To tackle greenwashing energy tariffs and accelerate the decarbonisation of the power system, carbon should be tracked through the electricity system in real time.
A new report produced by new zero innovation centre Energy Systems Catapult (ESC) and electricity market Balancing and Settlement Code (BSC) manager Elexon has argued that carbon should be tracked from the generator to the consumer.
Accurately Tracking Carbon in Electricity Markets sets out how the energy industry could create common rules, standards and processes to measure, track, report and verify the carbon content of the electricity in the network.
“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,” said ESC, senior policy and regulation advisor, Sarah Keay-Bright.
“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. This could open up significant opportunities to align power market reform with the implementation of ambitious net zero carbon policy, as well as responding to increasing consumer demand for zero carbon electricity – ridding the market of greenwashing tariffs.”
In the report, the ESC and Elexon have called on policymakers to carry out studies to assess the feasibility for measuring and reporting carbon emissions in the electricity system. This should include exploring a range of options for measurement and the approaches to reporting between actors and associated parties.
They have recommended that a detailed assessment of the current electricity system is carried out, to understand pathways to granular carbon data measurement. This would allow reporting in the future to be built on existing rules and processes as well as implementing new approaches, and could include learning from international best practice.
Policymakers should look to establish a coordinated approach to data tracking, working within innovative initiatives that are already working in the area. Finally, they should ensure data development, management and governance follows best practice, building on the Energy Data Taskforce’s recommended principles.
Angela Love, director of future markets and engagement at Elexon said: “As it stands, the existing industry rules that govern the retail and wholesale electricity markets do not require consistent and widespread carbon emissions tracking and reporting. However, we believe that established rules, processes and systems that support the power system may be easily extended to support carbon tracking. This is likely to be more cost effective than building entirely new processes and systems.”
Accurately Tracking Carbon in Electricity Markets has been produced in response to the Department for Business, Energy and Industrial Strategy launching an investigation into new options to tackling greenwashing in August. This is to have a specific focus on Renewable Energy Guarantee of Origin (REGO) certificates.
REGOs were established in 2003 as a system to encourage the growth of renewable energy, and involve certificates being issued per MWh of eligible renewable output being provided by generators, which can then be sold to electricity suppliers and offtakers.
While it has been relatively successful in creating strong demand for renewable electricity, according to ESC, it has recently been attracting criticism for not accurately tracking the attributes of a given unit of renewable energy from the generator to the consumer.
Supplier Good Energy has been one of the most vocal critics of the REGO system, and teamed up with ScottishPower in May to call for regulatory reforms to close “loopholes” in the energy retail market that allow for greenwashing.
You can read the full Accurately Tracking Carbon in Electricity Markets report here.