System-Level Impacts of Voluntary Carbon Free Electricity Procurement Strategies

Featured Speakers: Jesse Jenkins, Assistant Professor & Wilson Ricks, PhD Candidate, Princeton University About the Webinar: Voluntary procurements of carbon-free electricity are a popular avenue for corporate climate action, yet there is little available information regarding their impact on carbon emissions at the level of the entire electricity system. In this study we address this knowledge gap by using an electricity system capacity expansion planning model to assess the consequential, system-level impacts of voluntary carbon-free electricity procurements under multiple proposed strategies. These strategies include “volumetric matching,” which matches a participating consumer’s demand with new, locally sourced carbon-free generation on an annual basis, “temporal matching,” which does so on an hourly basis, and “emissions matching,” which uses voluntary procurements to eliminate a consumer’s emissions impact as measured via short-run marginal emissions accounting. We find that in the current U.S. policy environment, both volumetric and emissions matching strategies have zero or near-zero long-run impact on system-level generation mixes or carbon emissions. By contrast, temporal matching drives significant reductions in system-level emissions and incentivizes procurement of advanced clean firm generation and long-duration storage technologies that would not otherwise see market uptake. Electricity cost premiums for voluntary participants are near-zero under volumetric and emissions matching strategies and can exceed $20/MWh under temporal matching, but are reduced when a larger portfolio of advanced technologies is available for procurement. These outcomes are sensitive to changes in policy: while volumetric matching has near-zero impact under current federal and state policies, it is the most cost-effective means of incremental carbon mitigation in a scenario with a binding system-wide clean electricity standard.