Many large corporations have committed to combating climate change and have implemented clean energy resources to offset their electricity consumption. At the same time, tracking environmental goals in traditional units of megawatt-hour (MWh) of clean energy is an outdated and imprecise approach that does not measure the carbon emissions reductions actually achieved.

A recent white paper coauthored by Brattle Principal Kathleen Spees and Dr. David Luke Oates of REsurety introduces a new approach that customers, markets, and policymakers can adopt to measure and incentivize clean energy resources – referred to as “locational marginal emissions” (LMEs). The LME is a metric that measures the tons of carbon emissions displaced by 1 MWh of clean energy injected into the grid at a specific location and a specific point in time. LMEs are calculated at each power system node in a manner very similar to the “locational marginal prices” (LMPs) used to set wholesale electricity market prices.

LMEs can act as a force multiplier for directing clean energy program dollars to maximize carbon impact. According to the white paper, customers interested in maximizing the carbon impact of their clean energy program dollars can use LME-based accounting to more accurately measure their carbon footprint, the value of their clean energy contracts, and the dollar-per-ton avoided of alternative strategies that they might deploy.

The authors found that directing clean energy deployment to the highest-value renewable projects has the potential to double the carbon impact, compared to a more traditional annual energy matching approach. Setting goals and measuring performance using carbon-based metrics can help organizations select generation technologies, make siting decisions, and operate resources to minimize their carbon footprint.

Using LMEs to Guide Renewable Procurement Strategies Can Maximize the Carbon Impact of Clean Energy Program Dollars

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