Large energy buyers such as corporations and governments are embracing innovative strategies for decarbonization, including a new way of purchasing electricity so that every kilowatt-hour consumed is matched with zero emissions generation. This concept, known as 24/7 carbon-free energy or hourly matching, is gaining popularity as a way to advance the grid to 24/7 emissions-free electricity sources, avoid reliance on fossil fuels and reduce energy grid challenges that arise from too much demand, or too little clean energy supply at certain hours of the day. More energy buyers are committing to 24/7 carbon-free energy, driving new supply offerings, and accelerating the transition toward fully decarbonized grids. 

Researchers at Princeton University, McKinsey and Company, and the Technical University of Berlin have determined that hourly matching can drive the deployment of advanced, clean, firm energy resources and can lead to lower carbon emissions for both the buyer and the system. To date, more than 100 signatories have joined the 24/7 Carbon-Free Energy Compact. Signatories include energy buyers such as Johnson Controls and Rivian, energy suppliers such as AES and Constellation, governments such as the Icelandic and Scottish governments, as well as consultancies, investors, solutions providers and system operators.

While the practice has been called energy’s “hottest new trend,” 24/7 carbon-free energy can add complexity to the energy purchasing process. It is not the only way for corporations, cities or other energy users to decarbonize their electricity supply. For example, large energy buyers often purchase clean electricity on an annual volumetric basis or make purchasing decisions to maximize carbon emissions reductions.  

The momentum that 24/7 carbon-free energy has amassed across different sectors is offering both challenges and opportunities. New buyer commitments, electricity supply offerings, tools and data sources have emerged to support this new approach as it continues to take hold.

Solar panels on rooftops of large warehouses with the New York City skyline in the background.
Aerial photo of several warehouses with solar panel installations against the backdrop of New York City. Companies across the U.S. have committed to purchasing clean energy on a 24/7 basis in the next few years. Photo by Falcon video/Shutterstock.

Why and How Buyers Are Embracing 24/7 Carbon-free Energy

Fully decarbonizing electricity grids requires generating carbon-free energy when it is needed, not just during periods of abundant sunshine or wind. Large energy buyers can play a key role by investing in carbon-free energy technologies to fill gaps left by wind and solar generation and by managing their electricity demand to better align with when carbon-free energy is generated. Under 24/7 carbon-free energy purchasing approaches, buyers match their electricity usage with carbon-free supply around-the-clock typically using resources located on the same grid where the electricity is consumed. Some buyers have turned to this approach as the next step to drive decarbonization after having achieved 100% renewable energy purchasing goals on an annual basis.

This approach represents an end-state goal for electricity buyers, but it also offers a framework for assessing how and when to procure energy and shift demand​. It’s unlikely that buyers will be able to shift to perfect hourly matching of carbon-free energy overnight, but they can take incremental steps. They can begin by understanding the hourly electricity load profiles for their facilities and by exploring when and where their hourly clean energy purchases match — and don’t match — their facilities’ demand. Even without accessing actual hourly electricity load data from each of their facilities, buyers may be able to estimate their facility loads by extrapolating individual building load data or by using average hourly load profile data as a proxy.

Depending on which electricity market the buyer is in, the buyer may be able to contract directly with electricity suppliers to increase hourly carbon-free energy match. This could be achieved by diversifying their clean energy resource mix or by adding dispatchable assets like energy storage to their resource portfolios. Buyers can also explore measures for reducing or shifting their facility electricity loads to better align with their carbon-free energy generation profiles. Moving toward 24/7 carbon-free energy requires resources — data, tools, methodologies, and financial investment — but by identifying and implementing strategies for increasing hourly match over time, there may be budget-friendly ways to make progress.

Below we explore recent progress, market developments, and remaining challenges.

Corporations Taking the Lead

Recently, several corporations have entered into contracts to purchase clean energy on a 24/7 basis. Iron Mountain, a global storage and information management services company, recently declared a goal to achieve 100% renewable energy use around-the-clock. It partnered with the renewable energy provider RPD Energy on a series of deals to obtain 24/7 carbon-free energy for data centers and other facilities across nine U.S. states.

This follows earlier purchases by Google and Microsoft, who have both announced plans to match their entire electricity demand on an hourly basis with carbon-free energy by 2030. The companies have signed agreements with the independent power producer AES to supply their Virginia data centers with at least 90% 24/7 carbon-free energy. Google indicated it paid a modest premium for 90% carbon-free energy compared with undifferentiated retail power.

The company has also contracted with the energy solutions company ENGIE to supply 24/7 carbon-free energy for its European data centers and with the community choice aggregation agency Silicon Valley Clean Energy in California with carbon-free energy for its data centers there. It also forged an innovative agreement with Nevada Power Company, a subsidiary of the utility NV Energy, to provide Google with 350 megawatts of solar capacity and up to 280 megawatts of battery storage.

A data center in Virginia
Data centers, like this one in Ashburn, Va., demand large amounts of electricity. So, technology companies are entering into deals to switch to 24/7 carbon-free energy. Photo by Gerville/iStock.

Microsoft has entered a deal with the Swedish utility Vattenfall to match demand at three of its European data centers with 24/7 renewable energy. Microsoft has also partnered with the energy supply company Constellation on a 24/7 carbon-free energy software product, which includes an agreement for Microsoft to procure a portion of its renewable electricity supply from Constellation. In addition to helping decarbonize the grid, actions such as these taken by corporations can help illuminate a path forward for other energy buyers.

Commitments at the Federal Level Enable Further Progress

Federal agencies are making progress toward their goal of achieving 24/7 carbon-free energy. President Joe Biden signed Executive Order 14057 in 2021, requiring all federal agencies in the U.S. to purchase 50% carbon pollution-free electricity on an hourly basis by 2030. To help meet the goal, this year, the U.S. General Services Administration issued its second RFI to solicit additional information from industry about procurement options and strategies for reaching the federal government’s carbon pollution-free electricity goals.

This follows a November 2022 Biden administration announcement of a Memorandum of Understanding (MOU) between the U.S. General Services Administration and the electric utility Entergy Arkansas to advance the U.S. Government’s carbon-pollution free goals for federal agencies in Arkansas. Under the MOU, Entergy Arkansas plans to develop a cost-competitive 24/7 carbon-free energy tariff, which will be available to public and private Entergy Arkansas customers alike. If the tariff is approved, it will pair existing nuclear power generation with new carbon-free energy resources. 

Recently, the U.S. Department of Energy announced an MOU with Xcel Energy to provide federal facilities in Colorado with carbon-free energy by 2030. Under the MOU, the U.S. Department of Energy and Xcel Energy will develop a roadmap, which will result in federal facilities in Colorado being supplied with at least 50% carbon-free energy on a daily basis.

Momentum at the Local Level

Wind turbines rise above farmland in Iowa
Windmills against the backdrop of a farm in Iowa. Three cities in Iowa are committing to 24/7 carbon-free energy by 2035. Photo by Jan-Ake/iStock.

Cities across the globe have also begun exploring 24/7 carbon-free energy. In the U.S., three cities in Iowa – Des Moines, Waterloo and Windsor Heights – as well as South Lake Tahoe, Calif., and Ithaca, N.Y., have all passed resolutions committing to 24/7 carbon-free energy by 2035 or earlier. WRI has supported a number of cities with implementation and has developed resources for those pursuing hourly matching.

Peninsula Clean Energy, a community choice aggregation agency that provides electricity to about 765,000 people in California, has set a goal to deliver 100% 24/7 renewable energy by 2025. Recently, the community choice aggregation conducted modeling that demonstrated cost-competitive pathways to achieve its goal. Notably, the analysis found that achieving 99% time-coincident renewable energy would result in a 2% cost increase relative to its baseline scenario, and that 90% annual matching would be cost-effective. These findings could have promising implications for cities and other community choice aggregations in the U.S. looking to pursue 24/7 carbon-free energy.

Utilities Have Begun Developing 24/7 Carbon-free Energy Supply Products

In addition to Entergy Arkansas and Nevada Power, other regulated electric utilities have begun advancing 24/7 carbon-free energy products. The investor-owned utility Georgia Power Company was granted regulatory approval to pursue a 24/7 carbon-free energy subscription service for corporate power customers in its service territory. Georgia Power Company plans to procure 650 megawatts of new renewable resources along with battery storage resources for its 24/7 carbon-free energy subscription service, which will be made available to large commercial and industrial customers in 2028. Eligible customers will be able to subscribe in 100-megawatt blocks or less on a set daily schedule or on a timetable where the battery resource is dispatched to serve both customer and grid needs.

Additionally, Duke Energy proposed new 24/7 carbon-free energy offerings for its North Carolina and South Carolina commercial and industrial customers. The utility’s proposals would also allow corporate customers to contract for up to 100% of their energy demand from third-party renewable energy providers connected to Duke Energy’s grid. Duke Energy’s proposal is awaiting approval from regulatory commissions in both North Carolina and South Carolina.

New Energy Data Sources and Tracking Tools

The push toward 24/7 carbon-free energy has introduced a host of new energy platforms and data and tracking services. Accurate data underpins the baselining, goal setting, measurement and tracking needed to make progress. Large energy buyers moving toward this approach must understand their electricity load and the carbon intensity of their grid’s electricity mix on an hourly basis, as well as that of their electricity purchases.

A number of companies offering data solutions have also emerged. Some, such as Electricity Maps, provide free real-time data on electricity sources and carbon intensity for various grid regions across the globe. FlexiDAO, another data solutions provider, offers a free carbon-free energy scoring tool to calculate the percentage of an energy buyer’s electricity consumption that matches carbon-free energy generation on an hourly basis. Others, such as Cleartrace and Powerledger, leverage blockchain technology to track and manage their clients’ clean energy transactions.

Verifying and tracking hourly clean energy transactions is also important. The Midwest Renewable Energy Tracking System, a nonprofit organization that issues and tracks renewable energy certificates (RECs), was the first to provide verification for hourly REC transactions in the U.S. PJM Environmental Information Services, a subsidiary of PJM Interconnection, recently followed suit, announcing that its Generation Attribute Tracking System REC trading platform will soon launch hourly, time-stamped certificates. Other tracking systems in the west and New England are also reportedly working to enable hourly REC trading.

These hourly REC trading platforms build on and conform to the standards set forth by EnergyTag, a nonprofit with a mission to define and build a market for hourly energy certificates. These efforts to develop and operationalize standards for tracking and trading time-based clean energy attributes can help make 24/7 carbon-free energy more actionable for energy buyers.

What's Next for 24/7 Carbon-free Energy?

Twenty-four seven carbon-free energy is gaining steam, but there is still much work to be done to make the approach accessible to more purchasers. Expanding its reach will require a concerted effort, including:

  • Buy-in and understanding from a large array of actors. 24/7 carbon-free energy has momentum, but it is still niche. Achieving 24/7 carbon-free energy requires a level of market knowledge and sophistication that may be unattainable for many smaller buyers. More readily available product offerings from electricity suppliers and utilities are needed to enable a broader range of customers to participate. 
  • Accessible and standardized hourly customer data. Customers need easier access to their hourly energy consumption data to understand how their energy use aligns with clean energy and how they can better transition to 100% carbon-free energy for the entire grid.
  • Easier ability to verify and track hourly transactions. Most industry players still track renewable generation annually. Moving to hourly tracking injects new complexity and traceability challenges, which can be addressed through more granular data in energy attribute tracking systems.
  • New technology. Aspirations of 24/7 carbon-free energy hold promise to help drive new technologies that can help enable grids to shift to 100% clean energy. While many of these technologies are still at a premium, product offerings could increasingly incorporate new clean, dispatchable technologies.

Considering the time element of when we generate and use clean energy becomes more important as we transition to a 100% carbon-free energy grid. The hour for addressing hourly use of clean energy is now.  

Note: Google, Microsoft and Constellation, which are referenced in this article, are members of WRI's Corporate Consultative Group (CCG) and support WRI work. WRI's 24/7 carbon-free energy work is funded by Google. All article content reflects the independent views of the authors.