A growing number of organizations are setting their sights on increasingly sophisticated clean energy procurement strategies. These next-generation approaches, including hourly clean energy matching and carbon matching, are quickly gaining momentum, across both voluntary and regulated approaches. As companies set more ambitious climate goals, there is a need for more precise time- and location-based tracking. To drive the energy transition forward, companies now require tools that provide a clearer picture of the impact of their clean energy purchases and that facilitate execution of advanced procurement strategies.
A Solution: Granular Certificates (GCs)
Granular Certificates (GCs) are a transformative building block to implement these cutting-edge clean energy strategies. They provide the high-resolution, time- and location-specific data essential for organizations to measure and manage their clean energy portfolios.
EnergyTag, an independent nonprofit, has engaged a wide range of stakeholders to define robust standards for GCs. Unlike traditional Environmental Attribute Certifications (EACs), which typically represent annual or monthly clean energy production, GCs track the generation of clean energy on an hourly, or even sub-hourly, basis. This level of granularity allows businesses to precisely match their electricity consumption with clean energy production in real-time (“24/7”), or to focus their purchases on specific times and locations with especially high carbon intensity (“emissionality”).
For corporations with advanced clean energy procurement goals, this precision – and the tools to effect targeted procurement – are essential for grids to ultimately move towards 100% CFE. By leveraging GCs, organizations can procure carbon-free energy with greater impact and efficiency, reducing the temporal mismatch that plagues traditional clean energy procurement strategies.
GCs: A Key Piece of the Clean Energy Portfolio
GCs aren’t intended to replace established procurement methods like Power Purchase Agreements (PPAs), but to enhance them. To put this in context, it’s useful to step back and consider the menu of potential solutions that an organization can leverage to build a robust energy portfolio as GCs become increasingly available worldwide:
- PPAs: A PPA is a contract between an energy buyer and the developer of a clean energy project that hasn't been built yet. It’s a foundational energy procurement method for many 24/7 CFE buyers because it provides price stability that allows new clean energy facilities to be built. As a starting point, all PPAs going forward should be drafted to give buyers explicit rights to GCs, including any required data and registry reporting obligations to ensure buyers can receive those GCs and potentially sell those GCs to a secondary buyer when/if the original buyer deems it useful.
- Utility Green Tariffs: Available through utilities , green tariff programs allow utility customers to purchase energy and EACs through a special utility green tariff rate.
- On-site generation: Biomass, fuel cells, geothermal heat, and solar panels installed on premises are all ways a company might generate on-site energy.
- Unbundled GCs: Unbundled GCs are purchased as stand-alone certificates disconnected from the underlying electricity and generation asset. They can provide buyers a low-risk way to make carbon-free energy claims, but since they typically come from existing assets they generally don’t directly support new-build construction (“additionality”).
- Energy storage: While energy storage assets don’t generate GCs, they play a critical role in advanced procurement strategies by “shifting” GCs from one time to another. This could be used to “time shift” a solar PPA by charging during the middle of the day and discharging in the evening (whether to match load or displace a carbon-intensive fossil generation resource).
- GC Trading: Just as EAC trading can help buyers fine-tune their annual procurement goals, GC trading allows buyers to meet hourly-matching goals or to target times with high marginal emissions by filling in gaps in their portfolios and selling excess GCs when they don’t need them (see Figure 1 for an illustration of how GC trading can be used to help achieve a time-matched portfolio). Furthermore – and perhaps even more importantly – the data generated by GC trading platforms can send important price signals to developers of clean energy and storage projects to encourage siting new assets that can deliver clean energy at the times and locations where they’re needed most.
By strategically combining these tools, businesses can create energy strategies that align with ambitious sustainability objectives and move the collective towards a fully carbon-free grid.
Looking Ahead
The demand for GCs is undeniable. In the long run, it will simply be impossible to achieve a fully carbon-free electricity grid without the ability to track clean energy generation at a granular level. In the near term, LevelTen Energy’s Granular Certificate (GC) Market Readiness Report – which surveyed 18 clean energy buyers that rely on bundled EACS – demonstrates significant immediate demand. Respondents reported that they anticipate retiring an average of 71% of their EAC portfolio as GCs in 2026 if GCs are available for purchase globally. This represents over 17 TWh of new GC demand from those survey participants alone.
LevelTen Energy is actively laying the foundation for GC trading with the Granular Certificate (GC) Marketplace. Starting in 2025, energy buyers and sellers will be able to trade GCs in PJM via forward contracts and a spot market. The price signals generated as part of these auctions will provide critical price transparency on where and when clean energy is most needed, informing future project development decisions and incentivizing clean energy investments in the places and times of day where demand is greatest.
Challenges remain, including the fact that registry-minted GCs are not yet widely available in all regions. There is a critical need to upgrade EAC tracking systems to accommodate GC accounting and trading. Initiatives like the Registry Acceleration Fund are working to address these gaps to pave the way for advanced procurement strategies, but more attention and support is needed across all regions.
LevelTen’s goal is to continue to deliver marketplace solutions and transaction infrastructure that will increase accessibility and standardization for GC procurement to make granular CFE a truly achievable goal for businesses worldwide.
This content was originally prepared for the Climate Group 24/7 Carbon-Free Coalition.
