additional method under the GHG Protocol (akin to the project-based standard).

While the discussion continues about a sound recommendation on how to treat avoided emissions, there is common ground among participants: while energy customers can and should value avoided emissions and can elect to use this metric alongside other impact metrics for their CFE procurement, any updates to accounting and reporting methodologies should not eliminate existing CFE procurement options or disrupt existing transactions. In other words, a solution for avoided emissions that undermines global momentum and growth in voluntary CFE markets must be avoided. Adoption of avoided emissions as a decision-making criterion and metric for greenhouse gas accounting and reporting depends on parallel evolutions in the voluntary market system (i.e., as discussed above, the attributes and underlying data carried by energy attribute certificates, plus standardized methodologies and calculations for avoided emissions). 

Additionally, customers and solution providers also emphasized the importance of market instruments (i.e., energy attribute certificates) for voluntary market integrity and growth. Any solution for the treatment of avoided emissions should not undermine the availability of market instruments because these instruments are the linchpin of procurement and procurement verification in voluntary CFE markets. Instead, any solution should focus on adding attributes to capture in energy attribute certificates to reflect carbon and/or clarifying how to differentiate across procurement options and capture any associated avoided emissions in greenhouse gas reporting.

CEBI will continue the NextGen Activator workshop series over the coming months to develop comprehensive guidance on implementation pathways for the updates needed to evolve the current system of underpinning voluntary CFE markets: 

• Energy attribute certificates, where engagement is encouraged particularly from energy attribute certificate standards and issuing bodies / registries;
• Data access, where engagement is encouraged particularly from data providers and standards bodies;
• Customer leadership recognition programs, where engagement is encouraged particularly from existing programs and customers that participate in these programs; and
• Greenhouse gas accounting and reporting frameworks, where engagement is encouraged particularly from customers and solution providers along with market system stakeholders. 

This guidance will sow the seeds for activating a broader suite of CFE procurement options that advance systemic investments in decarbonizing the electric grid. Stay tuned for information on dates and registration in the CEBI and CEBA newsletters. Subscribe to receive updates.

The Clean Energy Buyers Institute’s NextGen Activator Workshop series identifies energy market gaps and changes necessary to help energy customers advance toward and optimize the decarbonization impact of their clean energy procurement.

Energy customers and solution providers have clarified the key updates required for evolving the current system underlying the voluntary carbon-free electricity (CFE) procurement market. These updates, if addressed, will advance the introduction of new procurement options to help customers optimize the decarbonization impact of their procurement decisions. During the second workshop in the NextGen Activator workshop series, convened by the Clean Energy Buyers Institute (CEBI), more than 70 energy customers and solution providers offered input on the changes necessary to the current system of energy attributes, data, greenhouse gas accounting frameworks, and leadership recognition programs to introduce solutions that help customers achieve the top eight objectives for next generation CFE procurement. 

Table 1 summarizes the overall types of market updates needed to support new types of voluntary CFE procurement options so customers can maximize the decarbonization impact of their procurement decisions. There are four key areas of opportunity to update to the current voluntary market system to unlock new CFE procurement options:

• New or updated customer leadership and recognition programs: Common to all customer objectives is the opportunity to evolve existing or create new customer recognition programs, such as the UN’s 24/7 CFE Compact targeting 24/7 voluntary procurement, that encourage and acknowledge the implementation of new CFE procurement practices. Recognition programs are important because they validate the importance of certain procurement options, inform company goal setting, and showcase the associated achievements of companies. 
• New energy attribute certificate (EAC) types and/or attributes with underlying data: Customers seeking new EAC types and/or attributes that capture more CFE resources (e.g., nuclear energy, efficiency energy, demand response), complementary resources (e.g., long- and short-term storage), and more attributes such as granular timestamps, grid carbon intensity, and supportive social/community impacts (e.g., jobs created by a CFE resource, community ownership information, and environmental and social impact-related certifications). Each of these EACs require access to different data sources to ensure the quality of the attribute being captured by the EAC. 
• Clarity on avoided carbon emissions: Customers seek clearer guidance on the use of avoided emissions as a criterion for CFE procurement decisions and greenhouse gas accounting. For example, if a customer procures CFE during the most carbon-intensive times of day or in the most carbon-intensive locations to achieve its own decarbonization target, then this customer needs to know how to account for this type of procurement for its annual greenhouse gas inventory.  
• Updates to market, Scope 2 vs. 3, and impact boundaries: There are several types of “boundaries” that must evolve (or dissolve) to enable customers to procure more CFE. New and/or expanded boundary definitions are needed to enable customers to over-procure CFE in certain geographies to cover their inability to procure CFE in other geographies with limited or unavailable CFE options, power more parts of their value chain (both upstream and downstream) with CFE to reduce their Scope 3 emissions, and capture efforts where a customer’s engagement with utilities, governments, or regulators help change the overall grid mix.

Table 1: Key CFE Market Updates Needed to Enable Customer-Identified Next Generation Procurement Options 

Let’s dive into three specific examples to further illustrate how and why these market system updates will enable new types of procurement options: 

• Example 1, CFE procurement on an hourly basis: For a company that wants to match their CFE procurement with their actual real-time load, there is a need for EACs that provide granular timestamps and for these timestamped EACs to synchronize with EAC registries/issuing bodies. Nonprofit EnergyTag has advanced quickly with industry stakeholders to develop the Granular Certificate Scheme Standard and Use Case Guidelines. CEBI is collaborating with EnergyTag and serving on its Advisory Committee.
• Example 2, CFE procurement based on maximum avoided emissions potential: For a company that wants to consider avoided emissions in their procurement decisions, they need access to quality data about the avoided emissions potential of different decisions, the ability to support avoided emissions claims through suitable EACs, and clarity as to if/how avoided emissions can count toward reducing its annual greenhouse gas emissions.
• Example 3, CFE procurement for value chains: For a company that wants to procure CFE to reduce its Scope 3 emissions by covering the electricity use associated with its suppliers and/or its customers’ use of the company’s products/services, greater clarity is needed on how to apply EACs across value chains to reduce customers’ Scope 3 emissions and how recognition programs can incentivize customers to procure CFE for their value chains.

In the coming months, CEBI will continue to unpack the detailed requirements for each of these market system updates and clarify the specific parties best positioned to implement these updates. CEBI will also further characterize customer needs for next generation procurement in order to support solution providers in preparing to deliver new CFE solutions to customers as these market updates are implemented. CEBI invites customers, solution providers, and voluntary market system stakeholders to the third NextGen Activator workshop on May 18th in-person at our Spring Summit in Detroit (registration here), which will inform open questions about the role of avoided emissions in CFE procurement decision making and greenhouse gas accounting and reporting.