Plugged In Podcast: Exploring Clean Energy Products for Scope 2 Needs
As the energy sector evolves in this technology-driven world, businesses are under increasing pressure to reduce their carbon footprint and meet sustainability goals. One of the key challenges they face is how to effectively purchase carbon-free energy products to address their Scope 2 emissions. Once commercial and industrial energy buyers understand the energy mix in their specific market, investing in the right solutions can help them make informed decisions to support their sustainability goals.
The Importance of Carbon-Free Energy Commitments
Many companies have committed to being 100% covered by carbon-free energy by a specific date, such as 2030. This means that for every electron they use, they will procure one new electron of carbon-free electricity to cover it. To achieve these commitments, the first step is considering the dynamics of different energy markets.
Understanding Energy Markets
Every energy market is unique, with different sources of electricity, market rules, geographies, and climate and weather patterns. Recognizing these differences is crucial for companies looking to make informed decisions when purchasing carbon-free energy products that align with their sustainability goals.
The chart below shows the estimated annual grid mix by ISO region and can help businesses identify the energy landscape in different markets. This mix can vary over time based on factors such as demand, weather conditions and changes in energy production. For instance, ERCOT relies heavily on natural gas and wind, while PJM has a significant portion of its electricity generated from natural gas and nuclear power. MISO, on the other hand, has a more balanced mix with substantial contributions from natural gas, coal, wind and nuclear. The grid mix data can be used to help define your goals around carbon-free strategies, allowing each customer to determine what’s best for its needs.
| Source | ERCOT | PJM | MISO |
|---|---|---|---|
| Natural Gas | 44.8% | 43.2% | 35.78% |
| Coal | 13.9% | 14.5% | 25.95% |
| Nuclear | 9.13% | 32.83% | 13.03% |
| Wind | 24.12% | 3.54% | 13.61% |
| Solar | 7.12% | 1.15% | 0.94% |
| Hydro | 0.07% | 1.85% | 1.48% |
Carbon-Free and Renewable Energy Solutions
As businesses strive to reduce their Scope 2 emissions, implementing the right mix of carbon-free and renewable energy solutions can significantly advance sustainability goals. Customers can choose from any combination of these key solutions:
- EFECs and RECs: RECs represent the emission-free attributes of one megawatt hour (MWh) of electricity generated by a renewable energy resource, such as wind or solar. Investing in RECs or EFECs allows businesses to quickly indicate their commitment to sustainable practices.
- Offsite Renewables: Constellation Offsite Renewables (CORe) enables customers to integrate local offsite renewable energy purchases with a retail power supply contract. This includes integrating renewable energy purchases from existing renewable generation, including solar and wind facilities, into a load-following energy supply agreement or supporting the development of new renewable energy assets on their regional grid.
- Hourly Carbon-Free Energy Matching: Hourly carbon-free energy matching is an innovative solution that pairs electricity use with a local emission-free energy source on an hourly basis. This method goes beyond other net-zero programs by providing a more precise and impactful way to achieve sustainability goals. By using hour-by-hour regional tracking, businesses can ensure that their energy use is matched with clean energy sources in real-time.
Learn More with Our Podcast
To gain more insights into the energy sector, listen to our podcast, Plugged In: Exploring Energy, hosted by Chuck Hanna, Vice President of Solutions and National Accounts at Constellation. In the second episode, we expand on the topics covered here and discuss additional subjects with Adrian Anderson, General Manager of Carbon-Free Electricity, Renewable Energy & Carbon Dioxide Removal at Microsoft. We dive into the importance of data in energy management and sustainability, investments in carbon reduction and innovation, the challenges and strategies around Scope 3 emissions, and the collaboration with utilities to support a sustainable future. Tune in to our series for valuable insights and stay updated on the future of energy.
By addressing these challenges and offering custom solutions, Constellation is leading the way in the transition to a sustainable and reliable energy future. Join us on this journey and discover how we can help you achieve your energy goals.
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