Andlinger Center Speaks: Companies are betting on a new approach to cleaning up electricity grids
By Molly A. Seltzer
Companies are getting more thoughtful about how they source clean power. A new approach in clean power procurement, known as 24/7 carbon-free electricity (CFE) procurement, focuses on sourcing clean electricity more locally and timed more closely to when it is needed by customers. Google, Microsoft and the U.S. government are among the early adopters and proponents of this approach, and many other organizations have committed to advancing it through the “24/7 Carbon-free Energy Compact” launched by Sustainable Energy for All and the United Nations.
Energy systems expert Jesse Jenkins and his research team studied the impact of 24/7 CFE procurement on electricity systems and carbon goals. In this Q&A, Jenkins, assistant professor of mechanical and aerospace engineering and the Andlinger Center for Energy and the Environment, and Head of Clean Energy and Carbon Development at Google Maud Texier speak to what is unique about this model and how it can accelerate the switch to a clean electricity system.
Jenkins leads Princeton’s ZERO lab and helped establish a new low-carbon technology consortium at Princeton, where Google is a founding member. The company also became a member of Princeton E-ffiliates Partnership this year. To dive deeper on 24/7 CFE, watch a seminar about the research and download the findings.
What is 24/7 carbon-free electricity and how is it different from what came before?
Jesse Jenkins: What’s been done historically is referred to as “100% annual matching” which means corporations, municipalities, or organizations buy credits from solar and wind farms around the country to offset their use of local grids that continue to rely on polluting sources. They buy enough credits, in megawatt hours of clean energy, to match their total annual electricity consumption. This has led to new solar and wind farms that would not have been developed otherwise and helped drive down the price of clean energy. Make no mistake, this approach has helped fundamentally transform the electricity landscape and the political context, as the cost of policy action is now dramatically lower. 100% annual matching is climate leadership; it goes well above and beyond what organizations are required to do, but it does have its limits.
That limitation is mainly that there is a mismatch between when those megawatt hours are produced and when they are demanded. This mismatch limits the ability to reduce CO2 emissions associated with a buyers’ electricity consumption. And importantly, it does not accelerate innovation for the remainder of the technologies we need beyond wind and solar power for society to get to 100% carbon-free electricity, such as clean, firm generation technologies and long-duration energy storage. Clean, firm technologies refer to power assets that are available anytime of the year for as long as they are needed. They include advanced geothermal, hydrogen combustion or fuel cells, carbon capture on fossil or biomass power plants, advanced nuclear power, and a number of other technologies that meet these parameters. 24/7 CFE procurement provides a way to address the pieces of the equation that annual matching has not met.
Maux Texier: Google became the first major company to match 100% of its annual electricity purchases with renewable energy in 2017. We recognized then that, while this was an important milestone, it is not the same as fully decarbonizing our electricity consumption. The new goal that we set for ourselves in 2020 is to completely eliminate any carbon emissions associated with Google’s electricity use by 2030. This means operating our entire global infrastructure on carbon-free energy – every hour, every day, everywhere. By taking on this goal for our own operations, we hope to demonstrate technologies and advance strategies that accelerate the decarbonization of entire electricity grids. We are excited to see more large energy consumers adopt similar goals, and believe this growing movement will help drive the rapid decarbonization of electricity systems that is required to reduce emissions at the speed and scale needed to avoid the worst effects of climate change.
What did your study show about the impact of the 24/7 CFE approach?
Jesse Jenkins: In our research, we found that 24/7 CFE procurement enables deeper emissions reductions and deeper transformation of the electricity sector than 100% annual matching. It does this by driving early deployment of advanced clean, firm technologies and long-duration energy storage, in addition to variable renewable energy technologies like wind and solar power. We also see that this approach drives significantly more retirement of natural gas power plants, replacing them almost one-for-one with clean, firm capacity. This could help avoid investments in additional natural gas plants that would make it more difficult for the system to transition in the longer term. It does so, however, at a cost premium for early leaders and a higher cost of electricity for those who choose to take this route. These early leaders are essentially investing in accelerating innovation and making it much easier for the broader society to follow them on the path to 100% carbon-free grids. The heart of the matter, I believe, is the transformative impact on electricity systems. 24/7 CFE procurement can drive early deployment of advanced technologies, improving the cost, financeability and widespread availability of technologies the whole grid needs to become 100% carbon-free.
Google has been buying clean power for over a decade – what’s difficult about this 24/7 approach?
Maud Texier: We operate a global business and we encounter different challenges in different places. In some regions, we simply don’t have enough sun and wind at the right times to support our around-the-clock electricity demand. In other places, there are different constraints. In Singapore, for example, there is a huge amount of sun, but there is very little land for building big solar farms. Land is extremely valuable, so the economics of building a solar farm there are much more challenging than in the Californian desert, for example. In other places, there are legislative and regulatory barriers to buying clean energy directly from developers, the way we have done historically, so that requires new policy frameworks.
Another challenge is that we need to change how energy is tracked and certified. Historically, renewable energy credits are issued at a monthly or an annual resolution, but for this new approach, we need to track clean energy production and consumption on an hourly basis. Until we can track clean energy at an hourly level, it will be difficult to validate 24/7 carbon-free energy claims.
What progress can you point to so far?
Jesse Jenkins: In our study, we explored the different impacts of matching between 80 and 100% of hourly demand with carbon-free generation. One thing that’s important to note is that the research shows that if an organization wants to stop a little bit short of 100% carbon-free power, say 95% or 98% CFE, it can still drive the deployment of local carbon-free power sources and have significantly lower costs. So companies can get started and aim to steadily increase their hourly matching and still have impact. Our study indicates that 24-7 carbon-free electricity procurement can be a next step on the road to zero emissions for corporate, government, and institutional leaders.
Maud Texier: We divide our work into three related buckets: clean energy purchasing; clean energy technology; and clean energy policy. And while much hard work remains, we have been pleased to see significant recent progress in all three areas.
On the purchasing side, we have recently done our first two deals employing an entirely new model for buying clean energy. Instead of contracting directly with clean energy project developers, we contract with a carbon-free energy manager who procures clean energy from many different sources – wind, solar, hydro, storage, and more – and then patches together these carbon-free resources to provide us with a steady output of carbon-free energy at a predictable price. In the United States, we have partnered with AES Corporation to get us to 90% carbon-free energy in Virginia, and in Europe we have partnered with Engie to get us to 80% carbon-free energy in Germany. We are excited to continue refining this model and to scale it to new regions in the years ahead.
On the technology side, we have partnered with the startup Fervo on the world’s first corporate agreement to develop a next-generation geothermal power project, which will provide an “always-on” carbon-free resource that can reduce our hourly reliance on fossil fuels. We have also piloted the use of batteries to provide back-up power at our data center in Belgium, which not only reduces our reliance on diesel generators, but allows us to provide valuable grid services to the Belgian electricity system.
Finally, on the policy front we recently released our most comprehensive statement on policy priorities for accelerating grid decarbonization: A Policy Roadmap for 24/7 Carbon-Free Energy. We are advocating for stronger clean energy policies everywhere that we operate and encouraging others to do the same.
We are proud of the progress we have made so far, but in global terms we need a lot more companies working to accelerate decarbonization to make meaningful progress on climate change. We recognize that not every company has the clean energy experience or resources that Google has, and we are committed to enabling a much larger cohort of companies or government entities to pursue 24/7 CFE through scalable innovations like the 24/7 manager model. The more organizations that commit to 24/7 and adopt these types of models, the easier it is going to be to fully decarbonize our company and the broader global economy.
What’s left to do?
Jesse Jenkins: Leadership isn’t just about doing one’s part or eliminating one’s own emissions. It’s also about making it easier for others to follow. I think that’s what this 24/7 CFE procurement does best.
Helping to accelerate the time to maturity and cost effectiveness of just a single clean, firm technology can make it far easier for the rest of the world to follow the path to 100% carbon-free electricity. The resulting impact on total CO2 emissions reductions is probably far larger than eliminating the entire emissions profile of a single company, even one as large as Google.
As a parallel, think about the impact of Germany’s investments in making solar power cheap. Compared to the relatively modest impacts on Germany’s own emissions, its investments have had a substantial impact on worldwide emissions and uptake of solar electricity. Just as individual countries can have outsized impact by accelerating innovation, individual corporate and institutional leaders, I believe, can also have outsized impact by accelerating the deployment of these critical technologies. I think that’s what Google and our team at Princeton are doing in this space. We need more companies to pursue this approach. Any organization that pursues or achieves 24/7 CFE procurement will do a lot for cleaning up grids globally.
Maud Texier: One thing that stands out is that to solve for those hard-to-decarbonize hours and regions we need a broader portfolio of carbon-free energy technologies. We need clean, firm technologies to come down the cost curve, and to be demonstrated in commercial settings. We need to build out the supply chains, the industries, and the ecosystems that are needed to support bringing those technologies online at scale. That’s why we’re excited to join Princeton’s E-ffiliates Partnership and support the work of the Princeton’s new low-carbon technology consortium, which is pioneering cutting-edge research in this area.