Dive Brief:

• Voluntary clean energy power procurements using volumetric or emissions matching strategies lead to zero or close to zero long-run carbon emissions reductions, according to Princeton University’s ZERO Lab.
• However, time-based green power procurements that closely match electricity use to generation output, known as 24/7 purchases, drive “significant” cuts in carbon emissions from the power system but may have premiums of more than $20/MWh, ZERO Lab researchers said in System-level Impacts of Voluntary Carbon-free Electricity Procurement Strategies, a working paper released Thursday.
• The paper found that approaches to clean energy procurement that seem intuitive can have little or no effect on greenhouse gas emissions in practice, said Wilson Ricks, a doctoral candidate at Princeton and one of the report’s authors.

Dive Insight:

The paper from ZERO Lab – short for Zero-carbon Energy systems Research and Optimization Laboratory – comes as companies and others are increasingly buying clean energy, often to meet sustainability goals.

Large energy buyers bought 11 GW of new renewable energy in 2021, representing about a third of all renewable energy capacity additions in the United States that year, the researchers said.

At the same time, there is a debate about preferred clean energy procurement strategies. Generally, voluntary clean energy procurements have been based on buying renewable energy or renewable energy credits to match annual load.

However, there are two emerging options: emissions matching, or carbon matching, and temporal matching. Carbon emissions matching is based on using “locational marginal emission rates,” the amount of carbon emissions tied to specific nodes on the grid. Under the strategy, a company measures the emissions reductions from its clean power purchases compared with emissions directly tied to its load.

Amazon, Meta, Salesforce and General Motors support emissions matching while Google, Microsoft and the federal government have announced 24/7 procurements, the ZERO Lab researchers noted.

The paper was funded by a grant from Google and by the Princeton Zero-carbon Technology Consortium, which is supported by unrestricted gifts from GE, Google, ClearPath and Breakthrough Energy, according to the ZERO Lab researchers, who said they have full editorial independence.

The paper appears to be the first analysis showing the system-level effects of the three procurement strategies, the researchers said.

While the volumetric and emissions matching approaches are the lowest cost, they produce at most minimal carbon emissions reductions, according to ZERO Lab.

“While both matching strategies implicitly assume that this procurement offsets [carbon]-emitting fossil fired generation, we find that it instead almost exclusively displaces capacity additions and generation from other renewable resources,” the researchers said. “All or nearly all of the carbon-free energy procured by voluntary market participants pursuing volumetric or emissions matching strategies would have been generated anyway.”

Temporal matching, however, reduces system-level carbon emissions by requiring carbon-free power production even in hours when fossil-based resources would normally be preferred, the researchers said. It also incentivizes procurement of advanced clean firm generation and long-duration storage technologies that would not otherwise have a market, they said.

The ZERO Lab modeling for the paper is based on commercial and industrial customers in California and in the Mountain West, areas that are solar and gas heavy and wind and coal heavy, respectively, Ricks said. The basic mechanisms that drive the paper’s results should be consistent across the U.S., he said.

At 10% and 25% C&I participation rates in California, 100% volumetric and emissions matching procurement strategies have zero or negligible effects on system-level carbon emissions, the researchers found.

In contrast, a temporal matching approach drives system-level emissions reductions in all cases, with the reduction rate increasing with higher matching targets, they said.

At a 25% participation level, the modeled C&I customers in California would pay an additional $4/MWh for volumetric matching and $6/MWh for emissions matching, according to the paper. For those customers, the cost premium for 84% temporal matching is $8/MWh and as much as $27/MWh for 100% temporal matching, the researchers found.

Aggressive regional or national clean energy standards would increase carbon-free generation under all three strategies, the researchers said.

Editor’s note: The story was updated to clarify that carbon emissions matching is a strategy focused on carbon emissions reductions.