Energy transition has passed to another phase with the passage of the Inflation Reduction Act (IRA) in the US and the European Parliament's vote favoring a 45% target for renewable energy in the EU's energy mix by 2030.
The inflation Reduction Act is the most significant climate legislation in US history, with a nearly $140 billion share for installing renewable energy projects and manufacturing out of a $369 billion total. Besides significantly impacting the renewable energy industry with the incentives and tax credits, the law also covers many areas, from buildings (including households) to transportation, agriculture, and forestry, while creating economic opportunities.
According to the REPEAT project (Rapid Energy Policy Evaluation and Analysis Toolkit) led by the Princeton ZERO Lab (Prof. Jesse D. Jenkins, PI), in partnership with Evolved Energy Research and Prof. Erin Mayfield of Dartmouth College, IRA is expected to avoid 6 billion tons of emissions over the next decade.
Following President of the EU Commission Ursula von der Leyen’s congrats to US President Biden for the signature of IRA, the European Parliament has also taken action on climate ambitions.
On Sep 14, 2022, voting on an amendment to the EU’s Renewable Energy Directive, Members of the European Parliament (MEPs) adopted the goal for renewable energy for 2030 as 45%.
Besides adopting the renewable energy goal, one of the most remarkable amendments to the Renewable Energy Directive highlights the need for granularity* in schemes for guarantees of origin. Thus, the European Commission has officially recognized the granularity that big companies, start-ups such as Blok-Z, and NGOs work on and emphasize.
24/7 Carbon-Free Energy and granularity have been on the agenda of many institutions and companies for quite some time. As a result, many studies are being executed, and initiatives are working on the subject. Let’s take a look at the most prominent ones.
1. Energy Tag – Granular Certificates
EnergyTag is an independent industry-led initiative to accelerate the shift to 24/7 clean energy. In early 2022, they published Granular Certificate (GC) Scheme Standard for creating a framework for Energy Attribute Certificates with a sub-hourly timestamp.
The EnergyTag GC Scheme Standard was developed with various industry stakeholders, including renewable energy generators, utilities, energy traders, and technology providers. It provides a blueprint for developing EACs with a timestamp granularity of as little as 15 minutes, which can accurately reflect the output of variable renewable energy sources like wind and solar.
EnergyTag has also been working to promote the adoption of the GC Scheme Standard by governments, utilities, and other stakeholders in the energy sector. The organization believes that adopting more granular EACs can unlock the full potential of renewable energy and accelerate the transition to a clean energy future.
2. 24/7 Clean PPAs by LDES and McKinsey
The concept of 24/7 Clean Power Purchase Agreements (PPAs) has been gaining traction in recent years to accelerate the transition to clean energy. 24/7 Clean PPAs are agreements between a renewable energy generator and a buyer, such as a company or utility, that guarantee a steady renewable energy supply over 24 hours.
LDES (Long Duration Energy Storage) and McKinsey & Company have been among the leading advocates of 24/7 Clean PPAs. In a recent report, they argued that 24/7 Clean PPAs are a critical tool for achieving deep decarbonization of the energy system and can help overcome some of the challenges associated with integrating variable renewable energy sources.
The report highlights several critical considerations for developing 24/7 Clean PPAs, including the need for flexible demand-side management, the importance of long-duration energy storage, and the role of digital technologies in enabling real-time energy management.
Overall, the concept of 24/7 Clean PPAs represents a significant step forward in the transition to a clean energy future and is likely to play an increasingly important role in the years to come.
3. Time-Based EACs (T-EACs) by Google
Google has been another key player in the push for greater granularity in energy attribute certificates (EACs) through its development of Time-Based EACs (T-EACs). T-EACs are designed to provide a more accurate representation of the time-varying nature of renewable energy generation by enabling the tracking of the time of generation and the location of the source.
In contrast to traditional EACs, typically issued monthly or annually and providing a more aggregated view of renewable energy generation, T-EACs can be issued on a sub-hourly basis, such as every 15 minutes or every hour. This can provide a more detailed and precise representation of the renewable energy generated and consumed.
Google has been using T-EACs to help meet its ambitious sustainability goals, which include sourcing 100% carbon-free energy for its operations hourly by 2030. The company has also been working to promote the adoption of T-EACs more broadly and has developed a set of guidelines to help other companies and organizations implement T-EACs in their operations.
Overall, T-EACs represent an essential innovation in the realm of EACs and can help to accelerate the transition to a cleaner, more sustainable energy system.
4. 24/7 Hub by Eurelectric
The 24/7 Hub is an initiative by Eurelectric, the trade association representing the electricity industry in Europe. The goal of the 24/7 Hub is to facilitate the transition to a 24/7 carbon-free electricity system by providing a platform for energy market participants to collaborate and share best practices.
The 24/7 Hub is designed to support the integration of variable renewable energy sources into the electricity grid by providing a forum for stakeholders to work together on issues such as grid stability, flexibility, and storage. The platform also aims to promote the development of new technologies and solutions to support the transition to a 24/7 carbon-free energy system.
One of the critical features of the 24/7 Hub is developing a common language and metrics for tracking renewable energy generation and consumption. This is intended to facilitate the development of more accurate and reliable data on the availability of renewable energy and to support the development of new energy market products and services based on this data.
Overall, the 24/7 Hub represents a significant effort to promote collaboration and innovation in transitioning to a more sustainable and resilient energy system. By bringing together industry stakeholders and promoting the adoption of common metrics and standards, the platform has the potential to accelerate progress towards a 24/7 carbon-free energy system in Europe and beyond.
5. UN 24/7 Carbon-Free Energy Compact
UN 24/7 Carbon-Free Energy Compact is an initiative launched by the United Nations in September 2020 to promote the transition to a sustainable and low-carbon energy system. The initiative aims to bring together countries, cities, companies, and other stakeholders to commit to achieving 24/7 access to affordable, reliable, and sustainable energy by 2030 while also achieving net-zero emissions by 2050.
The Compact provides a platform for stakeholders to share best practices, collaborate on innovative solutions, and mobilize resources to support the transition to a sustainable energy system. By bringing together a broad coalition of stakeholders, the initiative aims to accelerate progress toward achieving the Sustainable Development Goals (SDGs) related to energy access, climate action, and sustainable development.
The UN 24/7 Carbon-Free Energy Compact focuses on four key areas: clean energy generation, energy efficiency, energy storage, and smart grids. By promoting innovation and collaboration in these areas, the initiative aims to unlock new opportunities for sustainable energy development and help countries and companies to transition to a more sustainable and resilient energy system.
Overall, the UN 24/7 Carbon-Free Energy Compact represents a significant effort to promote international cooperation and action on sustainable energy and to mobilize the resources and expertise needed to accelerate progress toward a more sustainable and equitable future.
Energy Transition Accelerates
Google, EnergyTag, LDES, Eurelectric’s 24/7 Hub, and the UN Carbon-Free Energy Compact share a common goal. While they may approach the topic from slightly different angles or use different terminology, the underlying goal is to provide more detailed and accurate information about the renewable energy being generated and consumed.
This convergence of efforts is not necessarily surprising, given the urgent need to transition to a more sustainable energy system and the growing recognition of the importance of granularity in achieving that goal. By working together and sharing best practices and insights, we help to accelerate progress towards a more sustainable energy future.
*In the context of renewable energy, "granularity" refers to the level of detail at which energy attribute certificates (EACs) are tracked and traded. EACs are used to verify and track the generation and consumption of renewable energy. They are typically traded in hourly or daily increments, meaning the renewable energy source is verified as having generated energy during that specific period.
However, some renewable energy sources, such as wind and solar, can vary in output over much shorter periods. For example, wind speed can frequently change, leading to fluctuations in the electricity generated by a wind turbine. To accurately track and verify the generation of renewable energy from these sources, it is necessary to use EACs with a much shorter period, such as every 15 minutes or every 5 minutes. This is where the concept of "granularity" comes in.
By tracking and trading EACs at a more granular level, it is possible to verify and track the generation and consumption of renewable energy from variable sources like wind and solar. This, in turn, can help to incentivize the deployment of more renewable energy generation capacity and make it easier for consumers to choose clean energy options.