New Plans for UK Consumers to Track Renewable Energy by the Hour

It won’t be long now before energy users will be able to check where their energy is coming from on an hourly basis and receive a discount on bills if they use electricity when renewable energy is plentiful.

According to plans led by start-up Granular and energy giants like Elexon and National Grid, energy companies will be launching a new mechanism for hourly renewable energy certificates in the UK. The mechanism will allow UK energy consumers to track their electricity source.

The initial launch of the new certification system will be as a pilot project starting at the end of April with a series of stakeholder engagement workshops and is still open to new participants. 

The move comes at a time when the global drive for greater transparency in energy procurement, known as ‘24/7 carbon free energy’ is accelerating. In an effort to reduce their carbon impact through their energy purchases, organisations such as Google, Microsoft and the US Federal Government have recently made commitments to source carbon-free energy on an hour-by-hour basis.

Currently with energy certificate schemes, such as the UK’s Renewable Energy Guarantees of Origin (REGO), renewable energy generation and consumption are matched on an annual basis. In other words, energy providers look at the previous years’ energy use and match it with the equivalent amount of renewable energy. This doesn’t reflect the ‘real world’ situation where renewable energy availability fluctuates from hour to hour.

Due to there being times of the day when renewable energy is less available, for example when it is less windy or sunny, consumers could be encouraged to use power when it is in oversupply by offering them a discount on their bills. This could lead to less gas being used.

A new report published recently, entitled Accurately Tracking Carbon in Electricity Markets by Net Zero innovation centre Energy Systems Catapult and electricity market Balancing and Settlement Code (BSC) manager Elexon, sets out how the industry could create the common rules, standards and processes to measure, track, report and verify the carbon content of electricity within the power system.

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Energy Systems Catapult, Senior Policy and Regulation Advisor, Sarah Keay-Bright, said:

“Currently the industry is not accurately tracking any given unit of electricity from the generator to the consumer. For example, energy suppliers can claim they are supplying green electricity to customers on a windless winter’s day because they hold a certificate for wind energy produced in the previous summer. However, the British energy market can now harness the power of digitalisation to accurately track carbon across the system at a granular level in time and space.”

The new certification system will allow participants to receive hourly certificates for their power generation in the Certigy registry which is managed by established Guarantee of Origin registry provider Unicorn. 

Making it easier for people to choose energy companies that are transparent about exactly how much renewable energy they use could help the UK to reduce its emissions.

Nicholas Rubin, market architect at Elexon said:

“Great Britain has committed to achieving a fully decarbonised power system by 2035. In order to accelerate this transition, Elexon is supporting initiatives that contribute toward decarbonising the power sector and achieving net-zero.”  

For the first time ever, energy users that use Granular’s management platform will be able to verify where their electricity is coming from on an hourly basis. On top of this, those taking part will be able to trade these hourly certificates bilaterally or on a centralised auction managed jointly by Granular and Nord Pool, to improve their level of hourly matching. The mechanism will also allow participation for storage, so that certificates can be stored and re-issued later.

It is hoped that these certificates combined with an exchange to trade individual hours will create an important price signal to drive investment in the technologies needed to reach a carbon-free grid.

Experts say that consumer demand will increase as they will be able to choose more renewable options. It is likely that this will lead to greater investment in renewables and in battery technology for more efficient storage.

Toby Ferenczi, a co-founder of Granular believes that consumers will be seeing this change by the end of the year.

He said:

 “Long term, what this is enabling is an acceleration towards a completely carbon-free grid as it is harnessing consumer spending power to source energy from carbon-free sources each hour. This drives investment in not just renewables but in energy storage and flexibility. Eventually customers will be able to buy green energy from their energy supplier by the hour.”

He went on to say that this method could allow people to get discounts on their energy bills.

 “It’s an incentive for load shifting and demand response so we want to provide a revenue stream for people who do that – renewable energy should be cheap when it’s in oversupply and more expensive when undersupplied, so it would give an incentive for consumers to shift their demand towards when it’s oversupplied.”