System-level Impacts of 24/7 Carbon-free Electricity Procurement

This study represents the first analysis of the electricity system-level impacts of 24/7 carbon-free energy procurement (24/7 CFE).

• We use a detailed open-source electricity system optimization model, GenX, which plans investment and operational decisions to meet projected future electricity demand while meeting all relevant engineering, reliability, and policy constraints at lowest cost.

• In this study, we implement a set of new constraints to model the impact of a share of corporate and industrial (C&I) electricity consumers participating in voluntary 24/7 CFE procurement, where a portfolio of carbon-free generation from within the same grid region is used to meet hourly electricity demand profiles of participating C&I consumers.

• We model impacts of 24/7 CFE procurement in two regional power systems: California and the PJM Interconnection. These two systems differ in patterns of electricity demand, weather, renewable resource quality, state policy, and existing generation capacity and help generalize the impacts of 24/7 CFE procurement.

• For comparison, we also model reference cases with no voluntary procurement and cases where the equivalent share of C&I consumers meet 100% of annual energy demand on a volumetric basis with renewable energy procurement (100% annual matching). This case assumes procured renewable energy is from within the same model region and is 100% additional to state RPS requirements.

We find:

24/7 carbon-free electricity (CFE) procurement: 

• Can eliminate carbon dioxide emissions associated with a buyer’s electricity consumption, going beyond the impact of procurement of renewable energy to meet 100% of annual volumetric demand.

• Can drive greater system-level emissions reductions than 100% annual matching if the CFE target is high enough.

• Drives early deployment of advanced, ‘clean firm’ generation and/or long-duration energy storage, creating initial markets for deployment, innovation, and cost-reductions that make it easier for societal at large to follow the path to 100% carbon-free electricity.

• Better matches participating demand during periods of limited supply and thus drives significantly more retirement of natural gas generating capacity than 100% annual matching.

• Comes at a more significant cost premium relative to 100% annual matching; this premium is significantly reduced if a full portfolio of clean firm resources is available and procured and/or CFE targets below 100% are selected.