In previous blogs, we’ve discussed the opportunity to implement Granular Accounting in the GHG Protocol and the benefits that can bring. In this final part of the blog series, we talk about feasibility – getting it done.
Granular Matching is Happening
Figure 1 – Millions of MWhs of Hourly Matching Are Happening Globally (Source: EnergyTag).
Granular matching is happening all over the world today. As shown in the EnergyTag Case Studies, over 30 organizations are already doing millions of MWh of hourly matching. This is technically possible. Some countries, such as Taiwan, require granular accounting already to make clean energy consumption claims. We should all learn from these models. Most of these projects are also implementing the EnergyTag Granular Certificate Standard to help ensure harmonization and transparency.
Software Makes Granularity Easy
Figure 2 – An hourly matching software platform (Source: Granular Energy).
Innovative software solutions make the consumer journey to granular accounting easy. For example, the solution shown above gives the customer a clear view of the granular matching of their portfolio in a simple dashboard, all the data complexity is dealt with “under the hood”. The advances in Big Data management and AI in recent years show we can now manage huge amounts of data while offering a simple user experience. It’s about time the tools consumers use to make the crucial choices about where their energy comes are brought into the digital age by leveraging best in class technologies.
Leading Companies are Already Doing Granular Reporting
Figure 3 – Hourly matching today (Source: Google).
Some of the world’s largest companies like Google and Microsoft have set goals to match 100% of their energy demand with hourly clean power by 2030. Google already reports its progress by region globally today in a demonstration of hourly transparency. This type of reporting should be made available to all consumers.
Markets for Granular Accounting Products are Already Here
Figure 4 – High Granularity PPAs Are Here (Source: EnergyTag 24/7 in Action Tracker).
It’s critical that clean power markets offer granular information to consumers, and that’s already happening. The next generation of PPA and power supply agreements are here. As shown above, suppliers are guaranteeing high (>80%) hourly matching of supply to consumer demand, locking in deep decarbonization and improving price hedging. And trading markets are emerging to enable short-term purchase of Granular Certificates, with Google and Microsoft teaming up with leading utilities to set up the world’s first GC trading marketplace, another key part of the granular accounting puzzle. And this is not only for big consumers. Good Energy, a leading green utility in the UK, is offering an hourly matched tariff to all of its business customers, no matter the size.
Hourly Matching Can Cost More, But Getting to 100% is a Journey
Many studies have examined the cost premium of high levels of hourly matching compared to 100% Annual Matching. For example, this study from TU Berlin provides detailed analysis of the cost premiums for various technology scenarios in 2025 and 2030 for Germany, Denmark, and Ireland. They draw a number of critical conclusions, that are replicated in other studies:
Figure 5 – Cost implications of hourly matching (Source: TU Berlin).
Cost premiums for very high levels of hourly matching exist, but will come down as new technologies emerge to supply power when renewables are not abundant. Nothing is stopping a consumer getting started actually measuring and accounting for emissions on a granular, hourly basis from today, with different consumers getting to 90 or even 100% depending on their ambition and limits.
But Value is What Matters, Hourly Matching Brings Hedging Benefits
Figure 6 – Hedging Benefits of Hourly Matching (Source: Eurelectric).
We’ve said this before in Part 3 of this series, and we will say it again, what really matters when thinking of long-term power purchase agreements is not just the price you pay upfront, but the value you get from hedging in the long run. That’s the true benefit, and it depends on the production profile of the PPA. A recent analysis by Eurelectric found significant hedging benefits of hybrid PPAs (Wind, Solar & Storage) with high levels (>80%) of hourly matching when looking at the German and Finland cases for 2020, 2021, 2022. Granular accounting gives consumer information about their emissions and their energy price risk.
Granular Accounting is Feasible, GHG Protocol is Key to Scale
Figure 7 – The UN’s 24/7 Compact now has 145 Signatories (Source: 24/7 Compact).
Granular accounting is eminently feasible, and is already happening at TWh scale. The momentum behind 24/7 is illustrated by the fast-growing number of signatories of the UN’s 24/7 Compact, including the recent addition of the US Federal Government, the world’s largest power buyer.
But, to leverage its full potential, it must become systemic and truly global. The adoption of Granular Accounting in the GHG Protocol is a golden opportunity to make it mainstream by requiring all consumers to go Granular as soon as is feasible in their region. As illustrated in this blog series, this would solve the issues of today’s loose accounting and deliver the system benefits and regulatory alignment so crucial to a Protocol that’s Net Zero aligned.
→ EnergyTag is working to ensure Granular Accounting is the cornerstone of an updated GHG Protocol.
Reach out at email@example.com to join our efforts!