Currently, companies and utilities meet their renewable energy commitments with renewable energy credits (RECs) that are reconciled on an annual basis. This means companies and utilities can reach even 100% renewable commitments while relying heavily on fossil fuels during many periods of the year. While annual RECs have been instrumental in the growth of renewable energy, governmental and private sector leaders are increasingly pointing to the climate benefits that could be captured by transitioning to hourly carbon accounting.
REV2023 tackled the issue of transitioning to hourly emissions accounting with the panel Strategies for Advancing 24/7 Carbon Free Energy featuring Patrick Falwell (Green Strategies Inc.), David Farnsworth (Regulatory Assistance Project), and Rachael Straub (CX Associates), and moderated by Nate Hausman (Green Mountain Power).
Fallwell laid out the rationale for an hourly accounting process: the time and location of generation actually matter in the physical world. Matching a percentage – even 100% – of annual consumption with RECs on an annual basis still leaves utilities and companies reliant on fossil fuel generation during many periods of the year. Creating geographically tailored, 24/7 matching requirements would create strong incentives to clean up power generation.
Fortunately, many entities are setting goals and commitments to 24/7 use of carbon-free electricity, including the Federal government, Google, Microsoft, Iron Mountain, Peninsula Clean Energy, and five U.S. cities. Similarly, several companies are helping to develop the 24/7 marketplace by validating and forecasting hourly emissions but the need for improved data and current emissions accounting protocols are still barriers to improving the granularity of carbon accounting.
Farnsworth shared progress on a Regulatory Assistance Project initiative to examine the technical challenges of implementing 24/7 accounting and creating tariff options to facilitate the transition to hourly matching. Farnsworth argued it is possible to implement practical tariffs today that will drive the planning, operational, emissions tracking, and ratemaking changes needed to achieve long-run best practices. Transitional tariffs should support operational improvements such as increased forecast frequency, hourly tracking for all generation systems, and rely on the best available data for emissions and customer load.
Straub covered the important but underappreciated role that buildings can play as grid assets through enhanced efficiency, on-site generation, and integrated thermal and electrical storage. Battery and thermal storage give building the capacity to shift demand throughout the day, optimizing the use of renewables and creating a flatter load curve. While these investments often make sense from a societal perspective, the return on investment for some of these investments is not always beneficial for building owners. Shifting to 24/7 accounting would help to incentivize building owners to make investments in grid-integrated buildings.
View the presenters’ slides.