Numerous major companies, including Google, Microsoft, AES, and Constellation have joined LevelTen Energy’s newly launched Granular Certificate Trading Alliance.
The alliance is a first-of-its-kind trading and management platform for granular certificates, or energy attribute certificates that verify the time and location where carbon-free energy (CFE) is generated. The platform is also under development with the Intercontinental Exchange (ICE), a U.S. company that operates financial exchanges and publishes mortgage analytics.
The platform aims to enable energy buyers to easily source CFE and incentivize energy sellers to produce clean energy. As it scales, it will help decarbonize electric grids.
Alliance members will support the transaction infrastructure for the granular certificates and will also be among the first group of users when the solution launches.
The new solution adds to the already existing certificate space for energy markets as amid a skyrocketing demand for corporate clean energy procurements. In the United States, energy attribute certificates (EACs), called renewable energy certificates (RECs) or emissions-free energy certificates (EFECs), are used, while Europe has guarantees of origin (GOs), which are offered to carbon-free energy generators for each megawatt hour of clean electricity they deliver to the grid.
These energy certificates can be transferred to corporations through power purchase agreements (PPAs) that support the financing of new projects or through the direct sale of EACs from existing CFE-generating assets.
EACs have offered corporations new pathways to decarbonize their electricity use and support the buildout of new energy projects and infrastructure. However, they do come with their own challenges, including known difficulties for renewable energy, such as dark and windless hours. These gaps can make it more difficult for corporations to achieve their energy goals.
By comparison, granular certificates provide more information about CFE, such as the time and location in which the CFE is generated. EACs only certify the technology, such as wind, solar, nuclear, etc. As such, buyers have more ability to fine-tune their energy procurement strategy with GCs.
The new alliance will deliver the platform to make GCs more readily available.
“The GC Trading Alliance is tackling the next challenge for the energy transition, which is driving carbon-emitting resources off the grid at all hours,” said LevelTen Energy’s CEO Bryce Smith. “To achieve this goal we must, by definition, creatively re-deploy existing resources and creatively incentivize new CFE generation to come online where and when it is needed most. LevelTen Energy’s transaction infrastructure for granular certificates will deliver the practical solutions that carbon-free energy buyers and sellers need to make this a reality.”
