The Next Frontier for Grid Emissions: The Carbon Trail of Stored Electricity

At Singularity, we have long known that the carbon intensity of the electricity we consume is changing constantly based on the times when clean and renewable generation is available.

However, as energy storage continues to play a larger and larger role in our electricity system, it is increasingly the case that the electricity that we consume may have been generated hours, days, or weeks in the past.

While energy storage itself does not directly emit GHGs when discharging, calling that electricity “clean” may be misleading to decision makers especially if the battery was charged using emitting sources of generation such as coal or fossil gas. If we were to treat all storage discharge as zero-carbon, then grid electricity delivered at some times of day might appear to be cleaner than it actually is, sending the wrong signals for consumers who want to use electricity when the grid is the cleanest. This would also provide less incentive for energy storage to charge when clean and renewable energy is the most abundant.

So how should the carbon intensity of discharged electricity be characterized? Despite the growing deployment of utility-scale energy storage technologies around the world, to date there exists no widely-adopted, standardized guidance for accounting for GHG emissions or energy attribute certificates (EACs) through energy storage. When standards like the GHG Protocol were last updated, there was little attention devoted to energy storage because it was not in widespread use at the utility scale (except for pumped storage hydro in some regions), and because GHG accounting was done at an annual resolution, over which timescale energy storage is a net consumer of electricity due to roundtrip efficiency losses.

Given the increasing adoption of granular GHG accounting and time-matched clean energy procurement, defining such rules will be important.

The challenges of tracking emissions through energy storage

One challenge in defining accounting standards for energy storage may be that the appropriate approach varies by context, such as:

• whether you are a battery owner/operator trying to inventory your own emissions
• whether you are providing a “location-based” (what we like to call “consumption-based”) emission factor for consumed electricity by end users of the grid, which is based on tracking physical power flows, or
• whether you are trying to provide “market-based” (what we like to call “contract-based”) emissions and fuel mix data for customers interested in 24/7 procurement, which is based on tracking contractual ownership of electricity, rather than flow-based consumption of electricity.

The specific approach for tracking the emissions of the electricity the storage consumes while charging may also depend on the location of the storage asset in the grid, i.e. whether it is co-located with a generator, behind a customer meter, or a standalone asset on the transmission grid.

In the limited forums where the issue of energy storage accounting has been discussed to date, a few common themes emerge about why energy storage accounting can be challenging.

1. Temporal tracking: First, and perhaps most obviously, energy storage can shift consumed emissions and EACs across time, so new ledgers and methodologies are needed to track this flow of attributes over time.
2. What is storage?: Second, because storage can both charge (increase load) and discharge (inject power into the system), there is debate around whether to treat energy storage as generation, as load, as a component of whatever system it is connected to (e.g. transmission), or as some entirely new class of assets for the purposes of accounting.
3. Efficiency Losses: Third, energy storage incurs roundtrip efficiency losses when charging and when discharging, as well as self-discharge or leakage losses as energy sits in the storage asset. In some accounting contexts, this raises important questions about how to account for these losses, to whom these losses should be allocated (e.g. the operator of the storage or the consumer of the discharged energy), and in which inventory scope (e.g. scope 2 or scope 3) these losses should be accounted. For example, a battery with an 80% roundtrip efficiency must charge 50 MWh of electricity to discharge 40MWh of electricity later. This means that if the carbon intensity of the electricity used to charge the battery was 1,000 lbCO2/MWh, if you decide to allocate the emissions from losses to the battery operator, then the carbon intensity of the discharged electricity is still 1,000 lb/MWh, but if you decide to allocate the loss emissions to the user of the electricity, the carbon intensity of the discharged electricity would be 1,250 lb/MWh. Going back to theme #2, the first approach would be consistent with how losses from the transmission network are allocated today, but the latter approach would be consistent with how generator efficiency losses are allocated today, when we use net generation rather than gross generation as the denominator in the calculation of generator carbon intensity.
4. Ancillary uses of storage: Finally, energy storage is not only used for energy arbitrage across time, but also for uses like frequency regulation, voltage support, and other ancillary services, and it is unclear if and how to account for emissions and attribute flows in these contexts.

Tracking granular energy attribute certificates (EACs) through storage

With the growing interest in 24/7 or time-coincident clean energy accounting and the growth of granular EAC registries (such as M-RETS and the PJM Generation Attribute Tracking System), tracking EACs through energy storage is another important and related challenge for tracking contractual ownership and allocation of electricity attributes. Although no universal standard has been adopted to date, there have been several recent efforts exploring this challenge.

For example, in 2021, the Washington State Department of Commerce issued a request for comments on energy storage accounting issues as part of its rulemaking to implement the state’s Clean Energy Transformation Act (CETA). A wide range of electric utility, storage industry, environmental, and other stakeholders weighed in, but in my opinion, the Center for Resource Solutions outlined a particularly well-reasoned response about the important considerations for tracking RECs through energy storage.

The 2022 Granular Certificate Scheme Standard and Use Case Guidelines published by EnergyTag represents another stakeholder-driven exploration of how EAC tracking could work with regards to energy storage. The key topics explored in these documents include quantifying storage losses, storage record allocation methods, and exploring specific use cases such as temporal matching and avoided emissions tracking.

Based on these existing efforts, we have identified four potential approaches for how to track granular EACs through energy storage:

1. Reissuance: Under this approach, the storage operator would purchase GCs when charging, retire any GCs to cover storage losses, and then sell or transact the remaining GCs when discharging. This is perhaps the simplest of approaches, but may also require some sort of additional information to be added to the GC about the timestamp of the charging and discharging, especially if used for 24/7 purposes. This approach was originally proposed by the Center for Resource Solutions in their response to a request for comments issued by the Washington State Department of Commerce.
2. Separate ledger: Under this approach, a separate storage charging ledger and storage discharge ledger would be maintained separately from the GC that tracks GC transactions through energy storage. Such a ledger would require the use of a standard accounting framework, such as last-in-first-out (LIFO), first-in-first-out (FIFO), weighted average, or allowing the operator to decide. This is the approach proposed by EnergyTag in their 2022 Granular Certificate Scheme Standard and Use Case Guidelines. These guidelines recommend the use of either FIFO or operator-decision accounting. However, one criticism that has been raised about creating a separate tracking system from existing registries is that it could increase the risk of double-counting if not implemented carefully.
3. Storage as generation: Under this approach, storage would be treated like a generation asset, and an GC would be issued by EAC registries for each MWh of electricity discharged by the storage. The number of GCs issued, or the attributes of those GCs, could be based on two approaches. One approach would assign a carbon-free GC to all storage discharges to reflect the zero direct emissions of storage charging, making the storage operator responsible for any carbon emissions consumed but not passing those on to the end consumer of the stored electricity. The other option would assign emissions attributes to the issued GC based on the attributes of the GCs from other generators retired by the storage for charging. The main criticism of this approach is that storage is not a generation asset and does not have any intrinsic renewable, carbon-free, or emissions characteristics, and thus has been opposed by the U.S. Energy Storage Association.
4. Storage as net load: Under this approach, storage would be treated as a modifier to the customer load profile, as if the storage were behind the customer meter. Storage charging would increase the net load of a customer or group of customers, and storage discharging would decrease the net load of the customer or group of customers. Then GCs would be retired against the modified net load of the consumer. This approach avoids the need to reissue or temporally shift granular certificates across time. While this approach could be useful for 24/7 tariff accounting, it raises challenges for end-user scope 2 accounting since the actual customer load will not match the load profile against which the GCs are being retired in each hour, potentially resulting in inaccurate end-user emission inventories.

No matter the approach adopted, energy storage accounting would likely be aided by the expansion of all-generation tracking (AGT), that is, issuing EACs for all types of generation, including fossil fuels, and not only renewable or carbon-free energy. This is because today, to prevent double-counting, any portion of storage charging that is not matched with RECs would have to be assigned a “residual mix” which is meant to represent the attributes of all energy that is not otherwise contractually claimed by another grid user. However, residual mixes are notoriously difficult, if not practically impossible, to accurately calculate outside of all-generation tracking systems like PJM GATS.

Flow-based emissions tracking through energy storage

In recent years, new research has recognized that the carbon intensity of the electricity we consume depends on where it flows from, such as in the case of electricity that is imported from other regions. Thus, in addition to using storage to allocate EACs across time for 24/7 CFE tariffs or other contract-based accounting schemes, electricity consumers may also want to know the “flow-based” carbon intensity of stored electricity they consume, such as for location-based Scope 2 accounting or demand optimization.

While many existing emissions data sources such as Singularity’s Grid Carbon API, the Open Grid Emissions Initiative, and the EIA’s Hourly Electric Grid Monitor track the flow of electricity across space, to date, none of these sources track the flow of electricity across time. While the theoretical approach to temporal flow tracing is not dissimilar to spatial flow tracing, the lack of available flow-based data is reflective of the fact that data about energy storage dispatch patterns is not yet widely available. However, as this data becomes more widely available, for example through the upcoming updates to several EIA survey forms, we at Singularity hope to lead the deployment of storage-informed emissions data to continue to deliver the most actionable and accurate grid carbon data available.

What else should we know?

The landscape of energy storage emissions tracking is rapidly evolving, and several efforts are currently underway to better define how storage emissions should be tracked. Thus, our state of knowledge on this topic is constantly evolving. We’d love to hear from you if you think that we missed any perspectives or approaches to storage accounting, or if you have any thoughts on which accounting approaches seem the most reasonable. Please feel free to leave a comment here!