June 14th, 2022 — The transition toward clean electricity is underway, led by companies, states, cities, and utilities that have set ambitious clean energy targets. As these entities work to decarbonize, many have set net zero goals. To achieve these targets, the vast majority of these entities simply quantify their electricity consumption from the previous year and purchase an equal amount of renewable energy certificates (RECs).
Although buying RECs are a first step toward supporting clean energy generation and decarbonization, the traditional REC structure has allowed companies to claim 100% renewable energy when fossil fuels are still generating the majority of energy consumed. To truly decarbonize energy supply, there is a growing trend to commit to 24/7 carbon-free energy (CFE), meaning that every kilowatt-hour of electricity consumption is met with carbon-free electricity sources, at every hour and at every location.
To accelerate this trend, Granular’s digital platform provides a wide range of solutions to enable 24/7 CFE. By providing the management tools needed by corporate and utility buyers to manage 24/7 CFE portfolios, as well as a trading platform to create a fully liquid marketplace, Granular is well-positioned to facilitate the growing 24/7 clean energy sourcing market.
Annual RECs are inaccurate and inflexible
In both voluntary and compliance markets, today’s RECs typically match renewable generation and consumption on an annual basis.
While relatively easy to execute, annual matching fails to reflect when and where generation occurred and the reality that clean energy availability fluctuates from hour-to-hour.
The current system of annual REC trading is inflexible, allows for energy mismatches, and requires energy consumers, corporates, and utilities to work through brokers to facilitate trade agreements, hindering the scalability of the REC market as well as investments into new wind, solar, and hydro project development.
Shifting to around-the-clock carbon-free energy
Over the past several years, leading corporations, cities, and the U.S. Federal Government have made commitments to source carbon-free energy on an hourly basis in an effort to have greater carbon-reducing impact and better transparency into energy purchases.
A 24/7 CFE approach allows large energy consumers to achieve more accurate energy accounting, enables transparency across global footprints, and facilitates on-site local impact.
Instead of one data point per customer per year, 24/7 CFE requires 8,760 data points, accounting for each hour in a year.
Legacy REC brokers operate bilaterally and on an annual basis, and are not equipped to manage the data inflow and trading requirements at an hourly pace. Fully digital solutions will be required to aggregate and trade these credits.
Granular provides the market solutions to manage 24/7 RECs
As 24/7 CFE demand continues to grow, the ability to track, manage, and trade hourly certificates is becoming increasingly important Granular is well-positioned to serve the emerging 24/7 CFE market through a product suite centered around a certificate management environment, coupled with a trading platform.
Granular’s hourly REC platform provides a complete solution for energy generators, utilities and suppliers, and large energy consumers to manage their portfolio of granular certificates globally.
Connecting seamlessly with various registry providers, the platform simplifies the 24/7 journey. The platform includes portfolio and risk management dashboards, carbon accounting, and other compliance tools.
The company’s product roadmap includes the build-out of a marketplace later this year, allowing platform users to trade and balance with peers the excesses and gaps in their hourly matching profile. The first iteration of this marketplace will be launched in 2022 with Nord Pool—Europe's leading power market.
Powerhouse Ventures is proud to join Granular’s $2M Pre-Seed round led by Seedcamp with additional participation from Revent, and several other strategic energy and tech angels to accelerate the transition to 100% carbon-free electricity.
Special thanks to Shaandiin Cedar and Marie Thompson.
To read more about Powerhouse Ventures’ other publicly-announced investments, visit our Insights page.