Dive Brief:
- AES, Constellation, Google and Microsoft have joined forces with energy marketplace administrator LevelTen Energy to create the Granular Certificate Trading Alliance and design a new marketplace for trading time- and location-specific renewable energy certificates, according to a Dec. 14 announcement.
- The new trading platform, which is expected to go live next year, will be designed to facilitate purchases by corporate and utility energy buyers who are looking to meet 100% of their energy needs with clean energy on an hourly, 24-7 basis, according to LevelTen chief operating officer Jason Tundermann.
- A transparent, easily accessible energy marketplace should send more accurate signals to renewable energy developers about where projects are most needed, Tundermann said.
Dive Insight:
Some of the same companies that pioneered the concepts behind today's power purchase agreements, known as PPAs, are now leading the development of “granular certificates,” a new energy product for the next generation of clean energy ambitions, Tundermann said.
Like renewable energy certificates, or RECs, granular certificates can be sold by renewable energy generators to corporations or utilities looking to make verifiable claims about the amount of clean energy that powers their operations. But unlike most of today's RECs, Tundermann explained, granular certificates include information about when and where the power was generated — attributes of interest to organizations hoping to verify that they source clean energy 24-7, 365 days of the year.
Although Constellation has already facilitated 24-7 energy contracts for a handful of customers, the data needed to execute these deals is still hard to come by, said Mason Emnett, senior vice president for public policy at Constellation. Registries that document the output of energy projects don't typically track data on an hourly basis, he said. Nor is there a simple means of locating projects or developers who can meet specific needs for buyers looking to fill difficult gaps when renewable generation is scarce, Emnett said.
And as a provider of clean energy, he said, “we need all that data to stand behind the claim we are making to the customer.”
LevelTen doesn't see granular certificates replacing power purchase agreements, which will likely remain the more affordable option for long-term power procurement, Tundermann said. Instead, he envisions a future scenario where a clean energy buyer might enter into a PPA or series of PPAs to cover the bulk of its energy needs, using granular certificates to cover times when contracted wind or solar plants aren’t generating.
LevelTen intends to launch a platform creating both a forward market that would allow buyers and sellers to trade granular certificates based on the anticipated availability of clean energy at a specific point in the future, as well as a spot market where trading takes place on a more immediate basis if, for example, expected generation falls short of demand.
Emnett agreed with Tundermann that the creation of a marketplace for granular certificates could impact future renewable energy development, and siting in particular.
“The intent of the structure is to inform the development of resources by identifying where is the relative value,” he said. But he said Constellation also hopes that the marketplace will drive greater demand for granular certificates and 24-7 energy projects by making these options more easily accessible to companies that can't afford to hire an entire team of people dedicated to energy procurement.
