With laurn Sagoland from London and Gerard Reed from Berlin.

This is redefining energy today.

On referring energy, this is a subject very close to my heart, is the fight for proper carbon accounting and twenty four seven green power.

Now j'are my usual co host is not there, but thanks God I found a replacement another Irish guy.

Welcome Killian Daily.

Thanks very much for having me along.

I'm happy to fly the flag of Ireland.

Enjoyed as absent.

This episode is in partnership with a company I've invested into called Renewable, and Renewable is a procurement and sustain meety platform for temporal match renewable energy.

Now we'll discuss a bit later, but first I want to look back.

What's the Greenhouse Guest protocol, how important it is and how we are really Killian at a cross road right now because the version three is in debate.

Now you are executive director of Energy Tech.

Can you explain a bit what Energy Tag is.

Yeah, So, Energy Tag is a nonprofit.

Basically, we advocate for reforms in clean electricity markets and carbon accounting, ultimately with the end goal of delivering clean power around the clock.

Today's markets and accounting structures just basically don't do that.

Now Companies cooking their books and trying to transform reporting into a pr exercise.

That's not new.

For instance, if we look back before the nineteen twenty nine crash, companies were reporting their financials the way they wanted.

So every time there's a crisis, there are standards that come in.

So now, of course the financial standouts are pretty established and accepted by everybody.

Now, what happened is that in the nineties, as the whole conversation around climate change and emission tradings out to appear, what we realized and what government realized is that company were reporting their C two emission in a very disorganized, self serving way.

And I think the government toold the industry.

Look, guys, whether you come with a common standout to report your CEO two or we'll do it ourselves.

So in nineteen ninety eight, two NGO one in the US called the World Resource Institute, and you know one in Switzerland called the World Business Council for Development put together a task force to write that first Greener's Gas Protocol.

I fully agree, In fact, I have sort of personal experience of this.

So before energy tag, what I used to do was buy electricity, wholesale electricity for a French company called aeri Quid, which consumes more electricity than my home country of Ireland forty two an hours a year.

So this is big stuff, right, And one day I'll be buying electricity where obviously you have to match your demand on an hourly basis and electricity markets with real power, and then the next day I would go and do the carbon accounting.

And this world is it is a bit of a parallel universe.

You can claim to be solar powered at night, you can claim that you're consuming icelandic hydro for your operations in Italy.

It's really something that is detached from reality and unfortunately that's where we're at today with carbon accounting.

It's rules that were set up maybe twenty years ago when we were kicking off the renewable energy revolution, but now it's just simply not really fit for purpose anymore when we need to think about storage, flexibility and ultimately all the solutions we need to integrate renewables around the clock.

The task force was composed of about thirty forty people, and I wasn't one of them at the time I was working at PwC.

We brought the accounting expertise into the building of the gunas GAES Portocol, which took probably three years to put together.

That the interesting thing is it started by the shell of reporting SHELL as an extraordinary technical seal two reporting standards.

And they arrived and they just say, oh, you know, we're Shell, We're so good.

We're just going to remove SHELL reporting and we're gonna put global reporting.

He said the guy, wait, you know, we need to figure out and look, on one hand, it was technically extraordinary, and on the other was extremely self serving because at the time, and of course now everybody knows scope one scope too scop through.

But at the time it was direct and indirect, So you had direct emissions which were like your responsibility, and indirect were like other people's problem.

And the whole game of Shell was just to spend his time taking some of their direct emission and doing a lot of explanation where in fact they should be indirect.

We start publishing a first draft and a certain number of companies were volunteer to execute the first draft, and everybody would report the same way, which was already a big progress.

And I was in charge of the aluminium sector, so all the aluminium sector companies were supposed to use the protocol.

And I end up twenty five years ago a Tomago, which is the biggest aluminium smelter in Australia.

It's a great you know, the tour and you know, they welcome me and it's a beautiful plant.

It's newcastles with between Sydney and Brisbane, and the tour around, mister Segalen and now we're so clean, We're so clean.

We saw like, oh, your protocol is going to show that we are so clean.

So I said great.

You know, after like an hour and a half of propaganda, I go back on the parking lot and then above my head I'll see all those wires and literally across the fence.

So it was not an expression, it was for real.

There was eight hundred megawat coal plants running twenty four seven for a Tomago smelter.

And I said, what about those emissions?

And I said, yeah, they're not mine, yeah, but indirectly they're yours.

And the guy at this wonderful sentence, he say, of course I know.

If I report my direct emission, that's two ton of sew two aluminium.

But if I include the cold plant, I'm up to twenty ton of sew tube aluminium.

I'm not an idiot.

I'm not going to report it.

And then the guy put me back into taxi.

I say, I was so pissed off that when we're the next iteration of the conversation around the glass Parker, that's the verse of the scoop two.

Otherwise they just put everything in direct So thank you, mister Tomago plant manager.

You have created the SCOP two.

Yeah, I've heard the story.

I really love it, and it's an honor to talk to the originator of sculpture accounting and to see where we're at with it today.

Right, Obviously it's been a huge stet.

Let's also realize that it was very very important to have the protocol set up to start to track these emissions.

Now, I guess where we're at today now the protocol is being revised.

We're in this phase where ninety six or seven percent to the S and P five hundred are using this now.

So it's a huge success.

Companies reporting publicly based on the protocol consume more power than India annually.

Right, So this is big stuff.

And the incentive structures.

We must get them right for the next couple a decade of the carbonization, and now we're really at this fork in the road.

There's an update process going on.

There's people that don't necessarily agree on the direction of travel.

The interesting thing is that the protocol, the original one, did not really address green power because there was simply no wind or no solar indus twenty five years ago.

And in fact, the old green power reporting came about fifteen years ago in a bit of a disorganized way through system of green certificates, and talk a bit about how, in fact the reporting of green power had a bit of a parallel truck to CO two and now they're going to merge.

The reporting of green power initially evolved in a kind of a simplistic way through man're bal anti tracking systems, which are essential to make sure that you're the one who's actually claiming that unit of energy and that's not being claimed by three other people.

The way the systems were set up initially probably made sense, but they took a very light consideration of how power markets work and how the electricity flows through the system.

So the way today it's still the standard that the way we track and claim green power is based on what we call an annual matching.

So you can claim solar power produced in the middle of the day at three o'clock in the morning, or you can claim to use green power produced in Norway in Spain.

For example, today Norway exports five to ten times more green power certificates than it does physical electricity.

So the way we've set up the system, it's not really properly tracking the real emissions being delivered to consumers, and that's something that we urgently need to address.

We have companies, for example, all of the big tech companies today, they're all already one hundred renewable.

This just doesn't make sense.

They've made important investments and renewables, which is great, but to say job done, this is really not where're at right now.

Look I like what you say, because again first there's nothing, then there's a standarud and then people try to dodge the standard.

You're right, in the past ten years will do that ESG movement by green and so on.

We've seen extraordinary claim of people say we're one hundred percent renewable, but as you say, a guy's gonna buy green certify kids in Arizona and is reporting in Delaware.

The grids are not even connected together, but you know it's all well and fine, which leads to the two main problems that you have highlighted.

The one is the temporality and the second is the geography.

And I know there's a third one we called additionality.

But additionality have heard additionality for more than twenty five years.

People still talk about it.

It's impossible.

So let's explain exactly what is the matching from a geographical point of view and time point of view.

Yeah.

Absolutely, these are like fundamentals to electricity.

So what we need is on a power system is to in the temporal aspect to match ultimately demand with clean power on an hourly basis.

Right, that's how the power markets work, that's how the grid works today.

We're trying to do that on an annual basis.

So you can be one hundred percent solar powered, that's not right.

What we need is to do it in an hourly basis.

So, for example, if you want to be powered renewable energy at night time, well then you have to build a battery and put that solar into it during the day and then put it out at night.

So we set up that incentive structure for storage, something that is completely lacking today in the standard.

So that's number one.

Number two is this geographical boundary today we've just taken this really broad view, especially in Europe and the United States, saying in the US, we'll just consider it all completely interconnected.

As we know, hardly exports any power to the rest of the US.

But you could be one hundred percent power by Texas wind in New York, while in reality you're pulling gas from the grid in New York.

So you have this disconnect.

You're not addressing grid congestion, you're not actually tackling the hardest hours of decarbonization where you're consuming that power.

And we need to address these two things.

This is not a radical concept.

This is literally how power markets work today, right.

We need to just bring that logical power markets and bring it into the carbon and green world.

As usual, the fussy few lobbies say, I hear you, but it's not possible, it's too costly.

I've heard that for twenty five years.

So everything is impossible.

That's the role of energy Tag.

Energy tag is really about putting forward thinking companies together to demonstrate that technically those temporal machine and geographical machine are possible.

Now, of course you're not going to get two hundred percent immediately unless you're in Norway or Quebec or Brazil, but at least you know, oh and at least you can track and you can track pog guys, because otherwise, as you say, everybody wins, you know, every ah, I'm clean, I'm clean, I'm clean, which means nothing.

So probably go a bit inside the role of energy tag.

I suppose we have a couple of different functions.

Obviously one of them mentions is like being part of the update processes for greenized gas protocol or in regulatory processes saying we need to do accounting in this more granular hourly way.

But also we bring folks together and figure out how do we do this tracking.

We have open source standards for example, how to do this hourly tracking.

And this is something that's now proven all over the world on consumers of all different sizes.

This can be enabled directly by electricity suppliers like your Octopus Energy in the UK, for example, have an hourly matching tariff for their business customers.

We've shown this working also in the US in Asia Pacific region, because again, right, we're fundamentally taking data as they're already and just matching that together on an hourly basis.

So the tracking and the accounting is absolutely possible.

Some companies like Google are already reporting this voluntarily publicly across their global operations.

So of course once we change these rules, there'll be a kind of a phase in period, etc.

But we've shown that it's technically feasible to do this accounting.

Now, as you said, is it going to be easy for everyone to be one hundred percent renewable and one hundred percent clean everywhere?

Absolutely not, because it's not easy to be that in reality.

And that's what we need to kind of take a step back here and say, right, where are we actually at and what investments do we need to make to really get to being powered by clean power around the clock.

And that is kind of the paradigm shift we need to have.

We need to move away from feeling that being one hundred percent renewable by fudging the rules is the way forward, right, we need to take a step back and think, well, obviously a plenty of solar and wind demand response flexibility, clean firm technologies they all have to come into the mix if we're going to actually decarbonize the grid and deliver cheap power around the clock and get rid of fossil fuels in all hours.

That's all when I'm fine, But that's to twenty one and since then you've got the crazy rise of data centers, and of course big tech has been a big proponent of clean energy.

Some play the game, as you name them, Microsoft, Google, but others decide to break the thermometer and design their own accounting system.

And I'm going to name them it's Meta and Amazon, Meta and Amazon.

I've decided, like man the twenty four seven.

You know, it's just going to show that I'm pouring all all my new data center with gas turbines.

So I invent a new self reporting protocol.

But like weworker used to do, and of course they're going to show everything isthing's great.

You know, data center in West Virginia is going to be compensated by a wind farm in India.

They don't want to play the game.

And you know, I'm saying it here, this is ridiculous, doesn't make any sense, but they've put Pyre mooney.

So every time you hear somebody promoting Meta or Amazon Accounting know that they're paid.

They are paid all the consultants, and every time I call them directly and guy say, it's that's stupid, the guys say, yeah, I know, but you know what, I got my check.

Let's go back to when we did the Scope two.

We had very very few data.

Basically we say we're going to take some averages and so on.

But now, as you said, with the digital we know what's going on every five minutes, hour and so on.

And the philosophy of the Greeners gas potocol at the beginning is when a better measurement is introduced, we're going to use the best.

So now probably explain what's going on on the Scope two, which is basically power consumption.

Basically, we're at an inflection point and we've demonstrated that people can can go further than the current rules alive.

Right, So if you're building out a data center, for example, you can actually measure where you're at on an hourly basis and really which how are really supplying your data center, not from some disconnected, faraway land room, like really in the same grid region.

The solutions are out there today to do that.

Then you obviously need to think about how you're procuring electricity.

There's the really interesting analysis done by the IA a few months ago on how to power data centers.

There's a very interesting finding.

Like a lot of the interesting stuff, it's very deep in the report, page seventy or eighty how do we power data centers?

Then what they find in Europe and China is that we can on an eighty percent hourly matching basis power data centers with hybridized renewables.

So with solar wind batteries brought together, this can be cheaper than the standard industry retail price of electricity in Europe and China.

So this is the future.

Battery prices are collapsing, renewables are getting cheaper and cheaper.

This is the way forward to really really power a data center or any other type of large industrial load or facility.

Right.

So this is what we need to do, and we need the accounting structure and framework to incentivize that type of behavior.

Luckily that is happening right and so the Greenhouse Gas Protocol we've been in the technical working Group, I'm a member of that for the last year or so.

The direction of travel is very clear.

It's towards this granularity.

As you mentioned, the tools are there now, we're going towards hourly and local matching.

That's in the proposal.

Public comment coming in October.

So it's a really exciting time.

What should people who think like us?

How can we support the inclusion of twenty four to seven granular accounting inside the scoop too?

Sorry it looks like a bit complex, but that's where we're right right now.

The people who are against are all oil lobbyists.

They just paid for that.

I've seen that crowd for twenty five years.

The people who are against our oil lobbyist period killian.

Where do we go and comment in favor of the inclusion?

So there's going to be a public common period in October, and it's as you say, it's essential that everyone that they be a company, an academic and NGO listening to this spread the word.

It's super important that you reply to that public comment.

And thankfully, the Technical Working Group, the governance of the Greenhouse Cast Protocol are fully behind this proposed direction of travel towards hourly local accounting for our large consumers.

This is not for SMEs that we're talking about right here, there's going to be a transition into this stuff.

As you say, it's definitely not impossible.

It's the only way to do the accounting accurately, right, So it's super important follow energy tag on LinkedIn, follow me on LinkedIn, sign up to our newsletter on our website.

We'll be communicating about this really widely and making sure that you guys know when to comment and what to say in supporting these rules.

Well, this is fantastic.

Killian.

Also in London with gone Wable, we're having this big day the tenth in October, so that in two weeks time where we go also deep into power purchase agreement linked into twenty four to seven.

And people say it's complex, No it's not, No, it's not.

And as you said, having some green certificate coming out of Iceland, whereas Iceland is not connected to any greedy in your job, that is ridiculous.

One hundred percent.

And you know, we hear this, Oh it's not possible, but you know why then, right.

The people who understand the grid the most and the power markets the most are the system operators in Europe.

They're put out a paper a couple of years ago calling for the exact changes that are being proposed right now.

They wouldn't be calling for things that were infeasible that were bad for the system.

They're independent, they don't have a skin in the game and in corporate carbon accounting, and they're very clear and so eat very clear this is the direction of travel.

We need to have to integrate renewables more cost effectively into our system.

So there you have it.

Obviously, there's companies doing this.

There's IA Research, Princeton Research, MIT Research showing that this approach will deliver more grid decarbonization, will incentivize the technologies we need to deliver clean power and the clock.

It's a pretty broad coalition of people who are in favor of these changes, and that's key.

It's not just one group, it's a broad perspective.

This has also already been adopted in regulations in Europe and the US as well for things like green hydrogen accounting and subsidies.

So this is not coming out of the blue.

It's just common sense, and we need to stay rational and kind of respond to some of the criticism in the way that it needs to be responded to.

Yeah.

Sorry, sometimes I get a bit to fight up.

You know, I think a little bit of a missed opportunity not to focus more on this approach, because at the end of the day, the price of renewables combined with storage is dropping super fast, and the price of gas well, god only knows it's going up in the US, it's extremely volatile and unpredictable.

In Europe's that's your basically your alternative in terms of electricity sourcing in a lot of parts of the world.

So that's the bet to take in the long run.

The hedging benefit we did is, you know, as part of a study done by your electric tex Parker th Fe years ago showing the massive hedging benefit to hepas that are more around the clock, maybe matching eighty ninety percent of your demand.

It's shielding you against those high electricity price years and times.

This is not only about being transparent and green, it's also just about smart business sense going forward and realizing that round the clock renewables are going to be the more competitive option in the decades to come.

Well, Killiana, you're such a good Irish guy.

I'm not sure I'm going to bring a job back on the show.

That's you saying that, not mea It was.

Great to have you.

This is the pod.

Guys, we're going forward and thank you for your work, and we're going to get that scoop two nailed.

Thanks so much, Laura, thank you for listening to Redefining Energy.

Don't forget to rate the show and subscribe on Apple, Podcast, Spotify, or the platform of your choice.