Advancing Decarbonisation through Clean Electricity Procurement

The number of corporations announcing clean electricity pledges has increased substantially in recent years, with many companies setting specific goals to meet some or all of their electricity demand with clean supply. These goals can support new capacity in clean generation, helping to boost overall shares in power systems. Increasingly, clean electricity goals can be specified in different ways; this can have implications for the clean technologies procured, the amount and location of procurement, and the resulting emissions reduction. In some regions, corporates have a range of options to choose from when purchasing clean electricity; in other regions, legal and regulatory barriers still constrain engagement in corporate procurement.

This report examines the options available and the ways in which they contribute to decarbonisation and, ultimately, net zero electricity goals. Using the IEA’s regional power system models for India and Indonesia, the report applies quantitative analysis to examine the implications of different procurement strategies for emissions reduction, procurement costs and technology deployment. A key finding is that when companies set more granular goals – such as matching their electricity demand hourly (rather than annually as has been the dominant practice) – it can stimulate deployment of the wider portfolio of flexible technologies needed for net zero transitions in the power sector.

The report aims to guide corporates in choosing impactful ways to procure clean electricity. It also highlights the roles of policy makers, regulators, system operators and network owners and operators in increasing the availability and impact of corporate procurement options. The final chapter offers targeted recommendations for different stakeholder groups.