One of the hottest trends in corporate clean energy procurement is 24/7 carbon-free electricity: An hour-by-hour match of an entity’s energy consumption throughout the day, instead of the traditional method of buying clean energy credits based on annual consumption.
The procurement process, pioneered by Google, Microsoft, and others, can reduce greenhouse gas emissions and clean up local electric grids, but is still relatively uncommon. Can a boost from the federal government jump start 24/7 CFE?
The Biden administration, through the General Services Administration and Department of Defense–itself the single largest consumer of energy in the U.S.–requested information in early February regarding 24/7 carbon-free electricity (CFE) procurement. The move follows Biden’s executive order that directs the federal government to use 100% CFE on a net annual basis by 2030, including 50% on a 24/7 basis.
Through this RFI, the Biden administration aims to demonstrate intent to achieve 100% CFE for federal operations, better understand 24/7 hourly matched CFE, and gather information on potential approaches to meet the goals.
Mark Dyson, senior principal of the Rocky Mountain Institute’s Carbon Free Electricity program, and a prominent advocate for the procurement method, cheered the announcement.
“With this announcement, the federal government joins a growing movement of carbon-free energy buyers interested in more-advanced forms of procurement,” Dyson said. “By tailoring their procurement strategies to regional grid conditions, buyers can help unlock both near-term carbon savings and long-term innovation in technologies that can accelerate full grid decarbonization.”
What is CFE?
RMI defines 24/7 CFE as involving a buyer’s attempt to procure enough carbon-free energy to match a given facility’s load in every hour.
An RMI study titled “Clean Power by the Hour” determined that costs rose with the level of hourly load matching compared to costs for meeting annual procurement targets, near-term emissions reductions for hourly load matching depended on the regional grid mix, and hourly procurement strategies can create new markets for emerging technologies.
Procuring hour-by-hour clean energy within an energy buyer’s grid can lead to a greater drop in greenhouse gas emissions than 100% clean energy matching. At the same time, it can drive deployment of clean firm power generation and long-duration energy storage, according to a study by Princeton University’s ZERO Lab.
Among the Princeton lab’s findings on an hour-by-hour strategy:
Eliminates carbon dioxide emissions associated with a buyer’s electricity consumption
Leads to greater system-level emissions reductions than 100% annual matching
Drives early deployment of clean firm generation and long-duration energy storage
Drives significantly more retirement of natural gas power generation
More costly than 100% annual matching clean energy procurement
CFE in practice
Google has been largely carbon-neutral since 2007 through carbon offsets, and was one of the first companies to buy renewable energy directly through power purchase agreements in 2017. The company now is moving from 100% annual renewable energy matching to 24/7 matching with a goal of achieving that target by 2030.
Its transition involves focusing on regional grid needs and hourly load matching instead of annual, volume-based goals. In 2020, Google said it reached 67% carbon-free energy globally on an hourly basis.
“The broader goal of our program is to accelerate grid decarbonization,” Devon Swezey, Google’s global energy market development and policy lead said during a recent webinar with the Northeast Clean Energy Council and RMI. “That’s why we include grid carbon-free energy in our methodology and tailor our procurement to fill existing gaps in grid CFE today.”
Microsoft, meanwhile, announced in November that it will power its data centers in Virginia with 24/7 clean energy through a 15-year agreement with AES Corporation. The deal is intended to support Microsoft’s goal of matching 100% of its electricity consumption with zero-carbon energy purchases by 2030.
AES will source the energy from a portfolio of 576 MW of contracted renewable assets, including wind, solar, as well as battery energy storage projects in PJM.