On the means, costs, and system-level impacts of 24/7 carbon-free energy procurement

Overview

A growing number of public and private energy buyers are interested in 24/7 carbon-free energy procurement, meaning every kilowatt-hour of electricity consumption is met by carbon-free sources at all times. It has the potential to overcome limitations of established procurement schemes, such as the temporal mismatch between clean electricity supply and buyers' demand inherent to 'volumetric' matching. The buyers are 10% of commercial and industrial demand in Ireland, Denmark, Germany and Poland, modelled for 2025 and 2030. Modelling assumptions: flat baseload buyer demand, no demand flexibility, procured assets additional and in the local bidding zone, excess CFE sold to the grid capped at 20% of annual buyer demand, and 3-hourly time resolution.

Ireland 2025 base case: buyers on grid-only supply have an emission rate of 177 gCO2/kWh; 100% annual RES matching lowers this to 60 gCO2/kWh, and 100% 24/7 CFE reaches zero; 24/7 targets above 85% beat annual matching on emissions. The share of hourly demand actually met by CFE is 54% in the grid-only reference case and 83% under 100% annual RES matching, so annual matching does not deliver hourly clean supply. To supply a 220 MW flat load, 100% annual RES matching procured 1.3 GW of wind plus solar, while 100% hourly CFE needed up to 4.0 GW; batteries enter the cost-optimal portfolio only above an 85% CFE target.

With wind, solar and batteries only, 80-95% CFE targets carry a small premium over 100% annual matching; a 98% target costs 54% more than annual matching and the last 2% more than doubles costs. Adding long-duration storage (hydrogen in salt caverns, storage cost assumed 2.5 EUR/kWh) cuts the 100% CFE premium to 42% above annual matching, and also adding clean firm generation (Allam cycle with CCS or an advanced dispatchable generator) cuts it to 15%. A 100% 24/7 CFE commitment by 10% of Irish C&I demand reduced Irish power-sector emissions by 0.6 MtCO2/a (14% of 4.2 MtCO2/a) in 2025; in Germany, 100% RES cut national emissions by 11.1 MtCO2/a and 100% CFE by up to 14 MtCO2/a.

Reference-case buyer emission rates are 240 gCO2/kWh in Germany and 549 gCO2/kWh in Poland for 2025; the local-zone emission reduction from 100% CFE ranges from 571.6 kgCO2/a per MWh of participating demand (Poland 2025) down to 3.7 (Denmark 2030). Limits: flat demand with no flexibility, the assumption that procured assets are additional, and 3-hourly resolution; results are for these four countries and the model assumptions.

Key points

1. Ireland 2025 base case: buyers on grid-only supply have an emission rate of 177 gCO2/kWh; 100% annual RES matching lowers this to 60 gCO2/kWh and 100% 24/7 CFE reaches zero; 24/7 targets above 85% beat annual matching on emissions.
2. Share of hourly demand actually met by CFE: 54% in the grid-only reference case and 83% under 100% annual RES matching (Ireland 2025); annual matching does not deliver hourly clean supply.
3. For a 220 MW flat load, 100% annual RES matching procured 1.3 GW of wind plus solar while 100% hourly CFE needed up to 4.0 GW; batteries enter the cost-optimal portfolio only above an 85% CFE target.
4. With wind, solar and batteries only, 80-95% CFE targets carry a small premium over 100% annual matching; a 98% target costs 54% more and the last 2% more than doubles costs.
5. Adding long-duration storage (salt-cavern hydrogen, 2.5 EUR/kWh) cuts the 100% CFE premium to 42% above annual matching; also adding clean firm generation cuts it to 15%.
6. A 100% 24/7 CFE commitment by 10% of Irish C&I demand reduced power-sector emissions by 0.6 MtCO2/a (14%) in 2025; in Germany, 100% RES cut national emissions by 11.1 MtCO2/a and 100% CFE by up to 14 MtCO2/a.
7. Reference-case buyer emission rates are 240 gCO2/kWh in Germany and 549 in Poland for 2025; local-zone emission reduction ranges from 571.6 kgCO2/a per MWh of demand (Poland 2025) to 3.7 (Denmark 2030).
8. Modelling assumptions: flat baseload buyer demand, no demand flexibility, additional assets in the local bidding zone, excess CFE sales capped at 20% of annual demand, 3-hourly resolution.

Using it in design

• In a data-centre renewable procurement strategy, weigh that annual volumetric matching does not deliver hourly clean supply (54% to 83%) and that 85-95% hourly CFE targets cut emissions more at a relatively small premium.
• In the procurement plan compare the wind and solar capacity needed for 24/7 CFE (up to 4.0 GW instead of 1.3 GW for a 220 MW flat load) and the cost effect of batteries, long-duration storage and clean firm generation (the last 2% more than doubles cost).
• Note the carbon-accounting target rests on the assumption that data-centre load is flat baseload; results change if there is flexibility.

Who should read it

Energy and sustainability planners evaluating 24/7 carbon-free energy procurement strategy and cost for data centres.

Document contents

1. 1 Introduction
2. 2 Methods and experimental design
3. 3 Results (3.1 Base scenario, 3.2 Technology access, 3.3 Diverse grid locations, 3.4 Advancing five years forward)
4. 4 Discussion
5. 5 Conclusion and Policy Implications

Related standards

• GHG Protocol Scope 2 Guidance

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Publication details

Authors

Iegor Riepin; Tom Brown

Publisher

Energy Strategy Reviews (Elsevier BV)

Year

2024

Document number

arXiv:2403.07876

Volume

54

Pages

101488

Document language

English

Source type

Scientific

Access

Open licence — downloadable

DOI

10.1016/j.esr.2024.101488

Licence

CC BY 4.0 — share with attribution

Licence evidence

arxiv.org

Citation