Additional methods for procuring renewable energy
Direct procurement from new offsite grid-connected generators e.g. Power Purchase Agreement (PPA)
Direct procurement contracts are agreements signed between a buyer (the SP procuring the electricity) and a renewable electricity supplier developing new generation. The contract ensures the procurement of electricity generated by a specific renewable project with renewable attributes.
There are generally two types of PPAs:
Virtual PPAs are contracts under which the renewable electricity generator sells the electricity into the local wholesale power market. The generator and the corporate buyer (Storage Provider) would then settle the difference between the variable wholesale market price and the contract strike price, and the Storage Provider would receive the certificates that are generated from the project.
Physical PPAs would allow the Storage Provider to schedule for and take delivery of the physical electricity and energy attributes, as well as other possible terms.
Storage Providers interested in procuring renewable energy through PPAs should have the PPA vetted by Filecoin Green prior to entering the PPA if they plan to use this as a renewable energy claim.
Unbundled Energy Attribute Certificate (“EAC”) purchases
Another method Storage Providers can employ is by claiming the environmental benefits of renewable energy production by acquiring Energy Attribute Certificates (EACs) issued to renewable electricity generators operating within the same market boundary as the SP’s operations.
Unbundled EACs can be procured separately from the generated electricity, giving SPs more flexibility in their procurement practices.
Storage Providers can purchase unbundled EACs like RECs (North America), Guarantees of Origin (Europe) and I-RECs (some other regions) separately from electricity to match with their procured electricity consumption.
The best approach for employing this sourcing method is for SPs to match their electricity consumption with real-time renewable energy generation (high granularity EACs) on a 24/7 basis. 3. This 24/7 approach is much more robust than the regular procurement method of matching the average supply and demand for a company over a long time period, such as a year or a month at best.
By procuring granular EACs on a 24/7 basis, SPs can match energy consumption and renewable generation much closer, which can enhance the accuracy of their carbon accounting practices and increase local grid flexibility.
Unbundled EACs should not be matched with the electricity consumption which is self-generated by the company from fossil fuel-based electricity generation facilities (such as Combined Heat and Power Plants).
In order to improve the sustainability of the network, Filecoin Green is in the process of purchasing unbundled EACs for SPs for energy consumed during and prior to 2022. These purchases are tracked on the filecoin.energy dashboard and Filrep reputation system.
Green electricity products from an energy supplier (e.g. Green Tariffs)
Under this method, a green electricity product is offered by an energy supplier distinct from the “standard” offering. In this case, Storage Providers would likely pay a per kilowatt-hour premium through an additional line item on their monthly electricity bill to shift from the standard offering to renewable electricity.
When this option is employed, the utility/supplier matches the electricity consumed by the company and it is delivered through the grid with renewable electricity procured from a variety of sources including specified projects. In markets where certificate systems exist, the utility/supplier retires certificates on behalf of the company consuming the electricity (AKA the Storage Provider).
In some cases, the utility/supplier can also back up the green electricity supply with the purchase of unbundled energy attribute certificates. These products can be structured in different ways with respect to the quantity and quality of renewable electricity offered to the consumer. Certain contracts of this kind are known as green electricity products or tariffs.
Default delivered renewable electricity from the grid, supported by certificates:
Under this procurement method, the renewable electricity in the electricity utility/supplier mix that has not been voluntarily procured by the consumer is delivered by the utility/supplier as a default supply to the customer.
Storage Providers can claim default delivered renewable electricity from their utility/supplier mix if and only if an equivalent amount of EACs are retired by the utility/supplier on behalf of their customers.
On the ‘additionality hierarchy’ this is the lowest option available to Storage Providers. If an SP wishes to claim renewable electricity in this manner, they must obtain the relevant information from their utility/supplier to verify that the renewable electricity meets the Credible Claims Requirements and that the electricity comes from an eligible renewable source.
It should be noted that while the five options listed above cover most categories, this list is not exhaustive, as there are many variations of supply arrangements. For each of these options, there are requirements for the qualifying criteria that must also be reported, such as the fuel type, location, greenhouse gas (GHG) emissions and the other environmental and social impacts and benefits of the electricity generation.
Last updated