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Integrating deliverability

into voluntary clean energy

market boundaries

Executive Summary

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AUTHORED BY

Singularity Energy
Gregory Miller, Ph.D.
Gailin Pease
Wenbo Shi, Ph.D.

WITH CONTRIBUTIONS FROM

The Brattle Group
Long Lam, Ph.D.
Kathleen Spees, Ph.D.
Jadon Grove
Ivy Yang

August 2023

Prepared for and supported by
Google LLC

Authorship notes: Singularity authored the report, including developing the framework, evaluation criteria, case study, and modeled evidence. The Brattle Group contributed subject-matter expertise on electricity systems and markets, and survey of procurement boundaries in standards and policies. The authors wish to acknowledge members of the Google climate team for thoughtful comments and inputs on earlier drafts of this report.

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Executive Summary

Background

The voluntary clean energy market continues to play a growing and essential role in grid decarbonization. Voluntary procurement by corporate buyers has accounted for over 68 GW of clean energy capacity added to the U.S. grid since 2014, and voluntary purchases comprised about 6% of U.S. retail electricity sales in 2021, growing at a rate of about 20% year over year.

Standards and initiatives such as the Greenhouse Gas (GHG) Protocol, CDP, and RE100 all broadly incentivize voluntary procurement and influence the specific types of procurement decisions that are made. In addition to encouraging procurement from specific types of energy technologies, these standards and initiatives also importantly define the geographic boundaries within which a buyer can procure energy to comply with the standard.

The extent to which the location of procured electricity matches the location where a buyer consumes electricity has an impact both on the credibility of an individual buyer’s claim to be consuming the clean energy it procures, and on the aggregate impact of the voluntary market on the long-term success of the energy transition and full grid decarbonization.

Given the important role that standards play in shaping where voluntary buyers procure energy and the degree to which their procurement contributes to grid decarbonization, it is critical that standards setters define procurement boundaries using a process that is structured, transparent, and grounded in the reality of how electricity markets and electric power systems function. Today, boundaries are often poorly defined, unclear in their rationale, and not reflective of power markets and operations. They are often interpreted inconsistently, resulting in double-counting and the weakening of voluntary demand signals.

This is particularly true for the GHG Protocol’s Scope 2 Guidance on market-based accounting. This accounting approach, which allows companies to use market-based instruments to calculate their emissions from consumed electricity, lacks clear or robust guidance on the geographic boundaries within which clean energy can be purchased in order to match consumption and reduce market-based scope 2 inventories.

Specific weaknesses of the current guidance include:

References