Going beyond the clean energy PPA to decarbonize the grid
By matching energy consumption with clean energy produced elsewhere on the grid, power purchase agreements have allowed corporations to take action to address the current and future risks posed by climate change.
But, in some cases, there’s an opportunity to go beyond the PPA, and more effectively decarbonize the grid through hourly load matching, or 24/7 matching, according to an analysis by RMI. RMI defines hourly load matching as “where a buyer attempts to procure sufficient carbon-free energy to match a given facility’s load in every hour.”
The findings of the “Clean Power by the Hour” determined: costs increased with the level of hourly load matching compared to costs for meeting annual procurement targets, near-term emissions reductions for hourly load matching depend on the regional grid mix, and hourly procurement strategies can create new markets for emerging technologies.
“Overall, we find that hourly load-matching strategies can help lay the groundwork for a decarbonized grid in the long term but should be carefully tailored to region-specific grid dynamics to also maximize emissions reductions in the near term,” RMI authors wrote in the report. “Buyers who have not yet offset 100% of their annual electricity use with procured (carbon-free energy) can feel confident that doing so based on annual targets in regions with low renewable energy adoption will continue to create material climate benefits. This can be done even as buyers who have already met that goal continue to push the envelope of sophistication and pave the way toward a 100% CFE grid.”
Google, for example, has been carbon-neutral since 2007 through carbon offsets, and was one of the first companies to purchase renewable energy directly through PPAs in 2017. The company is now in the process of transitioning from 100% annual renewable energy matching to 24/7 matching by 2030.
That transition involves focusing on regional grid needs and hourly load matching, instead of annual, volume-based goals. In 2020, Google 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 webinar with the Northeast Clean Energy Council and RMI on Tuesday. “That’s why we include grid carbon-free energy in our methodology and tailor our procurement to fill existing gaps in grid CFE today.”
Alicia Barton, CEO of First Light Power, notes that the corporate PPA can mitigate risk but “prevents combinations of technologies like the ones that are going to be important to deliver what we need for the grid.”
President Biden has set a goal of decarbonizing the U.S. grid by 2035, and in March pledged to support 24/7 matching at the urging of Google, Hewlett Packard, and the Clean Air Task Force.
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