Electricity System and Market Impacts of Time-based Attribute Trading and 24/7 Carbon-free Electricity Procurement

The next frontier in clean energy procurement is efforts to match a buyer's electricity demand, hour-by-hour, 24/7, with carbon-free electricity generation from within the same electricity grid region as the buyer's operations.

This is 24/7 carbon-free electricity (CFE) procurement.

Enabling vibrant markets for 24/7 carbon-free electricity procurement will depend on the implementation of time-based energy attribute certificates, or T-EACs, a new, hourly approach for verifying clean energy matching and a critical tool to enable the most cost-effective procurement of 24/7 CFE by all participating customers.

This is the first study to model T-EACs in a detailed electricity system optimization model and assess the impact and benefits of new markets for the exchange of T-EACs.

We find that T-EACs trading can lower the cost of 24/7 CFE procurement, especially for buyers who face limited options for direct procurement from carbon-free generators, create hourly price signals that incentivize deployment of clean energy at the times when the grid is dirtiest, and could help buyers and generators of carbon-free electricity hedge the impacts of uncertain demand and generation forecasts.

Additionally, the value of T-EACs trading increases as voluntary procurement goals approach 100% carbon-free electricity, which means T-EACs can help buyers meet the demand for ‘the last 10%’ of carbon-free generation needed to match their demand 24/7 at lower cost.

The study was supported by a grant from Google Inc.