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A letter from Day 2 of New York Climate Week.
On geothermal research, Solar for All, and a Monster El Niño
A new analysis by a one-time atomic energy opponent makes a bull case for big reactors.
Greenhouse gas pollution could drop by half a percent this year, according to a new analysis.
The administration told a federal court that it has a “new analytical methodology,” hence the continued delays.
CleanCounts is announcing new hourly matching credits, among other “enhancements.”
Renewable energy certificates, or RECS — the credits that companies buy in order to make claims that their operations “run on renewable energy” — are getting more sophisticated.
CleanCounts, a nonprofit that runs one of the biggest registries for RECs in North America, announced on Wednesday that it now has the capability to issue certificates tied to the exact hour the renewable energy was produced, opening the door to more reality-based clean energy claims. For companies that want to match their renewable energy purchases to the hours when their factories and stores are actually consuming power, “that was a critical piece of infrastructure that was missing,” Benjamin Gerber, the CEO of CleanCounts, told me.
The company also announced “additional enhancements” to its registry that will enable a wider range of new REC products, from certificates tied to “pollinator-friendly solar,” to projects owned by indigenous Tribes, to “low-impact hydropower” projects that mitigate harm to fish. Gerber said he thinks having a system to track and verify these benefits will help companies tell a different story about the infrastructure they are building, and in so doing help turn the tide of public support.
Traditionally, a REC represents a megawatt-hour of electricity that has been generated by a renewable energy source such as wind, solar, geothermal, or moving water. The generator records every megawatt-hour it produces with a registry like CleanCounts, which issues certificates; companies then buy these certificates, either in advance under power purchase agreements or after the fact in the spot market. The registry then “retires” the certificates once the REC buyer chooses to “use” it to make a clean energy claim. Registries ensure that nobody is counting the same megawatt-hour more than once.
Today, a lot of corporations simply match their annual energy consumption with certificates. If they anticipate consuming 100 megawatts, they might buy 100 megawatts of solar RECs — even if their factories operate at night — and then claim they “run on 100% renewable energy.” Critics argue these types of claims mislead the public and tip the scales toward the cheapest renewable sources — i.e. solar and wind — rather than those that can generate energy in the off-hours, such as batteries, geothermal, and nuclear. Many clean energy advocates want to see companies move toward making more specific claims about the number of hours they run on renewable energy.
Google got behind this idea several years ago, pledging to match its consumption with clean energy on a 24/7 basis. CleanCounts piloted a method with Google to issue the company hourly RECs, but to do so it had to basically reverse engineer the certificates, embedding data regarding the time the energy was produced after the fact. That made it complicated to true up a company’s energy consumption data with its REC purchases and say, “we covered X number of hours with clean energy.”
Now, CleanCounts will be able to specifically issue a credit for “1 megawatt-hour produced Wednesday, September 16, at 9:00 a.m.,” for example, making it far easier for companies to adopt an hourly matching strategy.
“Instead of breaking it apart, they're basically issuing it as an already granularized tradable certificate,” Alex Piper, the head of policy at EnergyTag, a nonprofit that advocates for hourly matching, told me. “Which is what is new and exciting, and opens the door for more liquid transactions and a broader and more impactful marketplace.”
Hourly matching is not exactly popular in the corporate sustainability world. A lot of companies and sustainability consultants argue that accounting for their energy on an hourly basis will be too complicated, too expensive, and ultimately crater the corporate clean energy market. Corporations are in a showdown with EnergyTag and other proponents of hourly matching to convince the Greenhouse Gas Protocol, a nonprofit that sets standards for corporate carbon accounting, of their case.
The new CleanCounts product solves at least one of those challenges, making hourly clean energy procurement much simpler.
That might also reap benefits in the form of consumer trust. New polling from EnergyTag and YouGov found that Americans tend to agree that companies shouldn’t claim to use solar at night. When asked, “When should a company count as a clean energy user?” 45% of respondents selected “only when their clean energy supply matches the hours they actually use electricity,” while 22% chose “when their clean energy averages out over the year (i.e. daytime solar covering nighttime usage.)” Just under a third of the 1,292 respondents selected “don’t know.”
Even if companies start buying hourly RECs, however, another challenge will be figuring out how to tell their customers, most of whom have no idea what a REC is. For years, companies have simply advertised that they are 100% renewable. What will it take to convince customers that actually, “We use clean energy about half the time we operate” is a more laudable claim?
Google, Nvidia, and Emerald AI are founding members.
Nvidia, Google, and data center software startup Emerald AI are teaming up to lead the AI Energy Management Alliance, a trade group dedicated to promoting flexible load for AI data centers, the organizations announced on Wednesday.
“There are a lot of AI trade associations, data center trade associations, energy trade associations. This is the only one that is laser focused on flexible AI data centers,” Varun Sivaram, founder and chief executive of Emerald AI, told reporters in a briefing earlier in the week.
The group represents the evolution of an older trade association, the Advanced Energy Management Alliance, which was founded in 2014 and advocated for demand response for large electricity customers. Energy policy veteran Frank Lacey will lead the reconstituted group, which will also include other energy and AI heavyweights among its members, such as Anthropic, NRG, and Constellation Energy.
The pursuit of policies and technologies that can enable data centers to reduce their draw on the grid during moments of peak demand has been something of a holy grail for energy policy practitioners and hyperscalers like Google. That’s because much of the cost of building out and maintaining the grid — including greenhouse gas emitting gas-fired powered plants — is for meeting those peak hours.
“The savings to consumers if we had effective flexibility is enormous,” Abraham Silverman, former general counsel at the New Jersey Board of Public Utilities and assistant research scholar with the Ralph O’Connor Sustainable Energy Institute at Johns Hopkins University, told me. (He is not involved with the alliance.) “It’s when you get up to the hottest or coldest day of the year that you need that extra transmission line or need to build a new one,” which then drives up costs for everyone, Silverman said.
A recent Johns Hopkins analysis of the grid operator PJM Interconnection, which covers large portions of the Mid-Atlantic and Midwest, found that “requiring data centers to accept occasional power interruptions saves over $15 billion per year.”
State and local regulators have shown openness to a variety of approaches that could get data centers on the grid faster while minimizing impact on the grid. “Just about every state has some either legislative or regulatory process for looking at this,” Silverman said.
The case for flexibility picked up steam last year thanks to an academic paper co-authored by energy systems expert Tyler Norris, who at the time was a researcher at Duke University’s Nicholas School of the Environment and is now Google’s head of energy market innovation. Norris argued that much of AI data center electricity demand could be served by the existing grid with modest flexibility.
“The limiting factor for new digital infrastructure isn't capital or silicon; it's power,” Norris told the reporters during the briefing. “But the biggest near-term barrier isn't a lack of electricity. Multiple studies have found that if new loads are able to reduce their draw from the grid for a small fraction of the year — less than 100 hours during peak periods — we can add dozens of gigawatts of new load to the existing U.S. power system.”
Google says it has 1 gigawatt of demand flexibility integrated into its existing utility contracts, while Emerald, which recently fetched a valuation of just over $1 billion, is working on a 100-megawatt data center with Digital Realty and Nvidia in Virginia. That facility “is intended to demonstrate a model that future AI factories around the world can adopt,” Josh Parker, the head of sustainability at Nvidia, told reporters on the call.
“What we want to do is to better utilize that infrastructure,” Parker added. “Every watt wasted is a watt that could have been used to generate tokens, which could lead to life-saving treatments, or economic productivity, or even energy efficiency in other sectors that dramatically improve our sustainability outcomes.”
The effort is especially noteworthy because it explicitly seeks to make building data centers easier amidst mounting and diffuse skepticism from the communities that may host them and the public as a whole. Part of the case for flexible load is to solve for the mounting utility bills widely predicted to accompany AI’s expansion.
“The real goal,” Sivaram said, is “more community-friendly and grid-friendly data centers — data centers that are good grid citizens all across the country.”
Concern over the energy system’s ability to meet the demand from AI has reached the federal level. In June, the Federal Energy Regulatory Commission asked the six large independent power markets to come up with reforms to help protect the grid and consumers from the huge predicted rise in demand from data centers. Those include coming up with “new transmission services to reflect large load flexibility,” as FERC Chair Laura Swett put it. A trade group focused on flexibility could push forward these conversations in a coordinated way, ideally bringing together state and federal regulators, Silverman told me.
Right now, any effort to reform data center interconnection tends to ping pong back and forth between states, the federal government, and the regional transmission organizations, with major players trying to have their case heard at whatever level they think will be most favorable to their interests. For example, Microsoft is contesting a Virginia rule over data center cost allocation, claiming it stands to get in the way of federal rules.
“This new trade association could be very helpful in bringing together the companies for whom flexibility is a competitive strength and give them a voice,” Silverman told me.
