《国际能源署(IEA):通过清洁电力采购推进脱碳进程(英文版)(89页).pdf》由会员分享,可在线阅读,更多相关《国际能源署(IEA):通过清洁电力采购推进脱碳进程(英文版)(89页).pdf(89页珍藏版)》请在三个皮匠报告上搜索。
1、Advancing Decarbonisation Through Clean Electricity ProcurementThe IEA examines the full spectrum of energy issues including oil,gas and coal supply and demand,renewable energy technologies,electricity markets,energy efficiency,access to energy,demand side management and much more.Through its work,t
2、he IEA advocates policies that will enhance the reliability,affordability and sustainability of energy in its 31 member countries,11 association countries and beyond.This publication and any map included herein are without prejudice to the status of or sovereignty over any territory,to the delimitat
3、ion of international frontiers and boundaries and to the name of any territory,city or area.Source:IEA.International Energy Agency Website:www.iea.orgIEA member countries:AustraliaAustriaBelgiumCanadaCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembou
4、rgMexicoNetherlandsNew ZealandNorwayPolandPortugalSlovak RepublicSpainSwedenSwitzerlandRepublic of TrkiyeUnited KingdomUnited StatesThe European Commission also participates in the work of the IEAIEA association countries:ArgentinaBrazilChinaEgyptIndiaIndonesiaMoroccoSingaporeSouth AfricaThailandUkr
5、aineINTERNATIONAL ENERGYAGENCYAdvancing Decarbonisation through Clean Electricity Procurement Abstract PAGE|3 I EA.CC BY 4.0.Abstract The number of corporations announcing clean electricity pledges has increased substantially in recent years,with many companies setting specific goals to meet some or
6、 all of their electricity demand with clean supply.These goals can support new capacity in clean generation,helping to boost overall shares in power systems.Increasingly,clean electricity goals can be specified in different ways;this can have implications for the clean technologies procured,the amou
7、nt and location of procurement,and the resulting emissions reduction.In some regions,corporates have a range of options to choose from when purchasing clean electricity;in other regions,legal and regulatory barriers still constrain engagement in corporate procurement.This report examines the options
8、 available and the ways in which they contribute to decarbonisation and,ultimately,net zero electricity goals.Using the IEAs regional power system models for India and Indonesia,the report applies quantitative analysis to examine the implications of different procurement strategies for emissions red
9、uction,procurement costs and technology deployment.A key finding is that when companies set more granular goals such as matching their electricity demand hourly(rather than annually as has been the dominant practice)it can stimulate deployment of the wider portfolio of flexible technologies needed f
10、or net zero transitions in the power sector.The report aims to guide corporates in choosing impactful ways to procure clean electricity.It also highlights the roles of policy makers,regulators,system operators and network owners and operators in increasing the availability and impact of corporate pr
11、ocurement options.The final chapter offers targeted recommendations for different stakeholder groups.Advancing Decarbonisation through Clean Electricity Procurement Acknowledgements,contributors and credits PAGE|4 I EA.CC BY 4.0.Acknowledgements,contributors and credits The report was prepared by th
12、e International Energy Agency(IEA)with support from Google,with the objective of supporting electricity consumers in choosing impactful ways to procure clean electricity.The report was conducted under the guidance of Csar Alejandro Hernndez Alva,former Head of the IEA Renewables Integration and Secu
13、re Electricity(RISE)Unit.Keisuke Sadamori,Director of Energy Markets and Security at the IEA,provided expert comments and senior guidance.Valuable guidance was also given by Pablo Hevia-Koch,Acting Head of the RISE Unit.The report was led and co-ordinated by Zoe Hungerford.The main authors were Enri
14、que Gutierrez,Julia Guyon,Craig Hart,Zoe Hungerford(lead modeller)and Luis Lopez.The authors would like to thank the team at Google for their detailed and constructive feedback during presentations of interim findings and the peer review,led by Devon Swezey with valuable input from Mark Caine,Hallie
15、 Cramer,Brian Denvir and Sophie Ribas.We are also grateful for the expert guidance and review from IEA colleages:Heymi Bahar,Jonathan Coppel,Paolo Frankl,George Kamiya,Luca Lo Re,Hugo Salamanca and Jacques Warichet.We are grateful to the external experts for their insights and review:Nikky Avila(Fac
16、ebook);Rina Boehle-Zeller(Vestas);Giacomo Bravaccini(FlexiDAO);Tom Brown(Technical University of Berlin);Christina Christopoulos(Amazon);Rizky Fauzianto(Rocky Mountain Institute);Peter Freed(Facebook);Ashwin Gambir(Prayas);Tatsatom Goncalves(World Resources Institute);Joop Hazenberg(Re-Source Platfo
17、rm);Mariah Kennedy(Microsoft);Tarun Khanna(Hertie School);Deepak Krishnan(World Resources Institute);Randi Kristiansen(United Nations ESCAP);Rui Luo(Climate Works);Tirthankar Mandal(World Resources Institute);Gavin McCormick(WattTime);Jake Oster(Amazon);Henry Richardson(WattTime);Cecilia Tam(OECD);a
18、nd Fabby Tumiwa(Indonesia Solar Energy Association).The authors would like to thank Marilyn Smith for skilfully editing the manuscript and Therese Walsh,Astrid Dumond and Isabelle Nonain-Semelin from the IEA Communication and Digital Office for their support in producing and promoting this report.Th
19、e individuals and organisations that contributed to this study are not responsible for any opinions or judgments it contains.All errors and omissions are solely the responsibility of the IEA.Advancing Decarbonisation through Clean Electricity Procurement Table of contents PAGE|5 I EA.CC BY 4.0.Table
20、 of contents Executive summary.6 Corporate clean electricity goals.15 Introduction.15 Corporates in net zero transitions.16 Clean electricity goals.21 Procurement approaches.26 Options for corporate procurement.26 Impact of different procurement options.33 Procurement for smaller companies.39 Impact
21、 of electricity industry structure and regulatory frameworks on procurement options.43 Regional variations in procurement options.43 Recommendations.52 Emissions accounting.54 Power sector modelling.54 Emissions accounting methodology.55 Impacts of procurement on emissions.60 Steps to better account
22、 for emissions.63 Net zero transitions.66 Impacts of hourly goals.66 Achieving net zero.74 Detailed recommendations.75 Annexes.81 Modelling methodology.81 Calculation methodologies.84 Abbreviations and acronyms.86 Glossary.87 Advancing Decarbonisation through Clean Electricity Procurement Executive
23、summary PAGE|6 I EA.CC BY 4.0.Executive summary An increasing number of companies are looking to ensure and show that they are trying to help mitigate climate change and contribute to clean energy transitions.At the same time,more and more consumers want to choose products and services compatible wi
24、th sustainable development.In this context,almost 1 000 companies across different activity sectors have pledged some form of emissions reduction or climate neutrality goals.To achieve these goals,many companies have started defining targets to reduce or eliminate emissions arising from their electr
25、icity consumption by procuring electricity from clean sources.Number of companies with net zero targets(left)and Renewable Energy 100 pledges(right)by year and by sector IEA.CC BY 4.0.Note:RE100=the Renewable Energy 100 initiative.Source:IEA Analysis of Net Zero Tracker(accessed 28 September 2022),a
26、nd RE100(accessed 19 July 2022).This report aims to support consumers of all sizes in choosing impactful ways to procure clean electricity.To this end,it provides guidance not only to companies but also to key stakeholder groups policy makers,regulators,and system and network operators.Our analysis
27、shows that the way clean electricity goals are specified influences how clean energy procurement impacts power systems and actual emissions reduction.At present,most corporate clean electricity procurement is guided by accounting practices set out in the Greenhouse Gas Protocol.This guidance allows
28、companies to apply an emissions factor of zero to their electricity consumption in their greenhouse gas(GHG)emissions accounting by matching their demand with the purchase of clean generation on an annual basis,e.g.under the Renewable Energy 100(RE100)initiative.0 200 400 600on or before203020402050
29、after 2050Number of companiesNet zero targetsServices:ICTServices:FinanceServicesManufacturingChemicals and pharmaceuticalsCement and non-metallic mineralsConstructionMining and metalsFossil fuels and electricity0 200 400 600on or before203020402050RE100 pledgesAdvancing Decarbonisation through Clea
30、n Electricity Procurement Executive summary PAGE|7 I EA.CC BY 4.0.Emissions reduction goals based on annual electricity matching have underpinned the large rise in procurement activity in the last decade and can continue to drive increasing deployment of clean generation,particularly solar and wind,
31、for power systems in earlier phases of renewables integration.More recently,strategies that focus directly on emissions impacts and prioritise the most cost-effective emissions abatement are also gaining attention.However,goals based on annual matching of electricity or only targeting emissions do n
32、ot deliver all the technologies that will be needed as power systems decarbonise and reach higher renewables integration phases.Thus,companies seeking to lead net zero transitions are developing other strategies.One alternative aims to match the corporate demand profile on an hourly basis(or less)wi
33、th demand and generation both located within the same grid.This approach delivers more robust emissions reduction in high-renewables systems and drives deployment of a more diverse and flexible portfolio of clean technologies and solutions.The type of procurement that corporates undertake to meet th
34、eir goals also influences emissions reduction outcomes.Depending on the market,a number of options for clean electricity procurement are available:On-site or“behind-the-meter”(BTM)generation,in which corporates invest inclean electricity generation to meet their own demand.Energy attribute certifica
35、tes(EACs),which are tradeable credits that can includeattributes such as type and time of generation.Examples include RenewableEnergy Certificates(RECs)in the United States and Guarantees of Origin(GOs)in Europe,or the emerging,more granular,time-dependent energy attributecertificates(T-EACs).Power
36、purchase agreements(PPAs),which are long-term contracts between aconsumer and an electricity producer.The contracts can be physical(includingactual delivery of electricity to the consumer)or financial(as a price hedginginstrument).Green power products or green tariffs through which the corporate pro
37、cures cleanelectricity from a utility or a clean electricity supplier.This portfolio of clean electricity procurement options gives corporates flexibility to choose one that fits their needs and capabilities.However,there is a need to consider whether clean electricity procurement directly contribut
38、es to increased clean generation beyond what would be achieved through existing public policy targets and measures.This is referred to as“additionality”,and is easier to demonstrate for some forms of procurement,such as BTM generation or a PPA for a new plant.Advancing Decarbonisation through Clean
39、Electricity Procurement Executive summary PAGE|8 I EA.CC BY 4.0.To date,EAC schemes have been the dominant option for corporate procurement.The uptake of PPAs has risen sharply in the last decade as corporates seek to maximise the visibility and additionality of their procurement efforts.Global corp
40、orate power purchase agreements volumes by region,2008-2021 IEA.CC BY 4.0.Note:On-site PPAs excluded.Source:Bloomberg New Energy Finance(2022).Policy and regulation should maximise the availability of diverse procurement options The extent of electricity industry liberalisation has an important infl
41、uence on the possibilities for clean electricity procurement.Some power market structures allow for a great diversity of procurement options;others are more restricted.Green power products,for example,are technically possible within most electricity market structures while PPAs between generators an
42、d consumers typically require a greater degree of liberalisation.Across all types of power markets,whether fully integrated or fully liberalised,policy makers can take specific actions to foster the development of clean energy procurement.Introducing a licensing process that grants access to the ele
43、ctricity network and specifies which actors can interact with the incumbent utility can be important first steps(as shown in India,Indonesia and South Africa).In parallel,policy makers and regulators need to establish clear and transparent processes for cost calculations and allocate responsibilitie
44、s to ensure developers and consumers are able to place trust in the market.While the available mechanisms to enable clean electricity offerings to customers will vary from one power system to the next,policy makers,regulators and utilities should take action to maximise the accessibility of clean el
45、ectricity procurement options.For large consumers,liberalisation of generation and allowing consumers 0204060805202530352008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Cumulative volume(GW)Annual volume(GW)Asia PacificEuropeThe AmericasCumulativeAdvancing Decarbonisat
46、ion through Clean Electricity Procurement Executive summary PAGE|9 I EA.CC BY 4.0.to choose their electricity provider can stimulate the emergence of corporate PPAs,EAC schemes and green tariffs through retailers.For small consumers,policy makers can enable procurement by requiring utilities to deve
47、lop green power products and letting consumers choose among clean energy suppliers.Policy action should empower consumers with greater climate ambitions without reducing the obligations of other participants As noted above,ensuring that corporate procurement makes a real contribution to deploying mo
48、re clean generation(also referred to as additionality)is vital from both policy and corporate perspectives.To truly accelerate clean energy transitions,the most critical requirement is that voluntary procurement actually goes beyond existing government mandates and initiatives.If this criterion is m
49、et,all corporate clean electricity goals and all types of procurement can contribute to accelerating energy transitions.This can also add robustness to corporate claims of decarbonisation.For certificate schemes,this requires careful design to ensure that accounting and reporting mechanisms are comp
50、atible with government clean electricity targets and mandates.This implies the need for clear guidelines as to what should be reported as part of the countrys own policy-driven process and what is driven by individual corporate initiatives,as well as mechanisms to avoid different types of double cou
51、nting.This applies within clean electricity tracking and to the interaction between certificates and carbon credits.It is critical to avoid,for example,double issuance in which both a clean electricity certificate and a carbon credit are created for the same unit of generation and subsequently claim
52、ed by two separate actors.Regulators need to ensure clear allocation of system costs Annual matching goals,which focus on electricity and tend to be satisfied by variable renewable technologies,create a set of specific challenges.Companies using these strategies still rely on services that other gen
53、erators provide e.g.supplying capacity adequacy,balancing and stability,as well as use of the grid.This may imply costs for other actors providing them,such as generators and system and network operators,which must be recovered through consumer billing structures.If such costs are not allocated expl
54、icitly,the total costs may end up,by default,being passed to other grid users in an unfair manner.Alternatively,the system operator may have no mechanism to recover them and face solvency issues.Advancing Decarbonisation through Clean Electricity Procurement Executive summary PAGE|10 I EA.CC BY 4.0.
55、Regulators play a major role in ensuring a clear allocation of costs that support system operations and decarbonisation,and should therefore develop clear mechanisms to evaluate and allocate them.In systems where renewables deployment requires policy support,regulators should design remuneration mec
56、hanisms in a way that ensures that all parties contribute to reducing the impact on overall system costs and allow system operators to cover additional costs efficiently.A key consideration is that such mechanisms ensure support for clean electricity deployment without inadvertently passing costs to
57、 vulnerable consumers.Mechanisms should also recognise the contribution that flexible technologies provide to the system.We illustrate this in an IEA modelling case study for India and Indonesia in 2030 in which we evaluate system impacts for corporate generation based on different clean electricity
58、 goals.The modelling evaluates system costs and value in relation to impacts on fuel costs,operating costs(including startups and ramping),and estimated peak contribution.We find that the system value of annual matching portfolios is substantially below the cost to serve the corporate load with stan
59、dard grid supply.In contrast,hourly matching portfolios bring a much higher value,which may even exceed the costs for serving the corporate load.System costs and value contribution in India and Indonesia,2030 IEA.CC BY 4.0.Notes:CFE=carbon-free energy,SDS=Sustainable Development Scenario,APS=Announc
60、ed Pledges Scenario.The CFE 100 case is based on corporate portfolio built to fully meet corporate demand in every hour;the CFE 90 case uses a corporate portfolio that depends on imports in some hours but achieves a CFE score of 90 based on the methodology published by Google.Isolated dispatch refer
61、s to a case in which the corporate portfolio is operated only to match the corporate load profile.Optimised dispatch seeks to align optimisation of the corporate portfolio with that of the entire power system.Hourly strategies allow companies with higher ambition to help lead net zero transitions Cl
62、ean electricity goals based on matching clean generation to corporate demand on an annual basis have played an important role so far,driving procurement of 0 10 20 30 40 50 60Baseline costAnnualMonthlyHourly(CFE 90)Hourly(CFE 100)isolatedHourly(CFE 100)optimisedBaseline costAnnualMonthlyHourly(CFE 9
63、0)Hourly(CFE 100)isolatedHourly(CFE 100)optimisedIndiaIndonesiaCost/value to the system(USD/MWh)Operating costFuel costPeak costTotal valueAdvancing Decarbonisation through Clean Electricity Procurement Executive summary PAGE|11 I EA.CC BY 4.0.clean electricity mainly from solar and wind.These goals
64、 continue to provide value across the world in systems where the priority is adding clean electricity,particularly from variable renewables.Achieving net zero power sector transitions,however,will ultimately require a broader range of clean,flexible electricity supply and service options.Corporates
65、can take the lead in accelerating decarbonisation by setting more ambitious goals that can stimulate deployment for the full portfolio of clean dispatchable technologies.IEA modelling for India and Indonesia shows that hourly matching strategies(as compared to annual)lead to a more diverse technolog
66、y portfolio,including clean dispatchable generation and storage.Procurement portfolios and procurement cost for annual and hourly demand matching in India and Indonesia,2030 IEA.CC BY 4.0.Notes:CFE=carbon-free energy,SDS=Sustainable Development Scenario,APS=Announced Pledges Scenario.The CFE 100 cas
67、e is based on corporate portfolio built to fully meet corporate demand in every hour;the CFE 90 case uses a corporate portfolio that depends on imports in some hours but achieves a CFE score of 90 based on the methodology published by Google.Companies adopting hourly strategies should take a systems
68、 perspective to ensure power system efficiency Hourly matching strategies imply corporate generation closely matching corporate demand profiles.In principle,this does not consider the overall demand profile of the entire system.Such an approach could lead to investment decisions that overlook the fa
69、ct that large,interconnected power systems benefit from increased efficiency by aggregating load and sharing generation resources.To avoid the risk of inefficient investment,all procurement strategies should allow for interaction between the corporate generation and the power system,which includes e
70、xporting surplus generation to the rest of the system and utilising system services.One option to achieve this for hourly strategies is targeting hourly 0070800.00.10.20.30.40.50.60.7AnnualMonthlyHourly(CFE 90)Hourly(CFE100)AnnualMonthlyHourly(CFE 90)Hourly(CFE100)India,SDSIndonesia,APSAn
71、nualised total costs(USD/MWh)Installed capacity(MW/GWh load)CleandispatchableBatteryWindSolar PVCostsAdvancing Decarbonisation through Clean Electricity Procurement Executive summary PAGE|12 I EA.CC BY 4.0.matching at less than 100%in each hour.Relative to annual matching strategies,this approach st
72、imulates a much more diverse and flexible portfolio and provides a greater contribution to system services.In this case,the corporate remains dependent on the main system for peaking requirements and some balancing services,which helps to avoid inefficient overbuilding of the system.Trading of time-
73、based certificates(T-EACs)can also allow corporates to pursue hourly matching in a more cost-effective manner.Certificate trading allows corporates to trade surplus clean generation in specific hours,which effectively allows for aggregation of generation to meet different demand profiles.In this cas
74、e,it is essential to assess additionality and ensure the certificates for meeting 24/7 goals do not come from existing generation without increasing flexible supply.IEA modelling for India and Indonesia shows that,relative to an isolated dispatch matched to the company load profile,optimised dispatc
75、h of hourly matching portfolios reduces both system costs and emissions.Reduction in CO2 emissions using siloed and optimised dispatch in India and Indonesia,2030 IEA.CC BY 4.0.Notes:CFE=carbon-free energy,SDS=Sustainable Development Scenario,APS=Announced Pledges Scenario.Isolated dispatch refers t
76、o a case in which the corporate portfolio is operated only to match the corporate load profile.Optimised dispatch seeks to align optimisation of the corporate portfolio with that of the entire power system.The CFE 100 case is based on corporate portfolio built to fully meet corporate demand in every
77、 hour;the CFE 90 case uses a corporate portfolio that depends on imports in some hours but achieves a CFE score of 90 based on the methodology published by Google.Update emissions accounting approaches to better align calculated and actual emissions impact While reducing carbon emissions is an impor
78、tant objective of clean electricity procurement strategies,existing frameworks fail to fully consider all aspects that affect emissions.In particular,accounting frameworks based on matching electricity demand and supply on an annual basis create a risk of discrepancies 0 20 40 60 80 100 120 140Hourl
79、y(isolated)Hourly(CFE100,optimised)Hourly(CFE90,optimised)Hourly(isolated)Hourly(CFE100,optimised)Hourly(CFE90,optimised)India,SDSIndonesia,APSEmissions reduction(%)Advancing Decarbonisation through Clean Electricity Procurement Executive summary PAGE|13 I EA.CC BY 4.0.between attributed and actual
80、emissions reduction.While relatively fit-for-purpose in many power systems today,as power systems reach higher phases of renewables integration,these approaches will increasingly fall short.IEA modelling for India shows that corporate procurement based on annual electricity matching reduces company
81、emissions by 96%in 2020.However,as the share of renewables in the electricity mix increases,the same approach delivers only 89%emissions reduction by 2030 in the Sustainable Development Scenario.In a case with the share of variable renewables reaching 50%,the emissions reduction value falls to aroun
82、d 50%,reflecting increased curtailment of renewables in the rest of the system and the corporate generation mostly displacing gas(rather than coal)during hours of surplus.Emissions reduction resulting from corporate clean generation for annual matching strategies in India,2020 and 2030 IEA.CC BY 4.0
83、.Notes:Emissions reductions are measured as a percentage of emissions resulting from corporate electricity consumption.STEPS=Stated Policies Scenario,SDS=Sustainable Development Scenario.High VRE case consists of the SDS with additional renewables generation to bring the VRE share to 50%.Current acc
84、ounting practices for average annual emissions do not account for these effects.As such,under an annual average approach,all of these cases would appear to achieve 100%emissions reduction,while the actual impact of the interventions may be much lower.Such approaches may remain the most appropriate f
85、or attributing emissions across the entire system;however,they do not provide good guidance for the most impactful procurement decisions.Hourly average approaches can provide better information about the time at which demand response and clean generation bring the most value to the system.Even so,th
86、ey do not accurately capture how changes in load and generation actually impact emissions.Marginal impact methodologies that include a long-term perspective provide the most accurate way to understand the actual impacts of various interventions on the power sector.Such approaches are challenging to
87、10%20%30%40%50%60%0 20 40 60 80 100 STEPS2030 SDS2030 high VRE caseVariable renewables share(%)Emissions reduction(%)Advancing Decarbonisation through Clean Electricity Procurement Executive summary PAGE|14 I EA.CC BY 4.0.adopt as they require greater availability of data;power system mo
88、delling is required to determine most accurately the most effective deployment of clean electricity and demand response.Nonetheless,use of such methodologies should be increased wherever possible.Policy makers can support this by ensuring increased data availability and including guidance on optimal
89、 pathways for system development within planning studies.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|15 I EA.CC BY 4.0.Corporate clean electricity goals Introduction A growing number of companies are seeking to ensure and to show that they a
90、re taking efforts to mitigate climate change and contribute to clean energy transitions.In parallel,more consumers want to be able to choose products and services that are compatible with sustainable development.This context is prompting many companies to identify the sources of their emissions incl
91、uding from electricity consumption and take steps to reduce them.More broadly,electricity will underpin global net zero transitions.As shown in the IEAs Net Zero Emissions by 2050 Scenario,potential exists to decarbonise electricity relatively rapidly and,through electrification,to make it the vecto
92、r for decarbonising other harder-to-abate sectors.All consumers,whether corporates or individuals,should be able to choose clean electricity.Policy makers and regulators should take the lead role in ensuring that clean electricity options are available.In turn,the electricity industry structure and
93、the regulatory environment are critical to determine the range of options by which consumers can procure clean electricity.Recent years have seen a marked increase in the availability of clean electricity products in some geographies.Still,increased clarity is needed on the degree to which these pro
94、ducts truly increase clean electricity generation and important barriers remain to be addressed in many regions.Across the private sector,commercial and industrial consumers span a huge range of size and sophistication as electricity consumers,from small and medium enterprises(SMEs)up to global corp
95、orations.Their capabilities to participate in power sector transitions vary accordingly as do their needs.For small companies,sustainability initiatives may come in the form of selecting a green power product or installing rooftop solar panels.At the other extreme,large national and multi-national c
96、orporations may have dedicated teams working on electricity and may even have more expertise than some local electricity utilities.As such,they may have the capacity to directly negotiate PPAs to meet their own demand and the ability to take a leadership role in developing new clean electricity opti
97、ons that can be made available to other consumers.Decarbonisation is a joint effort that requires action across all levels of society.This report aims to support consumers of all sizes in choosing impactful,clean electricity options.To this end,it provides guidance not only to companies but also to
98、key stakeholder groups policy makers,regulators and system operators.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|16 I EA.CC BY 4.0.This first chapter gives an overview of the increase in corporate clean electricity goals and introduces the m
99、ain types of goals being adopted,including matching electricity consumption with clean electricity supply on an annual or hourly basis.The second chapter introduces the potential options by which corporates can procure clean electricity.It also explains the concept of“additionality”and examines vari
100、ous barriers faced by different types of consumers.The third chapter examines how the structure of the electricity industry influences corporate procurement and provides case studies highlighting positive development for new clean electricity procurement as well as some remaining barriers in selecte
101、d countries.To illustrate some of the technical considerations relevant to corporate procurement,the fourth and fifth chapters present the results of modelling exercises undertaken by the IEA for India and Indonesia.The fourth chapter focuses on the challenges of measuring emissions impacts while th
102、e fifth examines how different corporate procurement goals contribute to the broader net zero transition of the power sector.Finally,the last chapter provides a summary of key messages,organised by stakeholder group,based on the qualitative and quantitative analysis of the report.Corporates in net z
103、ero transitions Achieving net zero emissions requires a focus on reducing primary emissions To date,almost 1 000 companies across different activity sectors have pledged some form of emissions reduction or climate neutrality goals.Some 90%of them are located in advanced economies.Driven by several f
104、actors,such as corporate sustainability initiatives,customer demand for low-carbon products and services,brand positioning,or the desire to reduce commercial risk,companies are increasing their participation in solutions for the climate and for energy systems.Examples of initiatives that engage comp
105、anies include the Race to Zero campaign,the Net Zero initiative,Transform to Net Zero and the Climate Pledge.Many pledges target 2050,with a smaller share aiming at 2030 or 2040.At present,the services sector has the leading share on all horizons.Advancing Decarbonisation through Clean Electricity P
106、rocurement Corporate clean electricity goals PAGE|17 I EA.CC BY 4.0.Number of companies with net zero targets by year and by sector IEA.CC BY 4.0.Note:ICT=information and communications technology.Source:IEA Analysis of Net Zero Tracker(accessed 28 September 2022).Emitters have historically used car
107、bon credits1 purchased through carbon markets to support their emissions reduction and removal claims.With the aim of lowering the costs of mitigating climate change,carbon credit markets were created to provide economic efficiency and flexibility as to where and when greenhouse gas(GHG)emissions ar
108、e reduced or removed.Some markets provide flexibility to achieve emissions obligations at the international level,such as the Clean Development Mechanism(CDM),and some at sub-national levels,such as the California Compliance Offset mechanism.Others were created to allow companies and other actors to
109、 reduce their emissions on a voluntary basis and are connected with voluntary markets such as the American Carbon Registry,Gold Standard,Climate Action Reserve and Verra.2 However,there is increasing pressure for emitters to limit the reliance on carbon credits.The IEA-OECD Climate Change Expert Gro
110、up(CCXG)and other standards,such as the Science Based Targets Initiative(SBTi),propose that the role of carbon credits in achieving net zero should remain limited to a small share of emissions(e.g.5-10%according to SBTi),as emitters should focus on reducing their own emissions first.Energy conservat
111、ion and efficiency continue to be among the top priorities in this respect.In their early phases,carbon markets faced several implementation challenges leading to uncertain emissions impacts.Concerted effort has already been made to improve their efficacy in bringing about abatement.The Paris Agreem
112、ent and 1 Carbon credits correspond to verified metric tonnes(Mt)of carbon dioxide(CO)reduced or removed from the atmosphere.2 Some of the voluntary registries may allow trading with certificates in compliance markets,provided that they fulfil common standards.0 100 200 300 400 500 600On or before 2
113、03020402050After 2050Number of companiesFossil fuels and electricityMining and metalsConstructionCement and non-metallicmineralsChemicals and pharmaceuticalsManufacturingServices:otherServices:financeServices:ICTAdvancing Decarbonisation through Clean Electricity Procurement Corporate clean electric
114、ity goals PAGE|18 I EA.CC BY 4.0.its rulebook,for example,have much more stringent rules than previous international regimes,especially in terms of double counting of emissions reduction.Despite an agreement at COP26 on the broad rules of Article 6 of the Paris Agreement,which covers carbon credits,
115、negotiations on their implementation are still ongoing.Correctly implemented,carbon credits can be an important complement to other carbon abatement efforts.Clean electricity goals support primary emissions reduction initiatives In order to reduce primary emissions,companies have started defining mo
116、re targeted goals to mitigate emissions linked to their electricity consumption.Emissions reduction can take place across three main categories,based on the widely used accounting standard by the GHG Protocol:3 Scope 1:emissions occurring from sources that the organisation directly owns or controls.
117、This might include,for example,emissions from operating gas boilers in an industrial plant or from company vehicles.Scope 2:emissions associated with purchased electricity,4 steam or heat.An organisation may not have direct control aside from reducing consumption of purchased energy but can take ste
118、ps to influence such services.Scope 3:emissions associated with the companys upstream and downstream value chains.For an automotive manufacturer,for example,this encompasses emissions from its upstream materials suppliers and its downstream retailing activities.This report focuses on clean electrici
119、ty procurement,which falls mainly under Scope 2 emissions reduction efforts.Scope 3 is also relevant for electricity emissions across a companys supply chain but is not the focus of this report.A company installing on-site clean electricity generation(e.g.solar PV)to replace previous on-site fossil
120、fuel generation(e.g.diesel backup generators)could also overlap with Scope 1 boundaries.As renewables generation becomes increasingly cost-competitive and governments reduce or remove associated subsidies,engaging large private consumers to directly purchase renewable energy ensures market availabil
121、ity and helps reduce the risks for developers.At the same time,consumers can benefit 3 The GHG Protocol is an emissions accounting and reporting framework initiated by the World Resources Institute and World Business Council for Sustainable Development.ISO 14064 provides minimum standards for compli
122、ance in GHG accounting.4 Emissions from electricity could be accounted based on the emissions of the local grid from which electricity is consumed(location-based accounting)or on the emissions from the generators contracted to supply electricity(market-based accounting).More detail on this differenc
123、e is explained in the chapter on emissions accounting.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|19 I EA.CC BY 4.0.from the availability of cost-effective renewable resources that depending on the market and electricity procurement approach
124、 taken may also provide hedging from electricity market price risks.Corporates with more flexibility have potential for fast decarbonisation Companies and industries that rely on electricity for a major share of energy in their activities and who have flexible operations have high potentials for fas
125、t decarbonisation.For several key sectors such as manufacturing of machinery and transport equipment,aluminium smelting,and commercial and service activities(notably information and communications technology ICT)electricity already constitutes a major part of their direct energy use.Applying procure
126、ment strategies to leverage clean electricity generation can help these industries rapidly decarbonise a significant part of their emissions profile.Global energy use and share of electricity by sector,2019 IEA.CC BY 4.0.Note:ICT=information and communications technology.Sources:IEA Analysis of Worl
127、d Energy Balances 2022 and Data Centres and Data Transmission Networks In turn,flexibility in production processes can facilitate matching demand with the availability of variable renewables,whether installed on-site or procured from the electrical grid.Common sources of demand flexibility within di
128、fferent company activities include:Aluminium:scheduling flexible smelting processes.Data centres:moving computation activities to other territories,using cooling loadsas thermal storage or employing redundant batteries as electrical storage.Commercial buildings:shifting heating/cooling loads.Manufac
129、turing:identifying mechanised aspects that can be used for materialstorage.14%22%24%26%28%36%44%48%50%57%64%66%91%055Non-metallic mineralsIron and steelChemical and petrochemicalPaper,pulp and printingFood and tobaccoWood and wood productsMining and quarryingTextile and leatherCommercial
130、and public servicesTransport equipmentNon-ferrous metalsMachineryServices:ICTEJNon-electricityElectricityAdvancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|20 I EA.CC BY 4.0.Retail supermarkets:using the implicit thermal storage of refrigerators an
131、dfreezers to shift load.Transport and storage activities:scheduling charging loads of electric vehicles.Wastewater:time-shifting aeration,pumping and filter backwashing.Increasing electrification of sectors such as heating and transport,as well asincreased automation of processes that enables demand
132、 response,add to thepotential value of demand-side flexibility.Developing procurement strategies canprovide a valuable opportunity for companies to decarbonise while also supportingintegration of more clean energy sources in power systems.Commitments to remove historical emissions from the atmospher
133、e A significant portion of GHG emissions,such as CO2,linger in the atmosphere for 100 years or more,meaning their total volume accumulates over time.Past emissions substantially increase the risk of not achieving the Paris Agreements climate target.Currently,there is no widely accepted standard to a
134、ccount for historical emissions.Nonetheless,initiatives to remove historical emissions from the atmosphere can help with meeting climate targets and unlocking investment in carbon-negative projects.In January 2020,Microsoft announced a plan to be carbon-negative by 2030 and to remove its historical
135、carbon footprint going back to its foundation in 1975 by 2050.The plan covers Scopes 1,2 and 3 emissions and entails Microsoft both reducing its current emissions to net zero and funding carbon-negative projects such as direct air capture.Velux,a roof window manufacturer founded in 1941,also committ
136、ed to capture its historical emissions by 2041,covering Scope 1 and 2 emissions.It focuses on forest conservation projects in collaboration with the World Wildlife Foundation(WWF).Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|21 I EA.CC BY 4.0
137、.Clean electricity goals Emissions and system impacts depend on the type of goal In the attempt to reduce Scope 1 and 2 emissions,many companies have explored setting clean electricity goals to align with their energy purchases.These goals vary in their time span and procurement specifications and c
138、an lead to debates about the accuracy of emissions reduction claims.A major part of the debate stems from the fact that,in many cases,end-users do not directly consume the“clean electrons”they procure and,indeed,in interconnected power systems,it is impossible to differentiate which sources of elect
139、ricity are delivered to which consumers.As a result,clean electricity claims are largely based on contractual agreements.The companys strategy may involve purchasing clean electricity certificates or contractual supply of clean electricity produced in locations and time periods that differ from its
140、actual electricity demand.This may mean that actual corporate demand and contracted supply are physically balanced by electricity sources that are not clean.How clean electricity goals are defined plays an important role in the potential impact of corporate action on clean electricity procurement,wh
141、ich is the focus of this section.The impact also depends on the type of procurement undertaken e.g.purchasing certificates or PPAs which is addressed in the following chapter.Annually matched goals The most widespread practice today is for a company to procure an amount of clean electricity equal to
142、 its total annual consumption,either through supply contracts or certificates.This approach aligns with emissions accounting guidance in the GHG Protocol under what is termed a“market-based”approach.The Renewable Energy 100(RE100)initiative brings together a large group of companies aiming to use 10
143、0%renewable electricity by 2050 based on annual matching and now covers 380 terawatt hours(TWh)of electricity demand.Notably,at this scale,if it were a country this would place it just outside the top 10.Targets made by companies engaged to date show earlier timelines thanoverall corporate net zero
144、goals.This is consistent with the sectoral trajectories inthe IEA Net Zero by 2050 Scenario,in which the power sector decarbonises morerapidly than other parts of the economy.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|22 I EA.CC BY 4.0.Rene
145、wable Energy 100 targets around the world by decade and sector IEA.CC BY 4.0.Source:IEA Analysis of RE100(accessed 19 July 2022).Typically,companies aim to meet these goals by tapping into the lowest-cost renewable generation technologies,i.e.solar PV and wind power.Such strategies have underpinned
146、the large rise in corporate procurement in the last decade.These goals benefit from relative simplicity:by increasing demand for clean electricity,annual matching spurs greater investment in renewables that can displace fossil fuel-based power generation.Since it corresponds with currently available
147、 certificate schemes,annual matching of electricity is also highly accessible.This is the dominant avenue for procurement to date,however there can be large differences in the actual impact,depending on whether the certificates are linked to new or existing power facilities(discussed in the followin
148、g chapter).While having clear merits,annual matching can lead to discrepancies in the emissions that a company effectively reduces compared with those for which it is responsible,linked to the fact that solar and wind are variable and uncertain.In periods with low solar and wind output,the company c
149、onsumes more than its contracted generation,and thus relies on generation from the main grid which may come from fossil fuels.Conversely,when the contracted solar and wind produce more electricity than the company consumes,this surplus is accommodated by other generators in the grid having to reduce
150、 their production.Such changes may also imply other costs having to be borne by the rest of the system.(These issues are explored in detail in the chapters on emissions accounting and net zero transitions).Location of generation and demand is another aspect affecting emissions.Both emissions resulti
151、ng from demand and reduction resulting from procurement will 0 50 100 150 200 250 300On or before 203020402050Number of companiesMining and metalsConstructionCement and non-metallic mineralsChemicals and pharmaceuticalsManufacturingServices:otherServices:financeServices:ICTAdvancing Decarbonisation
152、through Clean Electricity Procurement Corporate clean electricity goals PAGE|23 I EA.CC BY 4.0.vary depending on the emissions level of the generation in the specific grid.Annual matching goals do not always specify that the electricity generation should occur in the same grids as the companys elect
153、ricity demand.RE100,for example,has a broad definition of market boundaries from which corporates can procure renewable electricity.This flexibility gives companies options to support renewables development even if their operations are located in regions where clean energy is scarce or the investmen
154、t environment for renewables is heavily restricted.It also allows them to support development where emissions reduction impact could be maximised or where they can benefit from lower emissions abatement costs.Overall,the performance level of annual matching goals in terms of emissions reduction impa
155、cts can vary considerably.They could lead to large emissions reduction in the system,or it could be far below what companies may expect.This will depend on the specific systems in which consumption and procurement take place and the procurement approaches used.Tracking such variations requires a dir
156、ect assessment of emissions impact.Hourly matched goals within the same grid The leading alternatives to annual matching attempt to address continued dependency on fossil-fuel based grid generation by matching the corporate demand profile in real time,within the same grid where the demand occurs.Thi
157、s involves accurate metering of a companys hourly consumption and a trading and communications platform that can allow precise matching with clean electricity.Relevant initiatives include 24/7 Renewable Energy Sourcing(RES),24/7 carbon-free energy(CFE),a goal first announced by Google and now an aim
158、 of many organisations under the UN 24/7 CFE Compact,and Microsofts 100/100/0 pledge.These approaches have potential to address the criticisms raised for annual matching goals.Since clean generation equal to the companys demand is injected into the same grid in every hour,in principle these approach
159、es should effectively reduce 100%of its electricity emissions,if contracting zero-emissions sources.Importantly,as achieving hourly matching requires more control over generation and demand,these goals guide corporates to procure more diverse and flexible clean technologies and solutions.In turn,thi
160、s will help to ensure that the grid is flexible enough to integrate the variable renewables procured and,thus,that the corporate generation does not drive increased curtailment.As a result,corporates adopting these strategies provide a more comprehensive contribution to bringing power systems along
161、the net zero transition and can lead the way in developing the technologies needed.This is explored in detail in the chapter on net zero transitions.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|24 I EA.CC BY 4.0.Hourly matched goals pose chal
162、lenges that may be easier for certain sectors to overcome than for others.Load flexibility becomes a major advantage as some demand e.g.data centres,commercial refrigerators and metal smelters has some ability to decouple energy use from typical production or service schedules.Sophisticated tools fo
163、r forecasting also provide an advantage:companies that can forecast energy use and production can invest in technologies for load shifting or storage that help maximise profits and/or emissions reduction.Hourly matched goals would require changes in regulatory frameworks(discussed in the third chapt
164、er).Intermediate approaches Many options exist in between annual and hourly electricity matching.Simply accounting on intermediate time periods(e.g.daily,weekly or monthly)is one possibility.Another is applying the more granular hourly approach but with some tolerance for deviating from perfect bala
165、ncing in every hour.Deciding on the right level of tolerance is complex:companies should ensure that meeting the goal does require flexible generation and should be guided by an explicit evaluation of emissions impact(discussed in the next section).Googles 24/7 CFE approach provides an example of th
166、is:its methodology calculates a“CFE score”out of 100 based on the amount of clean generation consumed in every hour.A score of 100 corresponds with 100%clean consumption.The CFE score in each hour depends on the share of corporate demand matched by the companys own clean generation.In hours when the
167、 company produces less than its own demand,or effectively“imports”from the grid,the score is adjusted based on the share of clean electricity in the grid mix in that hour.For example,if,in a certain hour,the company produces 80%of its own energy from clean sources,the base score would be 80.The scor
168、e for the remaining 20%of demand would be assessed based on the grid mix in that hour.If the grid mix is 50%clean,this implies another 10%of clean electricity and would give the company a score of 90 for that hour.The annual score is then the load-weighted average of all hourly scores.Under this met
169、hodology,the score in any hour cannot exceed 100.As a result,to raise the annual score it is necessary to reduce the volume of grid“imports”(or increase the share of clean electricity on the main grid)in hours where local clean energy is not available,rather than increase excess generation in hours
170、when generation already matches consumption.Targeting a score below 100,such as CFE 90,would still require the company to exercise a higher degree of control over the timing of its generation and/or demand,but without needing to fully independently match its own profile.This type of approach may hav
171、e some advantages,but the outcome will be highly sensitive to the score targeted.This topic is explored in the chapter on net zero transitions.Advancing Decarbonisation through Clean Electricity Procurement Corporate clean electricity goals PAGE|25 I EA.CC BY 4.0.Emissions-based approaches The strat
172、egies discussed so far do not explicitly target emissions reduction as the first priority and,depending on how precise matching is in time and place,potential remains for discrepancies in emissions caused and reduced.In principle,targeting emissions reduction directly can allow for more cost-effecti
173、ve solutions to reduce emissions.Yet a number of complexities arise when the focus is on emissions reduction in isolation.A first challenge is to account accurately for the volume of electricity emissions a company is responsible for and reducing.Second,in the case that there is no direct physical l
174、ink with consumption,it is difficult to show that real emissions reductions are being achieved(discussed in the following chapter).Finally,there is an element of financial complexity:if procurement takes place in different markets from the companys electricity demand,price hedging is not directly ac
175、hieved.Despite these complexities,since emissions reduction is a central objective of corporate net zero strategies,quantifying emissions impacts and being guided by this information is a way for companies to improve their decision making and ensure that they achieve the underlying aims of their cle
176、an electricity procurement goals.Emissions-based approaches could be followed directly or could also be pursued as a complement to the other types of clean electricity goals described above.Noting that projects in different locations and in different systems can result in different emissions impacts
177、,various organisations are working together to better measure the real-world impact of different interventions on emissions reduction.An interesting example of such joint effort is WattTime,which has developed a methodology to estimate the marginal impact of different renewables projects.They are wo
178、rking with other actors to develop a standardised framework that better incorporates global emissions reduction into current emissions accounting frameworks.Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|26 I EA.CC BY 4.0.Procurement approaches Companies
179、can undertake procurement of clean electricity through diverse approaches that differ in terms of ease of access,timing(both length of commitment and granularity of the clean electricity provided),and whether a direct connection exists with the physical flow of electricity.While this range of option
180、s can make it easier for corporates to find a clean electricity procurement option that fits their needs,they do not all have the same level of“additionality”i.e.it is not always clear to what extent they result in increased clean electricity.Also,some options are not easy for smaller companies to a
181、ccess or implement.Availability of the options also differs by region and the regulatory environment(discussed in the following chapter).Policy makers should ensure that regulatory and legal frameworks incentivise and make clean electricity procurement accessible to the largest array of consumers po
182、ssible,and that corporates have the opportunity to take action that actually adds to existing government commitments.Options for corporate procurement The options to procure clean electricity vary in terms of location and the stakeholders involved.The locational aspect reflects whether electricity i
183、s generated on-or off-site and within or external to the grid in which the consumer operates.Broadly,these options can be classified into four main types:On-site options,or“behind-the-meter”(BTM)assets are installed in the same location as the corporate load.Energy attribute certificates(EACs),or th
184、e emerging,more granular,time-dependent energy attribute certificates(T-EACs),allow corporates to buy certificates(not electricity)that correspond to the amount of electricity they consume over a specific period(usually yearly for EACs but hourly for T-EACs).Examples of EACs include Renewable Energy
185、 Certificates(RECs)in the United States and Guarantees of Origin(GOs)in European markets.Power purchase agreements(PPAs)are long-term contracts signed between a consumer and an electricity producer.They provide the supplier with secure revenue that can support build-out or extend operation of a plan
186、t.Different types of PPAs exist,with the two main categories being physical and financial(also called virtual).Green tariffs and green power products are contracts under which the corporate procures clean electricity through a utility or a clean electricity supplier.Uptake of clean electricity procu
187、rement options is evolving with time and corporate objectives,and levels of engagement and preferred options vary from region to region.In the United States,for example,RECs retain the highest share of total clean electricity sales(45%in 2020)but the share of PPAs increased from 4%in Advancing Decar
188、bonisation through Clean Electricity Procurement Procurement approaches PAGE|27 I EA.CC BY 4.0.2010 to 27%in 2020.Greater efforts,on the part of corporates,to clearly demonstrate that procurement strategies contribute to new renewable electricity capacity is one of the reasons for this increase.Clea
189、n electricity sales by type in the United States,2010-2020 IEA.CC BY 4.0.Notes:Community choice aggregation is a type of procurement in which small electricity consumers aggregate their demand to procure their electricity from a local government supplier with a green power product.REC=Renewable Ener
190、gy Certificate.Source:IEA based on data from NREL(2020),US Voluntary Green Power Market 2020 Many parameters influence the choice for one or another option,such as the size of the corporate,ease(or difficulty)of accounting,geographical availability,and availability of land(for BTM options).The corpo
191、rates engagement towards proving actual decarbonisation impact also comes into play.These parameters are summarised in the table below and described more fully in the following sections.Benefits and limitations of corporate procurement options Clean electricity procurement option Benefits Limitation
192、s On-site or behind-the-meter(BTM)High visibility for the end-consumer as installed on-site Clear additionality claims No added transmission and distribution,and grid costs associated with procurement Reduces volume of needed electricity purchases Up-front investment costs(if installed by the corpor
193、ate)Scale limitation(may not cover total electricity demand,particularly for solar PV and wind)Requires careful allocation of system costs Energy attribute certificates(EACs)Easy to implement,especially when unbundled No long-term commitment Unclear additionality No direct visibility(information add
194、ed in T-EACs can improve this)May not cover all clean dispatchable technologies 0 20 40 60 80 100 120 140 160 180 2002001620182020Sales(TWh)PowerpurchaseagreementsCommunitychoiceaggregationUnbundledRECsGreen tariffsGreen powerproductsAdvancing Decarbonisation through Clean Electricity Pro
195、curement Procurement approaches PAGE|28 I EA.CC BY 4.0.Clean electricity procurement option Benefits Limitations Time-dependent energy attribute certificates(T-EACs)Stronger reflection of time-value of generation Can be used to verify 24/7 matching Higher granularity increases transparency Volume of
196、 data to store Standardisation needs Ensuring EAC and T-EAC complementarity Power purchase agreements(PPAs)Electricity price certainty More control over additionality claims Supports long-term planning for buyer and seller May require long-term commitment Creditworthiness needed(difficult for smalle
197、r corporations)Accounting challenges(esp.for financial PPAs)Green tariffs and green power products Easy to implement(utility contract)Accessible to all sizes of corporates(burden shifted away from consumers)No long-term commitment No control on price in the long term No direct visibility Unclear add
198、itionality Design-dependent(accounting issues)Note:T&D=transmission and distribution.Sources:IEA analysis based on Douglas,B.et.al.(2020),Introduction to Corporate Sourcing of Renewable Electricity in Europe;ENTSO-E(2022),Views on a Future-Proof Market Design for Guarantees of Origin;Espinoza,T.(202
199、2),Four key accounting questions when considering a renewable energy PPA in Europe,3Degrees(22 December);European Commission(2019);John,J.(2022),Can 24/7 carbon-free energy become a global standard?,Canary Media(31 March);Texier,M.(2021),A timely new approach to certifying clean energy;Serrurier,B.(
200、2020),Introduction to Renewable Energy Certificates(RECs);Wills,T.(2020),Corporate Procurement of Renewable Energy:Implications and Considerations.On-site generation reduces grid electricity consumption with clear additionality Electricity generation on site is also referred to as“behind-the-meter”(
201、BTM).This option requires sufficient resources(e.g.solar irradiance,wind speed or biomass)and space at the corporates facilities.Utility requirements such as the hosting capability must also be met.The installation can be owned by the corporate or leased,in which case the corporate rents its land to
202、 a clean electricity developer through a leasing agreement or an on-site PPA.BTM installations offer the benefit of high visibility:clean generation installed on-site is a tangible asset that customers visiting the premises can see directly.In addition,on-site generation directly lowers consumption
203、of electricity from the grid,thereby reducing associated power bills.It does,however,require up-front investment costs on the part of the corporate.A recent survey highlights scale limitations of 740 companies producing on-site electricity nearly 400(54%)reported producing less than 1%of their deman
204、d on site.Policy makers need to design billing arrangements carefully to account for the impact of BTM installations on the power system.Electricity injected into the grid when the availability of low-carbon electricity is high may have a different value Advancing Decarbonisation through Clean Elect
205、ricity Procurement Procurement approaches PAGE|29 I EA.CC BY 4.0.than electricity consumed from the grid during times of high demand but low availability of clean electricity.For options,such as net-metering schemes,that allow electricity consumed in one period to be offset with electricity injected
206、 in other hours,policy makers should ensure system costs are accounted for and allocated clearly.This is illustrated in the chapter on net zero transitions.Energy attribute certificates represent a major share of global clean electricity procurement Buying EACs is the most widely adopted form of pro
207、curement.These certificates are created for each unit of renewable electricity generated(usually a megawatt hour MWh)and contain information on the time of production(usually at monthly or yearly granularity)and the generator(location and technology,as well as age).Once created,EACs are traded on on
208、e of several markets that exist around the world,the main ones being the North American Renewable Energy Certificate(REC)market,the European Guarantees of Origin(GO)market,the Chinese Green Electricity Certificates(GEC)and the International REC Standard (I-REC).EACs can be purchased together with th
209、e electricity from the clean generator,e.g.packaged with a PPA,in which case they are called“bundled”.Alternatively,they can be purchased separately,referred to as“unbundled”certificates.Buying unbundled EACs is an accessible option to meet clean electricity targets as they allow the buyer to claim
210、the environmental benefits of a given amount of clean electricity without engaging in a PPA.For example,the popular RE100 initiative considers unbundled renewable EACs sufficient to meet a 100%renewables goal,although the company does not directly purchase the electricity from the renewable power pl
211、ants.Once an EAC has been claimed,it needs to be retired to ensure it is only used once.Unbundled EACs do face a major challenge,however,in terms of their actual contribution towards decarbonisation,which,depending on allocation rules,can be unclear this is discussed in the section on impact of diff
212、erent procurement options.Another issue arises when EACs do not account for grid losses for example,the EU Concerted Action on the Renewable Energy Sources Directive proposes to solve this issue in the European Union by cancelling an amount of EACs equivalent to the incurred losses.The use of EACs f
213、or hourly matching strategies would require finer time granularity than that available in existing schemes.With a growing number of corporates and initiatives considering hourly matching goals,interest is also increasing regarding time-dependent energy attribute certificates(T-EACs),with a granulari
214、ty closer to real time(hourly or on 15-minute basis as suggested in a recent paper by ENTSO-E).The advantages of increasing EAC granularity include better accounting for the variability of renewable electricity generation,greater transparency,and a better reflection of the market value of consumptio
215、n and Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|30 I EA.CC BY 4.0.production of electricity in specific time periods.Granular certificates are also a strong facilitator for tracking electricity used to produce clean hydrogen,a subsector in which the
216、origin of electricity will be crucially important.Challenges remain on the logistical side,however,as higher granularity entails a much larger number of certificates and data to be stored,validated and checked.Consistency and uniqueness of the data would also have to be ensured through standardisati
217、on,and how T-EACs and EACs can co-exist needs to be verified,including ways to ensure that T-EAC purchases actually support increased clean flexible generation.The availability of granular generation and consumption data is crucial for deployment of T-EACs and 24/7 procurement strategies.Hence,a fir
218、st step towards developing such solutions is for policy makers to ensure easy access to transparent and granular data on electricity generation mixes.To enable consumers to track their own consumption,policy makers should facilitate the use of digital technologies while protecting data privacy.Corpo
219、rate power purchase agreements are on the rise Procurement through PPAs,in which a corporate signs a contract directly with a power producer,is growing quickly worldwide.Different types of PPAs exist,with the two main categories being physical and financial(or virtual).Global corporate power purchas
220、e agreements volumes by region,2008-2021 IEA.CC BY 4.0.Note:On-site PPAs excluded.Source:Bloomberg New Energy Finance(2022).Under a physical PPA,the consumer buys electricity directly from the producer,typically together with any corresponding EACs.As such,a physical PPA requires the contractual par
221、ties to be in the same grid and bidding area.One aspect to consider in physical PPAs is that,because the corporate is procuring electricity directly,they will have to communicate their production and consumption to the 0204060805202530352008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
222、18 2019 2020 2021Cumulative volume(GW)Annual volume(GW)Asia PacificEuropeThe AmericasCumulativeAdvancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|31 I EA.CC BY 4.0.system operator.This task may add complexity and is often outsourced to third parties.From a sy
223、stem perspective,it is important to note that physical PPAs can add inflexibilities to the grid.One example is when the terms of the contract hinder system-friendly behaviour,e.g.by prohibiting the use of voluntary curtailment.Financial or virtual PPAs do not require a physical connection between th
224、e generator and the consumer.A key advantage is that the contracting parties can be located and/or operating on different grids and even in different countries(called a cross-border PPA).Compared to financial PPAs in the same electricity market,cross-border PPAs bring additional financial risks,part
225、icularly in relation to possible differences in pricing between the markets in the different regions.The pricing structure of a virtual PPA is a contract for difference,in which a price is agreed contractually.When the wholesale market price is higher,the generator will reimburse the consumer;when t
226、he market price is lower,the consumer will reimburse the generator.Physical and financial power purchase agreements flows IEA.CC BY 4.0.Notes:PPA=Power Purchase Agreement,EAC=Energy Attribute Certificate.Sources:IEA based on Douglas,B.et.al.(2020),Introduction to Corporate Sourcing of Renewable Elec
227、tricity in Europe and KYOS Energy Consulting(2022),What is the difference between a virtual and physical PPA?.PPAs offer several advantages to each party.For the corporate,engaging in a PPA can reduce the amount of electricity purchased at market prices,allowing for long-term price certainty.In the
228、case of a newly-built plant,it also clearly demonstrates the positive impact of the procurement.For renewable developers,Financial flowCertificates(EACs)ElectricityRenewable generatorRenewable generatorWholesale marketElectricity supplierElectricity supplierConsumerConsumerPhysical PPAFinancial PPAA
229、dvancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|32 I EA.CC BY 4.0.PPAs bring the revenue certainty needed to secure investment in the plant.However,as will be discussed in more detail below,establishing PPAs can be challenging due to a lack of knowledge of
230、financial products in corporations as well as added layers of complexity coming from legislations and regulatory frameworks.Depending on the context and market structure,PPAs can be a more complicated procurement option.While PPAs can technically be contracted for different time scales,many PPA cont
231、racts for new plants require the corporate consumer to enter into a long-term contract,which is often not possible for smaller businesses.This can potentially be addressed by companies forming consortia to purchase together,discussed at the end of this chapter.Green tariffs and green power products
232、can be the simplest option where available Another option by which corporates can procure clean electricity is through offers from retailers and local utilities,who in turn contract PPAs with clean electricity generators or procure EACs.Under this structure,two main possibilities exist for corporate
233、s:green power products or green pricing programmes and green tariffs.In the first option,green power products or green pricing programmes,corporates contract with a retailer or a utility,paying a cost premium to receive unbundled EACs.This implies that the electricity received does not originate fro
234、m a designated project.A key advantage of such products is that they require only a short-term commitment and offer greater flexibility,making them more accessible for all sizes and types of consumers.The adoption of such programmes has been very successful in many economies in Europe.In other count
235、ries,such as India,the added premium acted as a barrier and many consumers preferred to invest in options such as BTM renewables.Since they are based on unbundled EACs,green power products face similar challenges in relation to their contribution to decarbonisation(discussed in the next section).The
236、 second option,procuring electricity through green tariffs,allows the consumer to purchase both the electricity and the EACs from a specific project,via a contract signed with a local utility.This contract can be specific to one company,i.e.negotiated between the corporation and the utility or suppl
237、ier,or a generic offering established by the utility which its customers can select.In both cases,the supplier matches clean electricity purchases with the electricity consumption of the corporate,which also receives the bundled EACs.This is usually at monthly or annual time granularity but,with inc
238、reased interest from corporates,it could evolve towards hourly matching schemes.Green tariffs are typically established via three main models:the subscriber model,the sleeved PPA and the market-based rate model.All involve the corporate contracting with the utility,but they vary in terms of utilitys
239、 role and their availability Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|33 I EA.CC BY 4.0.to different consumers.Depending on the model,such a tariff can be more or less accessible to smaller corporates.In the United States,for example,the Clean Energ
240、y Buyers Association observed that the subscriber model is usually available for smaller corporates that aggregate with others to have at least 1 MW.In contrast,a sleeved PPA model usually requires a minimum load of 1 to 10 MW and a market-based rate model is reserved for corporates with peak demand
241、 of minimum 5 MW.Impact of different procurement options Not every option delivers the same added value to increase clean electricity generation As noted above,decarbonisation requires joint effort.From a policy planning perspective,it is important to ensure that corporate clean electricity procurem
242、ent provides a real contribution to increasing clean generation.From a corporates perspective,being able to show that their procurement action has contributed directly towards power system decarbonisation is a clear visibility advantage.Central to both perspectives is the concept of“additionality”i.
243、e.that efforts are truly“adding”to the production of clean electricity.The underlying principle is a question of causation i.e.determining whether the procurement activity leads to more clean electricity in the power system,either by adding new capacity or extending the lifetime or operations of exi
244、sting plants and,consequently,a real reduction in emissions.Given the relevance of this question to whether corporate activity contributes meaningfully to enable energy transitions and help mitigate climate change,policy makers,regulators and corporates seeking to act responsibly should all apply so
245、me basic principles of additionality.Being able to effectively track the origin of renewable electricity will,moreover,be of growing importance in the context of increased electrification of end-uses and use of electricity to produce renewable fuels of non-biological origin,such as hydrogen.Assessin
246、g additionality in the context of corporate procurement is complicated by the fact that there is no single,agreed definition.Since corporate clean electricity goals are voluntary,the extent to which a company pursues additionality,and the definition applied,is often a matter of individual preference
247、.This is also reflected in initiatives such as RE100,which does not impose any strict additionality requirement on its members,although it does provide some guidance on making credible claims.Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|34 I EA.CC BY 4.
248、0.A similar issue is seen in the domain of carbon credits,which commonly applies two main concepts to identify whether credits deliver real carbon reductions:regulatory and financial additionality.By this definition,to be able to claim the additionality of a carbon credits project,entities need to s
249、how that the project is not already mandated by law and that it would not have existed without carbon credits providing the price signal.A nascent definition under the Paris Agreement is adding the relation to nationally determined contributions(NDCs)as another component of additionality,such that p
250、roject proponents would need to justify that their project is not part of NDC-related country efforts.Similar aspects can be considered for electricity procurement.First,whether corporate procurement adds to existing government targets and the schemes to achieve them.Second,whether the procurement p
251、rovides financing for deployment that otherwise would not be cost-effective or for which investment would not take place.For the efficacy of corporate procurement and the validity of corporate green claims,the relationship with other government targets is critical.As such,policy makers need to ensur
252、e that overall clean electricity deployment targets include provisions that allow all consumers with high climate ambitions to go beyond stated targets in terms of both quantity and timing of the deployment without reducing the obligations of other participants.In the absence of such provisions,the
253、efficacy of clean procurement choices is undermined.An example of this is seen in in the United Kingdom.At present,the majority of the renewable electricity generated is covered by government schemes and green pricing schemes simply re-allocate this generation to consumers who opt in.An analysis by
254、Ofgem showed that only three of several hundred green offerings actually contributed to adding renewable generation to the system.Such a situation can be avoided by designing government obligation-based schemes to ensure that all consumers must receive a minimum allocation.In this case,entities or t
255、ariff offers seeking to claim“100%”renewables would need to procure additional clean electricity since the mandated minimum has to be allocated to other consumers.In regions where decarbonisation objectives are mandated directly through carbon reductions,without electricity-specific obligations,addr
256、essing this issue requires either ensuring that electricity emissions reductions are tracked directly through carbon credits or introducing electricity-specific mandates.Related to this,policy planning should seek to better define and assess the ways in which renewable electricity targets set by the
257、 government interact with clean electricity procurement by corporates.Where levels of ambition differ,the attribution of renewable deployment to government targets or corporate goals needs to be transparent and should not be misleading to a general audience.The Advancing Decarbonisation through Clea
258、n Electricity Procurement Procurement approaches PAGE|35 I EA.CC BY 4.0.entirety of a corporate“100%renewable”pledge,for example,should not be counted towards a government target of“20%renewables”for the entire electricity system.At the same time,policy makers should consider policy support mechanis
259、ms that foster higher levels of ambition in corporate procurement.Again,this simply needs to be transparently separated from broader decarbonisation obligations or targets.Situations in which procurement takes place across borders are another point to consider in terms of additionality with respect
260、to targets at different levels.Policy makers need to build mechanisms into renewables deployment tracking to ensure that clean electricity is not being claimed twice and in relation to two separate targets:e.g.towards government targets in one country and,in another country,towards voluntary goals t
261、hat go beyond mandatory targets.An approach could be applied similar to the corresponding adjustment introduced under the Paris Agreement to ensure carbon credits are not applied to two different national targets.Financial additionality,or the question of whether procurement is providing financing t
262、o a project that would otherwise not occur,is a complex topic in the context of corporate procurement and the most difficult to prove.In a strict sense,financial additionality may not be necessary.For systems in which renewable electricity is actually the lowest-cost option,this does not imply that
263、corporate procurement should not count towards deployment targets,rather that the pace and level of ambition of these targets should be increased.However,some important principles should be applied in such situations.Fair attribution of system costs is a key consideration.In some cases,corporates ma
264、y be able to lower their electricity costs through renewables procurement only as a result of tariff arrangements or wheeling agreements that pass integration costs and the cost of other system services to other consumers.This is particularly relevant for BTM generation or PPAs under wheeling agreem
265、ents.Country examples for this are given in the next chapter and this issue is illustrated quantitatively in the net zero transitions chapter.Here,the essential point is for regulators to ensure fair distribution of system costs.There is no problem if renewables procurement is genuinely the cheapest
266、 option,but regulators need to ensure it does not result from unfair distribution of system charges.Conversely,intentionally subsidising system charges as a support mechanism for renewables is an acceptable practice,but policy makers should ensure such subsidies are explicitly defined.In this case,c
267、orporates should transparently acknowledge the role of such support in their procurement activities.As per the first point,if such procurement is used to claim meeting goals above the level of government ambition,it needs to be explicitly separated from main government targets in accounting.Advancin
268、g Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|36 I EA.CC BY 4.0.The question of financial additionality is commonly raised in relation to EACs,as in practice today they may provide a negligible part of project financing for new plants.They may also be attached t
269、o existing projects:in France,for example,most unbundled EACs are linked to hydropower plants i.e.old assets that are entirely financed already and would thus operate regardless of the procurement of their EACs.At the same time,it can be argued that EACs for existing plants also play a useful role.T
270、hey may,for example,provide renewable electricity suppliers with an additional revenue stream that could(depending on the pricing level of EACs)provide some support to installations for which subsidies have run out.In principle,if the EAC market brings reliable value to existing plants,this expected
271、 revenue stream could also help secure financing for new plants.EACs are also an important mechanism in that they may be the only option for some smaller buyers that do not have access to green tariffs and lack the profile to enter into a long-term PPA.Concerns about financial additionality for EACs
272、 should be addressed based on the same principles discussed above for clear allocation of clean generation to targets.If well designed,EACs and T-EACs can provide a useful mechanism to minimise the costs of decarbonisation and track clean electricity.Provided policy makers ensure that EACs allocated
273、 to government targets need to be retired,then additional EACs will be needed to meet more ambitious voluntary goals.In the future,unbundled EACs will be an essential tool to track the origin of electricity used to produce hydrogen.With this in mind,rules defining the conditions under which hydrogen
274、 can qualify as renewable especially with respect to additionality and time and locational constraints are central to current debates on the European Renewable Energy Directive.Facilitating the trade of granular certificates(such as T-EACs)while ensuring transparency of the location and time of gene
275、ration can increase the economic efficiency of procuring 24/7 clean electricity for corporates.The interaction of T-EACs with existing EAC schemes does require careful design,however.Indeed,if T-EACs are based on the same pool of certificates as EACs but with additional time-based data attached,ther
276、e is a risk that purchasers can fulfil hourly goals by reallocating existing EACs without requiring new flexible generation.Preventing double counting is also a critical aspect for EACs(discussed in the next section).Addressing the risk of double counting A distinct but related point to ensure that
277、government and corporate actions effectively lead to decarbonisation is to verify that a given unit of clean generation is only counted once within tracking methods such as EAC schemes and carbon credits,i.e.is not double-counted.Double counting can arise from certificates Advancing Decarbonisation
278、through Clean Electricity Procurement Procurement approaches PAGE|37 I EA.CC BY 4.0.being issued twice(double issuance)or two entities making claims on the same action(double claiming),when the retirement of certificates is faulty,for example.As per the RE100 technical criteria,“a credible renewable
279、 electricity usage claim should be associated with the ownership of all environmental attributes associated with the generation”.Current practice in the Peoples Republic of China(hereafter“China”)allows renewable electricity generators to issue both EACs and carbon credits.This is a form of double i
280、ssuance,which enables selling the decarbonising impact attributed to such generation to two different buyers.Double counting can also occur when a PPA is contracted without bundling the EACs,if the EACs are bought by a different party and entities make green claims on the basis of both the PPA and t
281、he EACs.In addition,when assessing the electricity generation mix of a country,a region or a utility,it is essential to be able distinguish the generation mix of the grid and the residual mix i.e.the generation mix that excludes the share of the electricity claimed through tracking systems.This ensu
282、res separation of the part of the clean electricity generation that is claimed through unbundled EACs,whether for mandatory or voluntary procurement.Indeed,in power systems in which not all generation is tracked via EACs,the residual mix provides transparency to power consumers as to the origin of s
283、old electricity.For example,in the European Union,the residual mix of countries is calculated and published at national level by the Association of Issuing Bodies5(AIB).An exception is Austria,which implemented“full disclosure”,meaning that GOs are issued for all electricity generated and,hence,all
284、electricity delivered to final customers is declared via GOs.In the United States,two bodies provide information on the residual mix and associated CO2 emissions,Green-e and the Edison Electric Institute.At present,this information is not available for all countries worldwide,which makes it more dif
285、ficult for corporates to understand the fuel mix of their consumption.In general,where data are available it is only on an annual basis,which prevents corporates from being able to carry out a more granular assessment when wanting to procure 24/7 clean electricity.5 More information on the calculati
286、on method of the Residual Mix can be found at the Association of Issuing Bodies.Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|38 I EA.CC BY 4.0.Generation and residual mix in selected European Union countries,2021 IEA.CC BY 4.0.*Austria has implemented“f
287、ull disclosure”,meaning that GOs are issued for all generation(fossil,renewable and nuclear);hence,as their tracked mix is 100%,their residual mix is zero.Note:The residual mix of a European country shows the sources of the electricity supply that is not covered by Guarantees of Origin(nor with othe
288、r Reliable Tracking Mechanisms)and excludes the share of the electricity claimed through such tracking systems.It also accounts for exports and imports of GOs and attributes claimed through any other Reliable Tracking Mechanism.Sources:IEA analysis based on data from IEA monthly electricity statisti
289、cs and AIB Establishing a standardised methodology to compute at a granular level the residual mix and ensuring such information is available and accessible is important to ensure actors have a clear view of the environmental impacts of their consumption.Existing gaps in data availability,particular
290、ly the low availability of information on the residual generation mix at the hourly level,are problematic,especially for corporates aiming to apply 24/7 approaches.To prevent double counting,strong governance of EAC markets should account for the uniqueness of EACs(in terms of geographical boundarie
291、s and other attributes)and set clear rules regarding the cancellation of certificates.In the United States,for example,the Federal Trade Commission issued guidance on the legal consequences of fraudulent claims and highlighted in its Green Guides that power linked to unbundled EACs could no longer b
292、e marketed as renewable.In turn,as the availability of transparent and detailed data will minimise double counting and claiming possibilities,reporting requirements should be strengthened.The EU RED III,for example,has strengthened reporting requirements of PPAs.EU member states now have to report t
293、he expected share of the national renewable power that will be procured through corporate PPAs,while ensuring that PPA buyers receive the relevant EACs.0%50%100%AustriaBulgariaFranceGermanyUnited KingdomGreeceItalyPortugalSpainGeneration mix(%)RenewabletotalNuclearFossil totalTotal generation mix0%5
294、0%100%Austria*BulgariaFranceGermanyUnited KingdomGreeceItalyPortugalSpainGeneration mix(%)Residual generation mixAdvancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|39 I EA.CC BY 4.0.Policy makers should create frameworks that support additionality To maximise
295、 the impact of corporate procurement while ensuring corporate goals are compatible with policy planning,expected procurement by corporates should be accounted for in planning.Policy makers should actively facilitate corporate procurement initiatives that deliver added value to decarbonisation effort
296、s.This requires that governments establish clear frameworks that allow corporates to make credible claims for their investments into renewable capacity while ensuring corporates do not receive credits for projects they did not initiate(e.g.projects originating from government auctions).In certain po
297、licies,to ensure the corporate-driven deployment of renewables extends beyond legal obligations,it can be advantageous to integrate the concept of“regulatory surplus”.This refers to“the renewable electricity that is not used to meet governmental targets,laws or legal mandates”.Regulations put in pla
298、ce by various states under the Renewable Electricity Standard in the United States provide a relevant example.Electricity suppliers have a legal obligation to produce a certain share of their electricity from renewables;the regulatory structure ensures that EACs the utilities use to fulfil their obl
299、igations cannot also be used to meet corporate goals.Procurement for smaller companies Enabling companies of all sizes to access clean electricity procurement options maximises the benefits of corporate procurement.In practice,despite the existence of several procurement options,not all are equally
300、feasible for corporates of different sizes.Smaller companies can struggle with options,such as PPAs,that may be contractually complex and need high bankability.Analysis of voluntary clean electricity procurement in the United States shows that while unbundled EACs and PPAs represent 72%of the total
301、clean electricity sales in 2020,they represent only 3%of the total number of consumers procuring clean electricity.In fact,unbundled EAC purchases are mostly made by commercial and industrial consumers buying large volumes.In contrast,other options,such as community choice aggregation,are mostly car
302、ried out by residential consumers.Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|40 I EA.CC BY 4.0.Clean electricity sales in the United States,share of volume(left)and share of number of consumers(right),2020 IEA.CC BY 4.0.Note:Community choice aggregati
303、on is a type of procurement in which small electricity consumers aggregate their demand to procure their electricity from a local government supplier with a green power product Source:IEA based on data from NREL(2020),US Voluntary Green Power Market 2020 Despite having lower electricity consumption
304、individually,in aggregate,smaller companies represent a large part of total electricity consumption.In Europe,for example,the energy consumption of small and medium enterprises represents 9 to 18%of gross inland consumption across European countries.As these enterprises often supply other companies,
305、their actions can impact the Scope 3 emissions of the larger corporates,ultimately having a significant impact on the global supply chain.Multiple barriers constrain participation of smaller corporates in clean energy procurement.On top of challenges linked to creditworthiness and high up-front inve
306、stment needs,lack of capacity to deal with the complexity of frameworks and negotiations leading to PPAs can act as a soft barrier.Some companies lack understanding of energy markets,which is challenging when corporate procurement options rely on wholesale market prices.Larger corporates can also fa
307、ce these challenges,for example when seeking to meet procurement goals in countries in which they operate at smaller scales.Boosting the access of smaller corporates to procurement options should be a priority.Policy intervention and regulation are central but other companies can also facilitate.Lar
308、ger corporates can help by sharing their experience with new procurement models,such as the Carbon-Free Energy Manager for companies Green power products17%Green tariffs4%Unbundled RECs45%Community choice aggregation7%Power purchase agreements27%Green power products35%Green tariffs0%Unbundled RECs3%
309、Community choice aggregation62%Power purchase agreements0%Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|41 I EA.CC BY 4.0.pursuing 24/7 procurement goals.Other corporates could pave the way by encouraging smaller entities to engage in aggregation to proc
310、ure either directly or through a platform or energy trader.When larger corporates engage in a contractual scheme or negotiate a green tariff with a utility,they can include smaller corporates(through aggregation contracts,as explained below).They can also share such experiences with other companies
311、or the utility may also be able to replicate the same kind of tariff structure for other corporates.Such approaches are especially relevant in contexts where electricity markets are not present,there are no aggregators and traders,and legislation frameworks restrict procurement possibilities.Aggrega
312、tion is also a useful facilitator to procurement.Among existing models,some require that each corporate signs a PPA for a share of the developers generation.In others,only one buyer has a PPA with the developer;this lead buyer then contracts back-to-back PPAs with other buyers.In some cases,a utilit
313、y or a trading intermediary takes on the role of the lead buyer.The transaction can also be done via an aggregating platform.Some green tariff products also allow customers to aggregate to reach the minimum demand required.One example is the Green Direct Program,a green tariff that commercial and mu
314、nicipal customers can subscribe to as a means to invest into new,local assets.This allows corporates to procure clean electricity while clearly identifying the origin of their investment.Within this programme,the utility Puget Sound Electricity(PSE)contracts PPAs with newly-built renewable projects
315、and establishes service agreements with its eligible customers.The Dutch wind consortium is an example of large corporations aggregating;its first PPA was negotiated in 2016 for construction of a 102 MW wind power plant.The experience of these companies highlights the main advantages of such a model
316、:economies of scale,cost saving and sharing,portfolio diversification,and replicability.Notably,it took three years for the consortium to negotiate the first PPA and the next one was completed in just a few months.Challenges identified include partner selection,transaction complexity,finding the cor
317、rect governance structure and management.Each of the four participating companies was responsible for a specific aspect of the deal negotiation,according to their respective strengths and expertise.Larger corporations can also aggregate with smaller ones to jointly sign procurement contracts.This wo
318、uld reduce accessibility hurdles for smaller corporates while spreading the risk among diverse parties,which is advantageous for suppliers.An inherent challenge,however,is that it can be difficult for smaller corporates to agree to similar price and offtake conditions as their larger partners.Provid
319、ed the electricity market is liberalised and financial markets have been developed,one way to facilitate participation of different-sized corporates is Advancing Decarbonisation through Clean Electricity Procurement Procurement approaches PAGE|42 I EA.CC BY 4.0.through an energy aggregator or trader
320、 that negotiates several PPAs with clean electricity suppliers to match them to a portfolio of consumers.The Apple,Akamai,Etsy and Swiss Re aggregation(facilitated by 3Degrees)is an example of a consortium of buyers with different demand profiles aggregating to procure clean electricity.This process
321、 enabled the four corporates to sign side-by-side PPAs for very different sizes of procurement,ranging between 4.5 MW and 134 MW.An emerging alternative,viewed by many experts as the best strategy to allow smaller corporates to access corporate PPAs,is aggregation of smaller consumers electricity de
322、mand.Similar to the Dutch wind consortium model,smaller corporates can also create a consortium to contract a PPA.This approach was taken in the United Kingdom,between a renewable developer and 20 universities.In this case,the contract was facilitated by a supply platform specialised in enabling bus
323、inesses to procure clean electricity,which arranged a standardised and simplified documentation of the agreement.According to that supply platform,such deals are possible starting with an electricity volume of 2 GWh.In India,by aggregating demand of several smaller corporates,a demonstration project
324、 of the World Resources Institute was able to achieve better terms and higher return on investment for procurement from newly-built rooftop solar PV than each corporate could have secured individually.Countries in which clean electricity procurement options are available for all sizes of corporates
325、will be very attractive to corporates that have decarbonisation goals and to their suppliers.Policy makers should ensure that required contractual efforts are minimised for example,through standardised procedures and contracts,and by analysing how to mitigate financial risk for SMEs.To make clean el
326、ectricity procurement more accessible for smaller corporates,policy makers can take actions across three key areas:Establish a portfolio of diverse clean electricity procurement options that allows corporates to start with an accessible option that suits their needs and move up in terms of risk and
327、complexity as they gain experience.Monitor and enable new solutions,such as new types of green tariffs,that address the need to better demonstrate additionality.Where electricity markets are in place,support development of financial markets to allow for energy trading.This will enable aggregators an
328、d traders to support the clean electricity procurement targets of corporates.Advancing Decarbonisation through Clean Electricity Procurement Impact of electricity industry structure and regulatory frameworks on procurement options PAGE|43 I EA.CC BY 4.0.Impact of electricity industry structure and r
329、egulatory frameworks on procurement options Regional variations in procurement options Available procurement options depend on the regulatory environment To a large degree,electricity market structures define the possibilities for procurement of clean electricity.Across the world,power systems diffe
330、r in their degree of liberalisation and vertical integration.Fully integrated utilities encompass generation,transmission,distribution and supply to end-consumers and can be either investor-or state-owned.Fully liberalised power sectors allow private actors to participate in generation and electrici
331、ty retail and let consumers choose their electricity suppliers.Currently,around 50%of electricity in the world is generated in systems that rely on competitive power markets.This could increase to around 76%of global supply as power markets in China implement diverse models of competition.Status of
332、electricity markets around the world in 2022 IEA.CC BY 4.0.Source:IEA(2022),Steering Electricity Markets towards a Rapid Decarbonisation Advancing Decarbonisation through Clean Electricity Procurement Impact of electricity industry structure and regulatory frameworks on procurement options PAGE|44 I
333、 EA.CC BY 4.0.The diverse electricity industry structures around the world give rise to a number of barriers to direct procurement of clean electricity.These barriers differ in terms of their legal nature and the actors that need to address them,but they can broadly be categorised as follows:Constitutional or legal barriers to the participation of private actors in electricity generation.This can