Renewables transaction company LevelTen Energy has set up a marketplace for time-based energy certificates, aimed at supporting 24/7 renewable energy commitments.

The GC Trading Alliance, supported by Google, Microsoft, and others, will be a platform to exchange "granular certificates" that verify the time and place where carbon-free energy is generated.

GC Trading Alliance LevelTen Energy
LevelTen graph illustrates the mismatch between demand, and carbon free capacity – LevelTen Energy

The Alliance's platform is being set up with the Intercontinental Exchange (ICE), a US financial exchange operation company.

Channeling investment to clean energy

"To say this is an exciting moment is an understatement," said LevelTen CEO Bryce Smith in a blog. "This platform will provide market signals that will optimize the dispatch of existing carbon-free generation, and fuel investments in new assets that current market signals do not reach."

The move is designed so energy buyers can source carbon-free energy around the clock, and energy sellers are incentivized to provide that energy, either through new generation or storage of energy generated at times of low demand.

Alliance members, including AES, Constellation, Google, and Microsoft, will be the first customers on the platform, and hope it can be scaled to accelerate energy transition.

Hyperscale data center operators have been among the leaders in buying clean energy, and have boosted the markets for Renewable Energy Certificates (RECs) and Power Purchase Agreements (PPAs) which pay for energy generation.

Corporate buyers are now the major driver for additional clean energy added to the US grid, according to the Clean Energy Buyer Association, reports Utility Drive.

However, PPAs and other mechanisms normally pay for an annual production of energy from intermittent renewable sources, which doesn't match the actual energy consumed around the clock by the PPA purchasers.

Initiatives such as EnergyTag aim to create 24/7 carbon tracking, which identifies when and where carbon-free energy is generated. These “granular certificates” potentially allow consumers to properly match their consumption with clean energy purchases.

The GC Trading Alliance promises to provide an online platform to track and trade these GCs to fill gaps in generation more easily. It should benefit generators and large consumers, and also provide a route for financiers to invest in effective clean energy production.  

LevelTen hopes that GCs will be worth more than undifferentiated annual Energy Attribution Certificates and that the platform will be profitable.

Bryce also says he hopes regulations around renewable energy use will adopt the concept of granular certificates and 24/7 matching, at which point platforms like the GC Trading Alliance would become a useful tool to meet government demands.

"As industry-wide support coalesces around GCs, it will take a vibrant ecosystem of partners to support GC market development and deliver environmental legitimacy at scale," said Smith.

"Accomplishing this will require a user-friendly platform that delivers standard contracts and price transparency while providing settlement, delivery, and tracking functionality. In other words, a transparent market for verified GCs."

Maud Texier, Google's global director of clean energy and decarbonization, welcomed the platform: “We're excited to participate in this initiative to help develop a new market for hourly clean energy purchasing and trading.

"This is a critical step in creating the market signals we need to fully decarbonize electric grids, and make it easier for clean energy buyers to maximize the impact of their procurement by purchasing clean energy on a local and hourly basis.”

Microsoft's general manager for renewables and carbon-free energy, Adrian Anderson, said the initiative would create "an hourly price signal," which he said was "important for driving investment in assets that deliver carbon-free energy in the right place, at the right time.”

The GC trading platform is expected to launch in 2024 on ICE.