Organizations globally are wrestling with both the volatile cost of energy and how to meet the goals they set for adopting clean energy and/or reducing their carbon impact. That clean energy can be sourced from onsite generation, offsite power plants through corporate power purchase agreements or from the local grid. For those organizations working to mitigate their impacts on climate change, the procurement of carbon-free energy – and even when and where it comes from – is a hot topic .
To illustrate how carbon-free energy has grown in profile on the global stage, the United Nations (UN) even has a 24/7 Carbon-Free Energy Compact. The world’s leading governments, corporations, and environmental organizations are blazing a new path forward in the fight to decarbonize our energy sources.
In this post, we’ll cover the concept of 24/7 hourly matching by sharing key definitions, benefits, and barriers to success. Keep reading to learn how you can apply these principles to your own ESG and sustainability efforts.
What is 24/7 Hourly Matching of Electricity?
24/7 Carbon Free Energy (CFE) refers to total decarbonization or “absolute zero” of energy. This occurrence takes place when an organization is running on clean energy every hour, every day, at every location.
According to European clean energy producer Vattenfall, 24/7 hourly matching means that there is “an hourly match of consumption and production of renewables.” 24/7 hourly matching helps climate-conscious organizations achieve demand and output goals while benefiting from smarter and more transparent consumption.
As organizations pursue 24/7 CFE, the production of energy moves from annual matching to hourly, and it matches the time and location of both generation and consumption.
What Does 24/7 Hourly Matching Help Achieve?
Both now and in the future, 24/7 hourly load matching helps drive total decarbonization throughout the power grid because there is a more direct connection between energy that is being sourced and consumed. When the carbon impact of businesses and organizations is calculated annually, there is still a gap between procurement and impact on the grid.
Factoring in the hourly matching of energy thus allows companies to work towards, and eventually prove, an “absolute zero” emissions amount or total decarbonization.
Most Common Benefits of Hourly Matching
Leading ESG and sustainability teams at organizations around the world are looking for energy procurement and carbon mitigation strategies that can balance energy procurement costs and meeting operational needs with strong results towards their clean energy or carbon reduction goals. Hourly matching improves transparency and helps ESG and sustainability leaders make better strategic decisions.
Energy providers can more easily understand demands for renewable energy
More transparency into customers’ load data as well as their energy or carbon goals can help energy suppliers better understand market demand and prioritize the right investments for long-term efficiency and growth.This in turn positions them to better meet the needs of customers with commercial- or industrial-scale energy needs and help them meet their sustainability targets.
Businesses can translate sourcing of renewable energy into climate impact
Hourly 24/7 reporting allows for a verifiable audit trail when companies are undergoing review of their data and metrics for annual reporting. This helps them to verify sustainability claims and reduce the risk of greenwashing claims, which could harmfully mislead consumers (even if false) and lead to slowing or backpedaling of sustainability efforts.
24/7 hourly matching drives true market demand
24/7 CFE will help drive the overall decarbonization of electric grids globally. As more corporations adopt the 24/7 CFE methodology, market demand for renewable energy will go up. As a result, this encourages the development of more renewable energy assets like solar, wind, geothermal and hydropower plants.
Ability to match increasing transparency and accuracy of renewable energy purchasing
With 24/7 hourly matching, companies can better see and eventually select the types of electricity that they need to produce and use on a regular basis. For example, some organizations might opt for hydropower-generated energy when there is a lack of wind energy available, while others may work with suppliers who employ a mixture of solar, wind and battery storage. This improves decision-making and helps companies report more accurate and complete information to consumers and stakeholders.
Opportunity to support development of low-carbon firm energy resources
Firm energy resources are technologies that can supply electricity reliably for weeks or months on end. Today, that role is primarily fulfilled by fossil fuels like coal or natural gas. Embracing 24/7 CFE will encourage more development of firm resources that can increase the reliability of intermittent resources like wind and solar energy.
Low-carbon firm energy sources include things like nuclear energy, carbon capture and storage, energy storage like pumped hydro or battery storage, biomass, and geothermal energy which are necessary to achieve total grid decarbonization.
What Are Some of the Barriers to Purchasing Renewable Electricity on an Hourly Basis?
Although 24/7 hourly matching offers significant benefits, transitioning to this model is a gradual process. In addition to the advantages, organizations must be aware of potential roadblocks and growing pains associated with an hourly model.
The need to completely understand your electricity consumption profile
In order to purchase renewable energy on a 24/7 basis, you first need to understand the load profile of your current consumption data. Fortunately, most of this data is readily available through existing smart devices and digital monitoring tools.
Leading carbon accounting capabilities are being developed by companies like Cleartrace to illuminate previously unseen energy consumption data and to enable more granular procurement and proactive decision making.
Renewable energy credits aren’t enough
RECs typically lack the true source, time, location, and environmental characteristics behind the clean power they are associated with. This means that instead of decarbonizing their operations, many companies are simply purchasing cheap certificates and using annual averages to support their sustainability claims.
New procurement standards are being developed to enable granular energy procurement by organizations such as EnergyTag and hourly REC markets like M-RETS. Companies like Cleartrace also offer REC impact data, a valuable tool in reshaping what it means to truly achieve decarbonization.
Is 24/7 CFE the next step in carbon commitments—or a distraction?
If your organization is moving toward 24/7 CFE, it’s time to prepare for the future. The U.S. Securities and Exchange Commission (SEC) has already proposed a new rule to standardize climate-related disclosures for publicly-traded companies, to provide investors with better information about climate-related risks. This rule, and others like it, will set a clear precedent for increasing climate rule standards.
Not only will 24/7 CFE accelerate decarbonization of the electric grid, it’s also set to become the future of how not only companies but regulators and investors gauge carbon risks and liability.
Get an accounting system that values the pursuit of 24/7 hourly matching
Wherever you are in your decarbonization strategy, it’s time to look for solutions that help you support your sustainability efforts, position you against greenwashing claims and embrace leading renewable energy procurement practices, up to and including 24/7 CFE.
Request a Cleartrace demo today to get started with a decarbonization expert.