A new registry for clean energy credits could boost the grid value of DERs

For companies hoping to purchase clean power credits, their options are largely limited to utility-scale solar and wind projects. Distributed energy resources, despite their growing role on the grid, have so far been absent from the marketplaces where a growing number of buyers go to find credits. That is, until today.

• The top line: WattCarbon said its new Energy Attribute Tracking System, or WEATS, is the first marketplace and Energy Attribute Certificate registry that includes DERs. The system is specifically geared toward enabling buyers to move from annual to hourly matching — crucial for ensuring that corporate electricity purchases actually bring down emissions, per a recent study. 
• The market grounding: Corporations have played a huge role in the development and deployment of clean energy; between 2008 and 2023, tech companies and other corporate buyers signed power purchase agreements for nearly 150 gigawatts of clean power. And large companies from Google to Mitsubishi are beginning to commit to 24/7 matching of their electricity consumption with carbon-free production, and several are working on developing their own platform to trade the so-called granular certificates that they’ll need. However, that system won’t include DERs, which have so far represented a hole in the EAC fabric.
• The current take: According to McGee Young, CEO and founder of WattCarbon, the company’s new platform will address an “energy equity issue”: namely that no system has previously tracked or traded the environmental benefits associated with participating in grid response programs. “Fundamentally, we wanted to build a system of record that would allow DERs to participate on an equal footing with traditional wind and solar so that we can help tap into those resources as part of a transition to a 100% carbon-free grid,” he said.

Traditionally, only utility-scale generation that produces at least 1 megawatt-hour has been quantified by EACs, even though DERs play an increasingly large role in electricity generation systems. 

And while utility-scale renewables are growing quickly, Young said there’s a growing recognition that other kinds of decarbonization are also crucial. There’s a transition underway, he added, from a focus on procuring wind and solar power, to also considering questions like how we install more heat pumps, batteries, or rooftop solar. 

Many states have put in place tradeable certificate programs for solar generation, but those credits do not value the time and location for the solar electricity delivered to the grid.

“That requires us to rethink a couple of core assumptions that we've made about how we value distributed energy resources,” Young said. “Today, it's mostly for their energy value…We might do energy efficiency to save money on our bills, but the environmental benefits associated with that are largely lost. We don't have any systems in place for tracking the environmental attributes that might be associated with participating in a grid response program.” 

Last fall, WattCarbon ran a pilot to test if and how to create EACs from DERs and track carbon emissions, all at the watt-hour level of granularity. Working with DER providers like Leap, Solar Holler, and BlocPower, they found it was possible; all WattCarbon lacked was a platform on which to register the resulting clean energy assets in a way that was scalable and accessible. 

So, they built one. WEATS, which goes live today, lets an end user register a device — perhaps DERs like solar panels or heat pumps — that is then authorized by their energy provider. Metered or modeled generation data is then monitored and analyzed by the provider before eventually becoming an EAC that the customer can retire, transfer, or sell on WEATS’ marketplace. The platform takes in energy attributes from the provider and energy price from the customer and spits out the energy’s resulting value in the form of an EAC that can then be listed and sold for whatever the seller thinks the market will bear — kind of like a clean energy Craigslist.

WEATS enables buyers large and small to access every detail of the energy generation that led to the creation of a certificate, such as carbon intensity, the emissions impact, location, and time of day. Companies are then able to determine the best times and places to buy clean power, driving concrete emissions reductions.

WattCarbon isn’t the first company pushing for more granular monitoring. 

Backed by Google, Microsoft, and Level10, the Granular Certificate Trading Alliance was created in December to advocate for renewable energy credits that include clean energy generation type, location, and time, specifically to facilitate the hourly matching that the corporations are angling for. Separately, the startup Granular Energy provides utilities with software that develops hourly clean energy certificates and 24/7 PPAs.

While this move to hourly matching is ultimately the best way for companies to know for sure that their purchases have an impact, per a recent Princeton study, Young said he expects that those companies pursuing a 24/7 clean energy strategy ultimately will turn to DERs to fill the gaps, just as utilities are beginning to do.

But WattCarbon isn’t just targeting those big fish, which do the bulk of their purchasing via power purchase agreements. The users of the on-demand marketplace could be anyone from individuals to large corporations. And part of the appeal of incorporating DERs, Young said, is that it enables buyers to purchase the emissions reductions associated with small and especially local projects.

The number of companies investing in renewable energy credits, or RECs, remains huge, despite growing skepticism over their impact. Young said “more and more of them do it because that’s the only solution that they have.” 

Hence WattCarbon’s goals of both making clean energy buying more accessible, Young said, and “raising the bar so that those who do choose to to to go down that more impact-oriented path have something to show for it, and can prove that they're making these higher level impacts.”