How to account for carbon emissions in the purchase of clean electricity has received a lot of attention lately. In order to comply with the Inflation Reduction Act's provisions, which include a 10-year Production Tax Credit (45V) for clean hydrogen, the Treasury Department is developing regulations. Additionally, the Scope 2 Guidance of the Greenhouse Gas Protocol is reviewing methodology used to account for emissions from voluntary purchases. According to some supporters, only purchases made from sources where supply and demand are hourly matched could be deemed "clean."
The future contribution of renewable power purchases to reducing emissions is in question. A seemingly appealing solution to guarantee that clean electricity purchases are carbon-free is to match 100% of electricity usage with clean electricity production on an hourly basis. But because it calls for certain loads to turn into electrical "islands," cut off from the advantages of doing business in wholesale power markets, it would be prohibitively expensive to do for all but the most adaptable of loads. By inhibiting the growth of the clean hydrogen business, choking the voluntary market for clean power purchases, and unnecessarily driving up costs in compliance markets, mandating it broadly would hinder the energy transition.