The eyes of the world are on Dubai these days, where world leaders are hoping to make progress at COP28, the United Nations’ (UN) yearly climate change conference. Regardless of what happens in Dubai, it is abundantly clear that a rapid transformation of the world’s energy systems is needed in order to completely move away from fossil fuels. A 24/7 Carbon-Free Energy (CFE) approach to energy procurement is crucial to this transformation.
In order to phase out fossil fuels, the world must decarbonise its electricity systems. The UN itself recognises the importance of changing our electricity systems, and has since 2021 been leading the 24/7 Carbon Free Energy compact, an initiative Reel is proud to be a part of.
In short, 24/7 Carbon-Free Energy (CFE) means that every kilowatt-hour of electricity consumption is met with carbon-free electricity sources, every hour of every day, everywhere. It is only when 24/7 CFE is achieved that an electricity system is truly decarbonised.
At Reel, this is precisely the kind of energy system we are working so hard to build together with our customers and partners.
'Green' electricity certificates and 24/7 CFE
Today, a major barrier to the ambition of 24/7 CFE is the prevalent use of so-called ‘green’ electricity certificates. Businesses often purchase these certificates to reduce their emissions from electricity. There's one problem though: these certificates do not add any new carbon-free energy to the grid. And in order to achieve a 24/7 CFE system, there needs to be a major expansion in diverse carbon-free energy sources. By diverting corporate spending from electricity solutions with real impact, these 'green' electricity certificates stand in the way of true decarbonisation.
As a next generation energy provider, Reel is solving this problem by offering an alternative to 'green' electricity certificates: Power Purchase Agreements (PPAs). These electricity contracts add new, additional, and carbon-free electricity to the grid. Put simply, the amount of electricity that a business purchases through a PPA with Reel is the same amount of new carbon-free energy that is added to the grid, pushing us closer to the UN's goal of 24/7 CFE.
Strategies for achieving 24/7 CFE
In addition to expanding carbon-free energy sources, the UN outlines four key strategies for achieving 24/7 CFE:
- Time-matched procurement: matching hourly electricity consumption with carbon-free electricity generation. Hourly matching helps connect clean energy purchasing to underlying electricity consumption.
- Local procurement: purchasing clean energy on the local/regional electricity grids where electricity consumption occurs. This is the only way to reduce the electricity-related emissions that a consumer is directly responsible for.
- Technology-inclusive: all carbon-free energy technologies can play a role in 24/7 CFE. Any generator putting out electrons without carbon emissions, including nuclear, qualifies.
- Maximizing system impact: targeting the dirtiest hours of electricity consumption (i.e., with the highest fossil fuel usage) for clean energy replacement.
Reel's approach integrates each of these strategies. Here's how:
- Reel uses hourly electricity data to find the optimal combination of wind and solar PPAs. In doing so, we provide customers with the closest, hourly, carbon-free energy match between their electricity consumption and PPAs' energy production.
- Reel ensures the construction of new, locally-produced electricity generation. See, for example, how Baettr will cover 20% of their electricity consumption with energy from a new, local solar park.
- Reel works primarily with solar and wind technologies, and will soon implement batteries to cover the dirtiest hours of electricity consumption with carbon-free electricity.
24/7 CFE: Looking Ahead
24/7 CFE is the next step in the global effort to rapidly decarbonise our electricity systems. Leading companies like Google and Microsoft are already pursuing 24/7 CFE, marking a significant shift in energy procurement. Businesses that adopt 24/7 CFE are thus not only pioneering sustainability but are also future-proofing themselves.
However, achieving 24/7 CFE is not without its challenges. Ensuring stable CFE production requires a balanced mix of different sources, a complex task given the variability of wind and solar energy. Recognizing the potential for increased market volatility during this transition, Reel offers PPAs with stable pricing, providing customers with predictable electricity costs for 5-10 years.
If you’d like to know more about what we do, take a look at our CCO Anders Meldgaard Engtoft present here (starts at 8:25), or get in touch directly.