Exploration of the next generation of green electricity procurement strategies : Evaluation of 24/7 carbon-free electricity and emissionality and their implications for carbon accounting

Abstract: Under the current climate emergency, the electricity industry is taking quick steps to introduce new technology and market processes that could contribute to the decarbonization of the power system. The creation of the energy attribute certificates more than two decades ago has allowed consumers to choose the origin of their electricity. This market instrument has provided a new tool for tracking carbon-free electricity. It is how corporates can reduce their market-based emissions under the Scope 2 Green House Gas Protocol, a practice called annual matching of certificates. However, there are new trends in green electricity procurement that intend to improve the current system. These are called 24/7 carbon-free electricity and emissionality. To bring added value, these new methodologies require more granularity, hourly or less, for both electricity market data and energy attribute certificates. This can be achieved with so-called granular certificates. This thesis intends to provide some answers to the implications at a corporate level, specifically for their carbon accounting exercises, of adopting these practices. Different industrial and commercial electricity consumer profiles are analyzed in several European countries for 2021 under four different scenarios: base, RE100, 24/7, and emissionality. The results show that using hourly grid carbon intensity, location-based emission can differ from annual calculations up to 7%. In addition, it exemplifies some of the inefficiencies of the current practice of yearly matching of certificates. In 2021, it required less than 1% of a company’s total electricity sourcing costs to certify that they are 100 % renewable, acquiring mainly unbundled certificates. For the case of bundled certificates linked to a specific technology, these costs increased to 2,60 % for the case of the Dutch wind. The 24/7 scenario shows the actual coverage of the renewable contracted sources after the implementation of 24/7 carbon-free electricity matching, ranging from values between 48% and 99 %, depending on the consumption profile, the location, and the contracted renewable sources portfolio. Finally, the emissionality scenario provides the tools to determine where to locate new renewable generation capacity to decrease the emissions as much as possible. The results show that, under specific circumstances, these values can be three times higher. This thesis promotes adopting 24/7 carbon-free electricity practices for attributional carbon accounting methodologies. Nevertheless, its definition should be reviewed to easily include emissionality studies when new carbon-free renewable capacity construction comes from corporations’ green procurement decisions.