While much of the media conversation has been dominated by headline-grabbing claims about the high cost of energy and the impossibility of renewables offering grid stability, a quiet but powerful revolution has been taking place which is capable of better aligning incentives and re-invigorating the transition.
It is called a MESA. Or rather, a Matched Energy Services Agreement that makes the simple sourcing of renewable energy possible. Its arrival is paving the way for Australia to power itself with carbon-free energy around the clock. EG Funds (EG) has led the way, using a MESA to facilitate time matched renewable energy across five Sydney commercial office assets.
A MESA addresses the problem that solar and wind are intermittent sources of power. And creates market incentives to shift – where possible – our demand for energy away from times when the sun is not shining, and the wind is not blowing.
A MESA solves a problem created by current corporates’ approach to buying renewable energy.
The present approach depends on Renewable Energy Certificates, or RECs, which certify that 1 MWh of electricity has been generated by solar/hydro/wind facilities. These RECs are treated like carbon offsets, allowing some corporates to treat energy generated from fossil fuels as “renewable” provided they procure an equivalent number of RECs. This means that energy used at 6pm in the Victoria winter – often comprised of 60% brown coal, the most polluting fossil fuel – can be offset by RECs generated six months previously, at midday during the sunny South Australian summer.
This status quo limits the incentives for energy users to actually match renewable energy demand to supply. This lack of alignment can harm the broader transition, creating false impressions of progress amidst perverse incentive structures.
Until now. Until a MESA.
Built on new technological breakthroughs and aided by regulatory tailwinds, a MESA time-matches renewable energy demand to supply every 30 minutes, providing a granular understanding of exactly how much renewable energy we are using. Time-matching means that if we want to claim we were using renewable energy at 4.30pm, we must link our use to renewable energy supply. And then again at 5 pm. And at 5.30 pm. And so on.
Rather than making annual claims of “100% renewable energy” a MESA allows leading businesses like EG to articulate exactly how much renewable energy an asset has consumed over the last 24 hours. This allows EG to transparently report daily values as high as 85% and as low as 4%, dependent on seasonal variance, cloud coverage and both how much and when, our buildings are using energy.
For example, yesterday, 60 Carrington St – a Sydney Office tower – was able to secure 64% of its energy requirements from matched, solar energy.
This shift away from “100% renewable energy” targets (achieved via RECs) towards a new industry standard termed 24/7 Carbon Free Energy is being led by Google and Microsoft.
Google even authored a Policy Roadmap for 24/7 Carbon Free Energy, with the EU’s third Renewable Energy Directive encouraging, and the US’s green hydrogen regulations mandating the adoption of time-matched renewable energy use.
The wheel is even turning in Australia, with the government’s consultation in time matched RECs acknowledging that “electricity grid decarbonisation will be faster if Australia incentivises projects that support 24/7 renewable energy.”
Voluntary Corporate standards are also shifting, with the GHG Protocol and RE100 Frameworks expected to adopt time-matched RECs in the future, acknowledging their “high impact, capable of developing a more robust renewable grid”.
This is a future that is happening now.
EG is proud of this market-leading approach, with its industry first MESA representing a radical innovation in renewable energy procurement. This is leadership that is here today for any organisation wanting to source granular, transparent renewable energy. The sooner more organisations take advantage of the MESA, the sooner the energy transition, grid stability and the lower energy cost for all Australians will become a reality.
Author: Ian Lieblich is the Head of ESG at EG Funds and drives the company’s industry leading Real Zero Carbon Strategy.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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