Summary:
- ERCOT is poised to approve TEBA’s proposal to create an Energy Attribute Certificate (EAC) program for any generation resource in Texas.
- EACs would provide voluntary granular, hour-by-hour transparency into the sources of electricity in ERCOT – enabling buyers to validate their energy use and unlock new, customer-driven investments across a wide range of technologies beyond what current ERCOT systems allow.
- This program will accelerate the development of emerging resources, strengthen the grid, and help Texas sustain reliable, affordable energy growth in the face of rapidly rising demand.
Many employers came to Texas because of its abundant, affordable energy supply.
Increasingly, companies also want to know what kind of energy they’re buying off Texas’ ERCOT grid.
To enable the kind of innovative energy transactions that customers can drive in the market, the Texas Energy Buyers Alliance (TEBA) proposed creating a voluntary energy attribute certificate (EAC) program for the Texas grid. This would show – hour-by-hour – every watt of energy produced by every power plant that participates in the program.
The concept has won unanimous support from two key ERCOT subcommittees, and the ERCOT board is expected to vote on the proposal in June.
What Are EACs?
EACs are market-based digital instruments that prove the origin of electrons – showing, say, whether they were generated by a solar farm or a natural gas plant. EACs provide a way of claiming the production and use of any generation type by showing how, when, and where energy is produced on a more granular basis. That differs from ERCOT’s current program of renewable energy certificates (RECs), which are only for renewable generators, and do not typically carry more granular information, and are usually settled annually.
This data validates investments energy consumers are making in the system, which can help unlock customer-driven investments in the innovative, reliable energy Texas needs. This granular, transparent information can help scale carbon capture and direct air capture projects, low-carbon fuels, virtual power plants, and other distributed energy resources by spotlighting their value.
Why Do We Needs EACs?
Ensuring EACs are available for any type of generation will give consumers more detailed information about the energy they use, including which company produced the electricity, where it was generated, how much was produced, and which resources were used. For energy storage systems, EACs can also show what resources were used to charge the batteries and when the batteries were discharged.
They’ll also allow large energy buyers to show their own customers what kind of energy they’re using to create products – which is increasingly important for companies operating around the world.
How Do EACs Benefit the Grid?
The Texas grid is growing at a break-neck pace and will need far more energy than it produces now to keep up with economic growth. To spur that growth, energy customers need incentives to bring solutions that can provide reliable, affordable, fast, and carbon emissions-free energy.
With EACs, large customers – from oil and gas companies and data centers to manufacturers and retailers – can help pull zero- or low-carbon emissions technologies into the market. Markets are nascent for these technologies. EACs give large buyers credit for buying energy from these resources through long-term contracts or advanced market commitments, helping the market for those technologies grow.
Thus, EACs create the trust and validation that will drive and validate markets for new energy products.
EACs also encourage generators to create the energy we need. Because companies can transfer EACs, the certificates provide a revenue stream that allows market demand to scale more efficiently. For example, EACs could facilitate needed financing for advanced nuclear plants, accelerating development of a technology that state leaders want to prioritize.
Texas created its REC system following passage of the state’s seminal energy market restructuring bill in 1999 – in part to supercharge the program’s landmark consumer choice features. Yet this system is more than a quarter-century old, and it provides only general information about just a subset of the state’s energy portfolio, falling far short of modern consumer needs.
EACs will take Texas’ system to the next level, creating an unparalleled resource for companies that generate energy and companies that buy it. They’ll fortify consumer choice and innovative energy transactions, and spur faster market development of new technologies and market products. This, in turn, will strengthen the grid and lower costs for consumers – ensuring Texas continues its legacy as a national economic leader.