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The truth behind the 100% renewable energy claim

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PAUL HAUPTMEIJER

Thoroughly enjoys working with a start-up team and crafting Value Propositions in co-creation with Utilities and Corporate Users. Worked with 3 online platforms with SaaS Solutions for the Energy Industry. Expertise in Customer Relations, International Business Development (including China), and General Management. BSc in Electronics and Economics. MSc in Business Economics. IMD Alumnus.‍
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Published
November 15, 2021
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It may come as a surprise, but 100% Renewable Energy does not mean that no CO2 was emitted.

So, when today's corporate giants claim to be 100% renewable, are they really? In some measure yes, but technically, no. The truth is more complicated, of course. But in the end, the semantics really don't matter. In this article I will debunk the 100% renewable energy claim, whilst advocating for a further, more impactful sustainability target that companies should, and are beginning to, strive towards.

The 100% Renewable Energy claim stems from the arrangements of Energy Attributes Certificate (EAC) schemes that date back to the early 2000’s. These arrangements allow for compensations that are essentially financial contracts, leaving a big gap between the economical and physical realities in the energy system. Many businesses and governments work with this type of certificate scheme. Think abbreviations like: GOs, RECs, REGOs, and I-RECs. The beauty of these schemes is that significant amounts of money flows to the clean energy producers in this way, possibly helping to finance improvements in capacity. However, compensation always means that CO2 was emitted in the first place. To achieve current ambitious climate goals, we may want to re-think some rules of the game.

A better reflection of the physics and economics of the grid

The electrical system must be kept in balance by matching electricity generation and consumption at all times. The Grid Operator usually manages this real-time balancing, and electricity market participants are required to match demand and supply in each “settlement period” (typically ranging between 5 and 60 minutes, depending on the market) and in each market area. In contrast, EAC schemes currently allow the matching of generation with consumption on a yearly or monthly basis. This allows consumers to claim, for example, the use of solar energy that was produced at noon in summer for consumption that happened overnight in winter.


Adding value to existing energy certificate schemes

In order to move from nominally 100% renewable energy to truly zero carbon we need to make sure that in each settlement period a match is made between a consumer and a Zero-Carbon source that is actually generating power at the very same time that consumption happens. It is that simple. In other words: a 24/7 match is required. Basically, it is what any unsuspecting person would expect if they hear about 100% renewable energy. 

EnergyTag is an industry-led initiative that suggests adding this essential element to existing certificate schemes. EnergyTag is zooming in on every time that matching is happening. Green power from a generator can then be uniquely allocated to a consumer. These conditions can be checked, registered, and certified every time matching happens. We call this granular certification. 

A more transparent certification system gives companies more accurate insight into the sustainability of their electricity consumption. It allows them to make better-informed choices regarding which electricity they want to use, and companies can make their sustainability ambitions even more explicit towards true decarbonisation. 

Getting the entire grid to be 100% renewable energy is a tall order. But, with 24/7 matching and granular certification, we have the tools in hand to help us navigate our way towards fully decarbonising the electrical grid.


What is the role of FlexiDAO in all of this?

FlexiDAO has started to pull together technology and create software solutions that do precisely what EnergyTag has defined. I joined FlexiDAO in early 2020, coming from Powerpeers, which had a similar vision. During 2020 I still felt like we were crying in the wilderness. But this has radically changed over the past few months.

The flywheel is beginning to spin. We are now in good company with some influential organisations leading this shift in commitments: Microsoft, Google, Iron Mountain, IKEA, Mercedes-Benz, and others.

The decarbonisation of the electricity grid to accelerate progress towards SDG7 will undoubtedly require innovations across policy, technology, and business models. Industries will require policy and market reforms that eliminate obstacles to carbon-free energy procurement, as well as new policies that recognise the societal importance of carbon-free energy.

FlexiDAO, as a leading energy traceability software provider and early signatory to the UN Carbon-Free Energy Compact, will continue to strive towards helping companies to track their electricity consumption on an hourly basis, in turn, playing a pivotal role in achieving access to carbon-free power everywhere, all of the time.


Here are some examples of 24/7 hourly RES-E matching use cases:

Microsoft

Illustration of Microsoft’s 100 100 0 vision.
Source: Microsoft

Has committed to a 100/100/0 goal by 2030. FlexiDAO is cooperating in a pilot project which will match one of Microsoft’s data centres with an offshore wind farm in the Netherlands. Check out the case studies here: 24/7 CPPA in NL by Eurelectric and their own article "Made to measure: Sustainability commitment progress and updates by Microsoft"

Google

Iconography of Google’s energy journey from offsetting emissions, reducing emissions and ultimately eliminating emissions.
Source: Google

Google has also committed to consume clean energy around-the-clock. They call this the 24/7 Carbon-Free Energy goal. For more details, read their official article: "New progress toward our 24/7 carbon-free energy goal"

Iron Mountain Data Centers

Source: Iron Mountain

Iron Mountain are among the first to track renewable energy by the hour. They illustrate a future view of how companies will transition to a carbon-free energy supply. Check out the Iron Mountain Official press release.

IKEA

Source: Ingka

IKEA has started piloting tools for 24/7 matching of renewable electricity generation and consumption (hourly time matching). Using 100% renewable electricity across the IKEA value chain is an important part of the Swedish company's 2030 commitment to become climate positive. Find out more in The RE100 article and at the Ingka press release

Mercedez Benz

Source: Eurelectric

Mercedes-Benz has signed a contract for a 24/7 PPA that allows them to make individual choices for renewable combinations from wind, solar and hydro, while securing 100% clean energy around the clock. Read the Eurelectric article "Mercedes-Benz producing cars with 100% renewable energy 100% of the time".

If you would like to know more about how we can help with your renewable contracting, please get in touch with the details below and sign up to our newsletter.

Author

PAUL HAUPTMEIJER

Thoroughly enjoys working with a start-up team and crafting Value Propositions in co-creation with Utilities and Corporate Users. Worked with 3 online platforms with SaaS Solutions for the Energy Industry. Expertise in Customer Relations, International Business Development (including China), and General Management. BSc in Electronics and Economics. MSc in Business Economics. IMD Alumnus.‍
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Published
November 15, 2021
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