White Paper

How Trading of Granular Energy Credits Could Enable and

Accelerate the Transition to 24/7 Carbon-Free Energy

Building a Market for Granular Certificates

Published 3Q 2022

Commissioned by Powerledger

Pritil Gunjan Julia Benz

Research Director Research Associate

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Evolution in Market-Based Instruments to Achieve 100%
Decarbonization
Recent years have seen organisations and consumers put increasing effort into the sustainability and
decarbonization of their energy consumption. Perhaps unsurprisingly, there has been a corresponding
growth in scrutiny into how this is achieved, and in particular there has been a focus on the role of
market-based instruments for promoting renewable energy. These instruments are now the primary
way that a company procures and certifies that they are consuming renewable electricity. These can
take the form of Power Purchase Agreements (PPAs), Green Energy Programs or Green Tariffs,
where the energy is sold together with its Energy Attribute Certificates (EACs) or through the
purchase of unbundled EACs.

There’s no doubt that market-based instruments, such as EACs, have generated a large growth of
renewable assets. All of them involve allowing renewable energy producers to charge a premium for
the green element of their electricity and then trade that, or rather the certificate that represents that
green element, in a market. In doing so, they receive an additional income stream that helps them
invest in the development of more renewable energy assets, such as solar panels and wind turbines,
in the future. These markets and conventions have been highly successful because they allow
industry and consumers to use a mix of renewables and fossil fuels while gradually funding a rising
quantity of renewable assets that will one day replace those fossil fuels entirely.

However, this approach has come with problems that are increasingly difficult to ignore. Although the
extra capacity of renewable energy stimulated by these markets has been welcome, it has led to
concerns around the transparency of 100% annual renewable energy claims. Put simply, the market
is focused on pairing the overall consumption of electricity with the overall generation over a period of
a year and over a large geographical area. The market isn’t focused on pairing consumption with
renewable electricity generation within an hourly or closer to real-time period. Depending on the grid
mix, this means that at times during the day, consumers claiming 100% renewable are most likely
consuming electricity being produced by fossil fuels.

The steep rise of renewables has also created significant integration issues on the grid. Whilst there is
no doubt that EACs have stimulated the adoption of renewable resources, renewables by their nature
have brought with them, a variability in supply of electricity across the day; these fluctuations arising
from this variability must be balanced, both at every particular moment in time and for every particular
place on the grid through the skilful management of fossil fuel based energy reserves. Invariably, this
leads to running conventional plants at reduced efficiency and increases wear and tear. Further, more
of the same types of renewables built in and around the same locations create bottlenecks on
transmission & distribution corridors. The current certificate system is not helpful in mitigating these
issues. What is necessary is to be able to match electricity consumption and renewable electricity
production at a granular level to identify the gaps from both a temporal and spatial perspective. This
would also give clarity on what non-fossil solutions will be required to close those gaps.

The solution is straightforward in theory but complex in practice: Make sure that the market is
incentivized to pair consumption and production in a more precise way over both time and space.
Instead of creating a renewable energy market for total energy consumption over a period of a year,
the market considers supply and demand matching at hourly (or less) intervals. This approach is
called 24/7 carbon-free energy (CFE). It brings certificate markets into line with wholesale electricity
markets and most other trading markets today.

Thus, the focus is on raising the level of granularity of information for EACs, and trading of such
granular certificates (GCs), to send the right price signals to the market and thus reduce the stress on
the grid. This would help incentivise decarbonisation across the day. This approach would also bring a

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greater level of authenticity to 100% renewable electricity claims. One nuance here is that the energy
usage requirement has moved beyond renewable to carbon-free energy sources, with the ultimate
aim of decarbonising all grids, everywhere. This paper details the way this approach is progressing
and the impacts it is likely to have.

The System Today: Present State and Problems

In today’s energy system, EACs are used to track and verify the production, trade, and consumption
of renewable electricity. Each certificate represents proof that one megawatt-hour of electricity has
been produced from renewable sources. In the US, EACs were originally created to facilitate a
compliance market, where they were used by Utilities as a way to certify they were meeting
mandatory annual renewable electricity generation targets set by governments. Today EACs are now
purchased and traded voluntarily around the world by corporations, to meet their clean energy goals.

On a global scale, EACs can take the form of Renewable Energy Certificates (RECs), Guarantees of
Origin (GOs), and International RECs (I-RECs). As defined by the U.S. Environmental Protection
Agency, a REC is a tradeable, market-based instrument that represents the legal property rights to
the renewable-ness—or all non-power attributes—of renewable energy generation. 1 RECs provide
proof that the owner of an energy market instrument has procured one megawatt-hour of renewable
electricity as they account for the renewable energy that has been generated and flows through the
power grid. Whoever retires (or cancels / redeems) that REC “owns” the right to claim they are
consuming a percentage of renewable electricity. In recent years, as more individuals and
organisations have become interested in sustainability, the use of RECs to certify renewable energy
consumption has increased dramatically with thousands of terawatt-hours being tracked and traded
around the world.

EACs are usually issued on monthly timelines and are not assigned specific hours of generation, so it
is not possible to buy RECs that directly match electricity consumption. Hence, when Corporations
buy RECs to match their annual energy use, they could be buying RECs produced from generation at
an entirely different time of the day to when they consumed it. Further, while their facilities may be
located in Ohio, the RECs they procure could have come from electricity generated in California. This
mismatch in time and location has resulted in very blunt market signals. There is a demand for more
renewable electricity, but the details of where and when that electricity is needed is difficult to
determine using an annual matching mechanism that does not have timestamped energy data.

The Need for Granular Certification

In creating time-based RECs also known as Granular Certificates or GCs, RECs are essentially
fractionalized to certify electricity production using hourly data. For example, a monthly band of EACs
representing 31 days of generation would be replaced with 744 granular certificates, each
representing one hour of generation during the month. Beyond capturing time-stamped data, each of
the 744 granular certificates includes information on the amount of electricity produced, the asset type
or source, and grid on which it is produced.

On a large scale, GCs can generate insights about the availability of CFE on grids during the entire
day. This information helps energy consumers to better manage their energy usage, while promoting
more precise strategies for decarbonisation. Using this information customers can optimise their non-
carbon intensive energy usage, by delaying energy intensive activity to the hours where renewable
energy supply is high or by procuring a mix of renewables that better match their existing consumption
profile. This information also allows customers to play an informed role in advocating for energy policy

1 https://www.epa.gov/greenpower/renewable-energy-certificate-monetization/

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changes in their region or new types of 24x7 products from their energy retailer. Ultimately,
consumers who struggle to source renewable energy that matches their consumption may even
consider moving their facilities to other regions where the grids are cleaner or renewable energy
sources are more readily available.

How effective are GCs and the 24/7 solution?

To explore the potential of GCs, several stakeholders across the energy industry such as large
utilities, energy consumers, grid operators, government agencies, NGOs, existing certificate schemes
and technology providing software companies have joined the non-profit organisation EnergyTag.
EnergyTag is an industry-led initiative created to define the first standard for energy certificates with a
timestamp record of an hour or less. All of its members recognise the importance of verifying the
source of energy consumption on a far more granular basis.

Adopting a 24/7 CFE solution requires consumers to identify the cumulative fuel mix of their procured
or on-site generation and match that against their consumption profile across (at least) every hour of
the day. Matching consumption spatially brings with it the requirement to connect consumption and
production geographically so that each facility’s consumption is matched against local generation.

A key benefit of granular certificates is that it will improve the authenticity around renewable energy
claims by linking renewable energy generation to a customer’s consumption in near real time and
make the certificate system much more reflective of the physics and economics of the grid.
Furthermore, this principle creates a new market signal for renewable energy developers, energy
storage and demand side management solutions. Like the energy market today, it is expected that
GCs will be priced differently throughout the day depending on the time and corresponding supply and
demand of renewables. Certificates will likely be far more affordable when there is an oversupply of
renewable electricity available, and more expensive when less renewable electricity is available. The
variation in pricing is the signal that renewable energy developers and energy storage technologies
could find invaluable. For example, in periods of high supply and low pricing, storage owners could
buy or store any renewable electricity paired with a battery (and its corresponding certificates). Then
at a later hour of the day, put the electricity back onto the market, and sell the now higher priced
certificates, when there is less renewables available.

The temporal and spatial consideration of 24/7 CFE should drive the increase in new clean energy
generation and storage technology to meet the demand of every individual grid, and in the medium
term, support the build out of the energy storage market.

The adoption of GCs will also play an important role in the development of the green fuels sector as
the time and location information contained on the certificates will provide verifiable ways to track the
production of green hydrogen, for example, using electricity generated from renewable sources.

All of this could result in significant progress towards complete decarbonisation of every grid,
everywhere. As more consumers move towards this common goal, the grid will also benefit from
increased self-sufficiency and improved infrastructure (particularly interconnectors) by avoiding the
transmission of high volumes of renewables across large, congested distances or balancing an over
or undersupply of renewables across the day.

In the near term, GCs, with their spatial and temporal information, may not replace EAC certificates,
however technical solutions for GC issuance across all markets have been defined. Existing
renewable energy producers may choose to have GCs issued for their generation and sell them on
the open market as they have higher value, and this value will ultimately help them gain acceptance.

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Renewable energy Generators and MN Consumers are already considering how to work together to
begin the time-based Energy Attribute Certificate (T-EAC) market creation to ensure mutual benefit.

With granular certificates, energy consumers can build strategies that enable them to power their
systems with renewable energy around the clock. Organisations such as Peninsula Clean Energy,
Google, Microsoft, and the Sacramento Municipal Utility District have already adopted this level of
matching and announced 24/7 CFE targets. The benefits of 24/7 CFE are clear and when
demonstrated at scale can help support a global transition to a decarbonized economy.

As Doug Miller, Deputy Director, Market & Policy Innovation, Clean Energy Buyers Institute (CEBI)
said when referring to GC effectiveness, “There are emerging solutions for voluntary 24/7
procurement that will likely enable energy customers to send more targeted, powerful market signals
for carbon-free electricity (CFE) at specific times of the day. These market signals—delivered through
price premiums for time-stamped energy attribute certificates (EACs)—will help drive CFE resources
investments meeting customers’ time-sensitive procurement needs. However, to make 24/7 CFE
solutions readily available in a consistent, comparable, and scalable way for customers and enable
customers to substantiate their 24/7 claims, there is an important precondition: EAC issuing bodies
and registries globally must first adopt hourly or sub-hourly timestamped EACs (also known as
“granular certificates'') in line with the EnergyTag Scheme Standard. The Clean Energy Buyers
Institute (CEBI) is working alongside EAC registries and issuing bodies and standards bodies to
enrich EACs with timestamps—along with other sought-after attributes 2 for EACs—in order to enable
a broader menu of next generation procurement options that includes, but is not limited to, 24/7.”

24/7 Market Development Challenges

Several challenges exist for wide-scale adoption of 24/7 CFE. Early adopters have highlighted that
access to high-quality consumption, CFE, and emissions data on an hourly basis is not
straightforward. Data standards across renewable energy producers, utilities and grid operators also
vary. For multinationals (MNCs) that operate in multiple electricity markets, both access and quality
has varied widely across regions. This inevitably means more work to find and curate the granular
data that is needed for 24/7. In the US market, the Linux Foundation has established a project under
LF Energy to support industry wide collaboration to establish a data standard for both power system
and customer carbon emissions data. The establishment of data standards and how customers can
readily access their own and market data will be an important gate opener for many 24/7 activities.

But having access to standard data solves only half the challenge. In most cases, a consumer is
unlikely to have a streamlined automated process for collecting and matching metered data for their
consumption and any renewable energy generation they have procured. In fact, most corporations
and governments are unaware of the opportunities that having access to their energy data could
provide, and on how to go about accessing and analysing this information so that they can take
necessary actions.

Moving to policy, in compliance markets, GCs are not currently recognised within the existing
renewable policy frameworks. In the US for example, Federal and State-level renewable portfolio
standards (RPS) require electricity suppliers to procure a specified proportion of their annual
electricity from renewable energy sources. These annual compliance targets are verified using RECs
at a 1 MWh level rather than broken down into more granular measures. The Renewable Energy
Directive (REDII) in the EU market also contains a 1 MWh measurement of renewable energy for
GO’s.

2https://cebuyers.org/blog/with-enhanced-energy-attribute-certificates-energy-customers-can-use-their-voluntary-
procurement-to-send-more-powerful-and-targeted-market-signals-for-systemic-grid-decarbonization/

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There are, however, proposed policy changes happening across global markets to match a
percentage of electricity producer portfolios as 24/7 CFE. President Biden signed an executive order
in December 2021 that specifically addressed 24/7 CFE, proposing a goal of 100% carbon pollution-
free electricity on a net annual basis by 2030, including 50% 24/7 carbon pollution-free electricity.3
Sub-national RPSs are moving to include targets for new clean energy sources as well. In the EU,
REDIII proposes to update the measurement metric, building on the 2018/2001 EU Directive (RED II)
biofuels requirements that stated in order to be eligible for the renewable transport fuel target, there is
a requirement for both temporal and geographical correlation. This is to ensure that the production of
biofuels, such as green hydrogen can be certified and tracked in a reliable, transparent manner.
However, these policy changes are still in a nascent phase or yet to be endorsed, and will need to be
tested out over time. While voluntary reporting groups, such as the RE100 initiative, acknowledge that
some of their members are looking to match at a more granular level, there is limited guidance on how
to report 24/7 CFE. Beyond these challenges, there is simply a need for more regulation or policy
consideration to assist the development and scaling of CFE markets.

Ultimately, the barriers are indicative of a young marketplace and can be addressed with greater
collaboration, data uniformity, policy, and the right level of investment.

Market Growth and Assessment - Three Types of Profiles

When assessing MNCs, Commercial and Industrial (C&I) customer requirements and their likely
uptake of 24/7 CFE, the market can be grouped into three broad segments.

The first segment consists of 24/7 CFE innovators and contains less than 1% of all consumers, sitting
predominantly in the Technology sector. This segment has both the resources and data capabilities to
support the workload and complexity of measuring the carbon intensity of energy procured in every
hour of the day. They have already met, or are well progressed towards their 100% annual renewable
energy target and have dedicated energy teams, a budget and the technology required to move
towards a more precise measurement. After all, measuring progress towards 24/7 CFE requires
identifying usage of electricity down to (at least) hourly intervals across all facilities on each grid and
then considering the strategies required to improve upon the %CFE Score. It is not a trivial task.

What has been particularly interesting in recent months is the way top tier companies are recognising
and adapting to the challenge. Comparable organisations have been building alliances and sharing
their insights of early problems to be solved, along with their successes. So, unlike many other
commercial arenas where secrecy and patenting methods and techniques has been the approach,
24/7 has resulted in a much more collaborative ethos. Effectively, the top tier of 24/7 consumers, grid
operators and service providers are helping to educate the market and each other via informal
channels and industry working groups, as they progress towards the build out of early solutions that
will support the market as it grows.

The second market segment might aspire to go carbon free 24/7 but may not have the necessary
resources or budget. These organisations typically manage their sustainability activities with
spreadsheets and a low level of automation. For this group, moving to a 24/7 CFE measurement and
defining a roadmap to get there would be a huge commitment of resources and time, with no clear
business case. Anecdotally, while C&I customers in this tier understand the benefits this transition
could bring, they have been hesitant about changing their current targets or over-committing and not
having the expertise or internal buy-in to meet more granular targets. Unsure on how they will

3https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/08/fact-sheet-president-biden-signs-
executive-order-catalyzing-americas-clean-energy-economy-through-federal-sustainability/

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evidence and accurately measure themselves against more granular targets has also been an
emerging theme. Scrutiny on greenwashing has only amplified those concerns.

The third and likely largest segment of MNC and C&I customers may or may not be clear about what
24/7 CFE is and its distinction from 100% annual matching claims. They will probably also be waiting
for a clear pathway, policy changes and the right tools to implement any 24/7 CFE policy. There are
some misconceptions around the 24/7 solution in this segment that it only addresses the last 10-20%
of decarbonisation. But that is not the case. It will do much more than that. Industry groups such as
the Eurelectric 24/7 Taskforce4 have been working hard to help grow the understanding for all
electricity users. As Bruce Douglas, Business and Communications Director at Eurelectric said “There
is increasing interest in 24/7 Carbon Free Energy (CFE) matching from a range of stakeholders—
buyers, suppliers, third party solution providers and policy makers. However, there is still a lack of
knowledge and understanding of what it is, why to do it (the benefits) and how to implement it.
Eurelectric are coordinating a European 24/7 hub to raise awareness, deliver thought leadership and
policy recommendations, and train market players in order to increase demand for granular energy
matching”. Without the continued focus and advocacy of groups such as Eurelectric and CEBI in the
US, potentially getting to 100% annual matching is as far as this segment’s ESG commitment will take
them. Particularly where shareholders or market regulations aren’t requiring them to do so,
Governments and their 24/7 policy changes will be needed to drive real uptake and growth in this
segment.

Given that the move towards 24x7 CFE matching is still relatively young, the growth of the market in
the near term depends on how each customer segment responds to the regulatory and the general
zeitgeist of the ESG environment. Adoption of 24/7 goals requires corporate vision, regulatory
commitment and buy-in; however, its adoption is making good headway.

As Savannah Goodman, Tech Lead of Data and Software Climate Solutions at Google, said recently,
“In the past 2 years, T-EACs have been transformed from a concept into development and now early
deployment. Advancing granular certificates can enable 24/7 CFE as an hourly tracking solution that
brings emphasis to the co-location of consumption on the same grid as production for the T-EAC.
Until there is a collective awareness at a local grid level, it won’t be apparent what tools will be
needed to bring scale to decarbonisation. We are seeing progress, but this can be further accelerated
by growing demand signals from large buyers (e.g., companies, utilities, and governments) and by
supporting registries in transitioning to hourly or sub-hourly tracking and issuance.”

Energy Portfolio Management

The first step a consumer will need to take towards 24/7 CFE is understanding their current renewable
to non-renewable electricity consumption on an (at least) hourly interval. This effort should not be
underestimated, as the energy sources need to consist of all renewable (i.e., wind, solar, hydro,
biomass) and non-renewable fuel types being consumed. The contracts for those sources could be
with renewable energy producers via PPAs, energy retailers, community choice aggregators or
utilities. Sustainability Energy Management platforms that automate data collection for energy
provenance and traceability of each energy source are essential to establishing a consumer’s energy
portfolio. Additionally, a means to accurately track granular emissions at individual sites and enable
users to track the percentage of carbon free energy by site and time is also essential. In recent years,
blockchain technology has been an efficient way to enable the tracking of energy and all its attributes
by creating a time and location stamped digital record using granular meter data. Blockchains such as
Solana, are faster and far more energy efficient than others, which is essential as smart meters can

4 https://247.eurelectric.org/

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post data in near-real-time, requiring the consolidation of millions of small energy transactions in
seconds.

Figure 1 shows a sample visualisation of hourly consumption mapped to various types of generation
matched off against a customer’s consumption across the same period.

Figure 1 An 24/7 Example Energy Portfolio -- Management View

(Source: Powerledger)

A core feature to increase transparency is customisable reporting based on locations and time frames
selected. Such reports contain descriptive analytics on total consumption and its breakdown, and CFE
metrics based on the renewable vs non-renewable consumption, carbon emissions avoided, and
finally, a way to verify that renewable sources have allocated certificates to the corresponding
consumption at a granular level.

Enhancing a 24/7 System by Enabling Trading

There are several ways that a corporation can go about purchasing EACs today. “Bundled” EACs are
sold together with the generated renewable electricity. They can be bought through multiple channels
such as PPAs, green energy tariffs, or green programs. When the EACs are unbundled or sold as a
separate transaction from renewable energy generation, customers buy the certificates separate to
the electricity they consume. Regardless of the procurement method adopted, EACs are the common
thread required to substantiate any CFE procurement claims.

For corporations beginning their decarbonization journey, unbundled EACs are the most common
procurement method adopted to achieve their sustainability targets, because the purchase contracts
are relatively simple, provide flexibility and low risk. Unbundled EACs have also been a way for other
customers to address gaps in their existing onsite renewables production or PPA contracts to achieve

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a 100% annual renewable claim. In the US in 20205, unbundled RECs represented the largest
renewable energy market instrument used by voluntary buyers to meet their sustainability targets.

Enabling Trading
Evolving traditional unbundled EAC marketplaces to a digital and accessible GC marketplace comes
with low participation barriers for 24/7 aspirants. One of the most important roles a digital marketplace
will play is being able to efficiently aggregate and match off participants' needs against the available
supply of granular certificates within a region. This aggregation at a regional level will send clear price
signals in the short term that will drive both renewable energy generation and consumption decisions.
In the longer term, price signals created by an undersupply of clean energy at specific times (or
locations) will direct the development of new clean technology, storage solutions or a combination of
both that can cover the most carbon intensive hours of a grid’s generation mix with clean power. For
instance, storage operators will be able to leverage market price signals to benefit from price arbitrage
across the hours of high demand by discharging clean energy stored during periods of low demand
and selling the associated GCs of that clean energy.

Enabling a marketplace for granular certificates also guarantees the lowest price for consumers as the
clean generation with the lowest cost will be the first to clear in the market. The market price will be
set where demand matches supply within a given hour. This is the highest price corporations will be
willing to pay and the lowest price that energy developers will be willing to receive for clean energy.
The marketplace will provide valuable signals to all participants of oversupply, excessive demand and
to an extent, where policy is not working. Meaningful progress on grid decarbonisation will not be
delivered by individuals, but rather a market driven response.

To be able to optimise their individual orders in a GC market, consumers would benefit from the
support of visualisation tools that identify their non-renewable consumption gaps, and efficiently match
those hours across a given period with CFE purchase opportunities. Additional portfolio optimisation
tools such as being able to set %CFE targets or pricing thresholds will also help ensure that granular
trades can clear and settle with efficiency, but also to suit a consumer's own portfolio preferences.

Ideally, customers will have the autonomy to customise their GC buying criteria beyond matching
granular certificates to their location or local grid bidding zone, such as choosing to procure GCs from
projects that provide the greatest level of emissions reductions. However, in nascent GC markets
customised matching of consumption and the GC, will require careful consideration. Energy market
participants will need to work together to develop a shared understanding of this and more importantly
how the transfers of GCs across bidding zones will be coordinated. The most important step initially
will be to grow the volume of GCs so that initial liquidity pools aren’t limited.

Ultimately, a digital and transparent marketplace can provide strong market signals for developers
and individual grids to make informed investment decisions regarding siting and technology for new
projects. Moreover, the availability of pricing information for GCs can assist regulators monitoring the
markets as well as informing policy.

Smart Energy Trading and De-Risking PPAs

Digital energy trading platforms can also help facilitate the transition towards 24/7 CFE by enabling
large C&I consumers to collaborate through their renewable energy providers by forming local energy
trading groups. Trading rules can be established by the Renewable energy supplier to allow
customers to balance their excess of contracted renewable generation on an hourly interval with other
contracted customers in the market who may be in deficit for that hour. Such trading practices can

5 https://www.nrel.gov/docs/fy22osti/81141.pdf

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help both off-takers as well as renewable energy producers to de-risk commitment to contracted
volumes in long-term conventional PPAs.

Case Study: Midwest Renewable Energy Tracking System

Powerledger has partnered with the Midwest Renewable Energy Tracking System (M-RETS) to
launch TraceX, a blockchain-enabled certificate trading platform with bespoke features that
provides for a seamless trading experience. This platform is essential as M-RETS issues more
than 145 million EACs annually and is the largest EAC registry in North America. Currently
offering standard EACs, TraceX’s architecture is already evolving to support the issuance,
trading, and retirement of granular certificates. The TraceX marketplace allows participants to
customise their EAC purchases with several attributes to align with their business sustainability
goals, such as buying EACs from a specific project, location, renewable technology, or one that
is eligible for a compliance or voluntary program. Signals are already being sent by customers
wanting to procure EACs from locations based in the same state as their facilities. Being able to
refine those signals to their local balancing authority will provide even sharper signals for the
siting of future renewable projects.

Figure 4 The TraceX Platform

(Source: Powerledger)

Customers also benefit from the platform’s real-time price discovery when they enter the market,
providing a high level of trust and transparency for buyers and sellers. Upon sign up, customers
link their existing EAC registry account, allowing them to import EACs into the marketplace, list
for sale, and have ownership in the registry updated seamlessly when an EAC sale or purchase
is successfully completed. All EACs listed for sale are secured in the registry so that they cannot
be double-sold at the same time to another customer.

The permissions-based blockchain tracks each successful transfer of ownership, providing an

immutable audit trail for each transaction. With built-in transaction reporting, customers gain
greater insight and traceability of their EACs. TraceX is built to scale and can support up to

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50,000 transactions per second, which will become very important as the EAC market evolves to
a more granular time-based EAC procurement model.

In the move toward 24/7 CFE, the TraceX marketplace works cohesively with VISION, an energy
portfolio management tool that allows users to overlay the time and location stamped renewable
energy generation profile against their energy consumption from non-renewable resources. For
periods where the energy consumed exceeds contracted renewable energy, customers can
procure granular certificates to increase their % CFE. In cases where renewable energy
generation exceeds energy consumed, customers can sell off those granular certificates in the
market to optimise their energy costs. Marketplace participants can use these findings on
TraceX and make data-driven decisions to fill their deficits or trim their excess of clean energy
on an hourly or sub-hourly basis (depending on the availability of data).

Liquid, transparent markets with a robust price signal are a key prerequisite for 24/7 CFE
adoption and growth. The development of these markets is an important foundation for the
energy transition.

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Conclusion
There is no doubt that the ambitious net zero targets of nations require the scaling of carbon free
energy well beyond current capacity. The challenges posed by arbitrary and uncontrolled renewable
deployment, that ignore time and space considerations of the grid will only serve to destabilise the
network, add cost, and possibly result in carbon consumption too.

The 24/7 Carbon Free energy concept emerges as a credible route to solving this problem but
requires adoption by a broad range of energy users. In this paper we have segmented the energy
users in terms of appetite to push change through, with the top tier doing much of the work in helping
define the tools needed and a successful approach. The second and third tiers have given indications
of following suit, and this is a welcome sign. It is also something the tier one group are actively
encouraging by making many of their field studies public.

To support time and space energy considerations, Industry groups, such as Energy Tag, have
developed a granular energy certificate standard so that market instruments can evolve; However,
barriers still exist. Policy changes will be required to ensure targets move beyond the low-resolution
format of annual measurement to something far more granular and authentic.

What is also very clear is that the essential first steps for any organisation embarking on a 24/7 CFE
program is to establish the complete credentials of the energy they are consuming. A sentiment often
expressed by committed 24/7 companies is that moving from 100% annual renewable energy matching
to 24/7 CFE first requires getting really clear about what energy you are using and when you are using it.
What that demands then are tools that can trace, track and trade that energy. It is a prerequisite for
everything else that follows.

While some of those enterprises are developing their own solutions to benchmark and deliver
compelling 24/7 targets, a robust tool kit of 24/7 solutions covering granular CFE measurement and
24/7 trading will be required for broad market adoption. The tipping point for 24/7 adoption is
dependent on tools that automate and streamline all the activities that every large energy consumer
will need to undertake. Tools to verify electricity source and emissions consumption already exist and
are in early stages of scaling. Digital EAC platforms and marketplaces that can provide 24/7
procurement solutions will go a long way towards addressing a core market need for the largest EAC
procurement channel in both the US and EU markets.

Ultimately as large companies pioneer this effort and pave the way with technology providers and
regulatory support, smaller companies will be able to follow suit. Many companies define themselves
as being on some kind of journey and for the very top tier that journey also includes bringing others
along with them for the ride.

As Savannah Goodman, Tech Lead of Data and Software Climate Solutions at Google, says, “Our
goal as a company is to support the rapid decarbonization of global electricity systems. Naturally we
are keen to encourage other companies to join us as we feel individual commitments will spur the
collective outcome we are all trying to achieve.”

24/7 CFE has made promising inroads into the problem of full decarbonisation. If the current
momentum from the Innovation leaders can continue to trickle down, the targets for 2050 may well yet
be reached.

Confidential information for the sole benefit and use of Powerledger.

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Acronym and Abbreviation List
CFE Carbon-Free Energy

C&I Commercial and Industrial

EAC Energy Attribute Certificate

EU Europe

GO Guarantee of Origin

I-REC International Renewable Energy

Credit

MNC Multinational Corporation

MW Megawatt

MWh Megawatt Hour

MNC Multinational Corporation

PPA Power Purchase Agreement

REC Renewable Energy Credit

RPS Renewable Portfolio Standard

T-EAC Time-Based Energy Attribute

Certificate

US United States

Confidential information for the sole benefit and use of Powerledger.

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Table of Contents
How Trading of Granular Energy Credits Could Enable and Accelerate the Transition to 24/7
Carbon-Free Energy 0

Evolution in Market-Based Instruments to Achieve 100% Decarbonization 1

The System Today: Present State and Problems 2

The Need for Granular Certification 2

How effective are GCs and the 24/7 solution? 3

24/7 Market Development Challenges 4

Market Growth and Assessment - Three Types of Profile 5

Energy Portfolio Management 7

Enhancing a 24/7 System by Enabling Trading 8

Enabling Trading 8

Smart Energy Trading and De-Risking PPAs 9

Conclusion 11

Acronym and Abbreviation List 12

Table of Contents 13

Scope of Study 14

Sources and Methodology 14

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Scope of Study
Guidehouse Insights has prepared this white paper, commissioned by Powerledger, to provide an
overview of 24/7 carbon free energy (CFE). It provides an overview of the key elements of CFE and its
value in supporting a truly 100% decarbonized grid; a case study that uses 24/7 CFE technologies and
strategies to create granular energy attribute certificates (EACs) and fill in consumption gaps with
renewable energy; and recommendations for regulators and corporates getting started with CFE.

Sources and Methodology

Guidehouse Insights’ industry analysts use a variety of research sources in preparing research reports
and white papers. The key component of Guidehouse Insights’ analysis is primary research gained from
phone and in-person interviews with industry leaders including executives, engineers, and marketing
professionals. Analysts are diligent in ensuring that they speak with representatives from every part of
the value chain, including but not limited to technology companies, utilities and other service providers,
industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Guidehouse Insights’ analysts and its
staff of research assistants. Where applicable, all secondary research sources are appropriately cited
within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are
synthesized into the qualitative and quantitative analysis presented in Guidehouse Insights’ reports.
Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are
unknown and assumptions must be made, analysts document their assumptions and are prepared to
explain their methodology, both within the body of a report and in direct conversations with clients.

Guidehouse Insights is a market research group whose goal is to present an objective, unbiased view
of market opportunities within its coverage areas. Guidehouse Insights is not beholden to any special
interests and is thus able to offer clear, actionable advice to help clients succeed in the industry,
unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech
markets.

Confidential information for the sole benefit and use of Powerledger.

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Published 3Q 2022

This deliverable was prepared by Guidehouse Inc. for the sole use and benefit of, and pursuant to a
client relationship exclusively with Powerledger ("Client"). The work presented in this deliverable
represents Guidehouse’s professional judgement based on the information available at the time this
report was prepared. Guidehouse is not responsible for a third party’s use of, or reliance upon, the
deliverable, nor any decisions based on the report. Readers of the report are advised that they assume
all liabilities incurred by them, or third parties, as a result of their reliance on the report, or the data,
information, findings, and opinions contained in the report.

© 2022 Guidehouse Inc. All rights reserved.

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