Is 24/7 carbon-free energy the right goal?

Last week, I wrote an introduction to the hot new trend in energy: 24/7 carbon-free energy (CFE), i.e., matching a company or city’s power consumption with production of clean electricity throughout the day, every hour of every day. If you haven’t read it yet, you’ll want to check it out before reading this post.

Today, I want to talk about a big debate around 24/7 CFE, regarding whether it’s the right goal for companies and cities to adopt at all. Exploring that debate will help us get our heads around what 24/7 CFE can and can’t accomplish.

But first, a quick refresher.

Here’s the idea: right now, in addition to generating electricity, renewable energy projects generate renewable energy certificates (RECs), one for each megawatt-hour. They can sell the RECs to any entity looking to buy renewable energy. For instance, a company or city that wants to go “100 percent renewable” can simply buy enough RECs to cover its yearly electricity consumption.

At least two changes would be required to make 24/7 CFE possible. First, “renewable energy” would expand to “carbon-free energy.” Any generator putting out electrons without carbon emissions, including nuclear or natural gas with carbon capture and sequestration (CCS), would qualify.

And second, RECs, rather than coming in month- or year-long chunks, would be issued in time-stamped increments of an hour, so that buyers could target procurement at the particular hours of the day when they need CFE. Eventually, each hourly REC would contain information about avoided carbon emissions, so buyers could tally up the carbon impact of their purchases.

That’s the vision.

In this post, I’m going to discuss an objection to 24/7 and some counter-arguments to the objection. Then, in my next post (yes, this is turning into 24/7 Month), I’ll look at some new modeling of the impact of 24/7 procurement and try to draw some conclusions. We’re going to have a good time.

Measuring carbon is mostly doable

An intrinsic part of the 24/7 CFE vision is that each hourly REC will be tagged with a certain amount of avoided carbon. This will allow buyers to make procurement decisions that take emissions into account.

There are some issues and controversies around calculating avoided carbon, though they’re not the ones I’m going to focus on today. Some carbon counters have proprietary formulas (like WattTime) and some are trying to develop open-source methods (like EnergyTag).

The numbers they produce are not radically different, but they do differ. They vary in how they calculate the marginal (most expensive) energy source on the grid at a given moment — the marginal generator is the one that will spin down to make room when the CFE is produced. They differ in how to draw the geographic boundary of analysis, which can affect results. And other stuff like that.

“To go from the generation data to the local carbon emissions data is not trivial,” says Toby Ferenczi, founder of EnergyTag, “because you're trying to model the flow of electrons. Until you can track a single electron through the system, there will always be different types of approximations.”

There’s also the question of how distributed energy resources (DERs) are treated. Right now, grid operators tend to have little visibility into or control over DERs; energy generated locally, on a distribution grid, is viewed by grid operators as reduced demand on that grid. Bringing DERs more fully into the picture as deployable resources is an important long-term challenge.

There are data issues too. If you look at electricityMap, which seeks to track the carbon intensity of every grid in the world, at every hour, you will see that there are still big holes, areas where utilities have not made the data public. New regulations and laws requiring grid operators to make these numbers available is another priority.

Anyway, I’m not going to dig into these technical issues. I have faith that, if an hourly REC market gets going, these kinds of questions will be ironed out. The general sentiment is that it is more important to have a common set of numbers than it is for those numbers to be accurate down to the decimal.

Instead, let’s turn to the more fundamental challenge to 24/7 CFE.

24/7 vs. emissionality

Unlike air pollution, which concentrates where it is emitted, carbon dioxide diffuses completely into the atmosphere. It doesn’t matter where it is emitted; all tons are the same, from a climate perspective. One company or city’s emissions are no different than any others. There’s nothing about your hourly emissions that make them special.

It follows that, if you’re a company that wants to reduce carbon emissions, the thing to do is buy clean energy on the dirtiest grid possible, wherever it will displace the most carbon-intensive energy and thus prevent the most emissions. If you take an international perspective, that will probably be somewhere overseas, in Asia or Africa; if you take a US perspective, it will be in states like West Virginia, Wyoming, and Kentucky.

The best way to do this is with bundled RECS — RECs purchased together with the energy that produced them, through long-term power purchase agreements (PPAs) — because that’s the approach most likely to actually lead to new clean energy projects being built. But “most organizations are not in a position to sign long term PPAs,” says Ferenczi. “All they know is: I want to buy good electricity, not bad electricity.” For them, unbundled RECs are the only option.

Either way, if you want to reduce emissions with your CFE procurement, it must be guided not only by what’s most likely to lead to new projects (“additionality”), but also by what will reduce the most emissions (“emissionality”).

This word emissionality is a terrible neologism — the latest of many out of the energy world — but I’m living with it, because it’s a helpful way to refer to the quantification of carbon emission reductions.

Now, take note: optimizing your clean-energy procurement for emissionality is different from optimizing it for your own 24/7 consumption.

The former strategy maximizes emission reductions. The latter does not. In some cases, optimizing around your own consumption could fail to reduce emissions or even increase net emissions, despite increasing your share of CFE.

One simple example: imagine one company has signed a bunch of solar PPAs and thus has more hourly RECs during the day than it needs to cover its consumption, but it has a shortage at night; another company has signed a bunch of wind PPAs and thus has excess hourly RECs at night, but a shortage during the day. The companies can simply trade hourly RECs. Each has increased its CFE score, but no new clean energy was built and no carbon emissions were reduced.

Another example is how companies choose to deploy batteries. Mark Dyson, an energy analyst at RMI, explained it to me this way:

A battery optimized for 24/7 would charge when a buyer has procured “excess” renewable energy in a particular hour, but in most grids, for the foreseeable future, a fossil generator will usually be the marginal unit at the system level — so charging storage increases carbon emissions in that hour.

Discharging the battery later would offset generation from another fossil generator and reduce emissions, but there’s no guarantee the