How to Tell When Energy is Green with Killian Daly

In this episode, host Chris Adams is joined by Killian Daly, Executive Director of EnergyTag, to explore the complexities of green energy tracking and carbon accounting. They discuss the challenges of accurately measuring and claiming green energy use, including the flaws in current carbon accounting methods and how EnergyTag is working to improve transparency through time-based and location-based energy tracking. Killian shares insights from his experience managing large-scale energy procurement and highlights the growing adoption of 24/7 clean energy practices by major tech companies and policymakers. They also discuss the impact of green energy policies on industries like hydrogen production and data centers, emphasizing the need for accurate, accountable energy sourcing and we find out just how tubular Ireland can actually be!

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TRANSCRIPT BELOW:

Killian Daly: We need to think about this kind of properly and do the accounting correctly.

And unfortunately, we don't do the accounting very well today. 

Chris Adams: Hello, and welcome to Environment Variables, brought to you by the Green Software Foundation. In each episode, we discuss the latest news and events surrounding green software. On our show, you can expect candid conversations with top experts in their field who have a passion for how to reduce the greenhouse gas emissions of software.

I'm your host, Chris Adams. 

Hello, and welcome to another edition of Environment Variables, where we bring you the latest news and updates from the world of sustainable software development. I'm your host, Chris Adams. When we write software, there are some things we can control directly. For example, we might be able to code in a tight loop ourselves, or design a system that scales to zero when it's not in use.

And if we're buying from a cloud vendor, like many of us do now, we're often buying digital resources, like gigabytes of RAM and disk, or maybe virtual CPUs, rather than physical servers. It's a little bit less direct, but we still know we have a lot of scope for the decisions, to control the impact of their decisions and what kind of environmental consequences come about from that.

However, if we look one level further down the stack, like how the energy powering our kit is sourced, our control is even more indirect. We rarely, if ever, directly choose the kind of generation that powers data centers that our code runs in. But we know it still has an impact. So if we want to source energy responsibly, how do we do it?

If you want to know this, it's a really good idea to talk to someone whose literal job for years has been buying lots and lots of clean energy and is intimately familiar with the standards involved in doing so and who has spent a lot of time thinking about how to make sure you can tell when the energy you're buying really is green.

Fortunately, today I'm joined by just that person, Killian Daly, the Executive Director of the standards organization, EnergyTag. Killian, it's really, nice to have you on the pod. Thanks for coming on.

Killian Daly: Yeah, thanks. Thanks very much for having me, Chris. great to be on the pod and, an avid listener, also. So it's always nice to contribute.

Chris Adams: Thank you very much. Killian, I'm going to give you a bit of space to introduce yourself, and I've just mentioned that you're involved in EnergyTag, and we'll talk a little bit about what EnergyTag does. Because I know you and because, well, I met you maybe three years ago, I figured it might just be, it might be worth just talking a little bit about our lives outside of green software and sustainability.

So, we were in this accelerator with the Green Web Foundation talking about a fossil free internet, and you were talking about EnergyTag and why it's important to track the provenance of energy. I remember you telling, we were asked about our passions. And, you told me about surfing and I never ever thought about Ireland as a place where you would surf because I didn't think it was all that warm. So can you maybe tell me a little bit like enlighten me here because it's not the first country I think of when I think of surfing and when you said that I was like he's" having a joke, right?"

Killian Daly: Yeah. Well, I do like to joke, but this is not actually one of the jokes, Well, it doesn't need to be warm to surf. You just need to have waves, I suppose. So, yeah, it's something since I was really very young. I've always gone to the west coast of Ireland. Beautiful County Clare near the Cliffs of Moher.

Maybe people know of them. And so we go every year. And my cousins, since a very young age, started surfing. We just, you know, solve these big waves and there's other people out there, surfing, bodyboarding and we're like, "Hey, let's try that out. That looks really cool." So, yeah, since I don't know, 6 or 7 years old, I've been going there every year, in summer, also in winter, me and my cousins also go, yeah.

We go at New Year's get into the frigid cold Atlantic. And, yeah, it's magic, really. If you have the right, if you have the right wetsuit, you can kind of, you can get through anything, 

Chris Adams: So there's no such thing as cold was it bad weather, just bad clothing that also applies to wetsuits.

Killian Daly: Yeah. Yeah. Yeah. It couldn't apply. Couldn't apply anymore. And obviously, in winter, you get the biggest swells, right? so actually, people probably don't know it, but Ireland has some of the biggest waves in the world. Now, on the west coast of Ireland, you have, yeah, really massive 50, 60 foot waves.

Yeah, really all you can get some sort of a, all time surf there. So, so yeah, it's one of one of our better kept secrets.

Chris Adams: I was not expecting to learn how to go totally tubular on this podcast.

Killian Daly: Yeah, 

Chris Adams: Wow, that's, yeah, that's...

Killian Daly: It's not, not for the faint of heart, but yeah, I would definitely recommend it.

Chris Adams: Actually, now that you mention that, and now that we talk about, going back to the world of energy, now that people talk about Ireland as, the Saudi Arabia of wind, and it being windy AF, Then I can kind of see where you're coming from with it, actually. It doesn't make a bit more sense. So yeah, thank you for that little segue, actually, Killian.

Okay, so we've started to talk a little bit about energy. And, I know that your, the organization you work for right now is called EnergyTag. But previously, as I understood it, you didn't, you worked in other organizations before. And, you've been working as a kind of buyer of energy, so you know a fair amount about actually sourcing electricity and how to kind of do that in a kind of responsible way.

And I think when I heard you, we spoke about this before, you mentioned that, "yeah, I'm used to buying significant amounts of power" in your kind of previous life. Could I just like, could you maybe talk, provide a bit of a kind of background there, and so we can talk a little bit about context and size, because that might be helpful for us talking about the relative size that tech giants might buy and so on, and how much of that is applicable.

Killian Daly: Yeah, sure. Yeah, so, I've been thinking about energy for a long time, even before my professional career studied energy and electrical engineering since I was 18 years old and did a master's in that, also. And then obviously in my working life as well. I've been basically always in the energy sector.

So before EnergyTag, I was basically overseeing the global electricity portfolio, and the procurement of electricity for a company called Air Liquide, which is basically a large French multinational that produces, liquid air. So, oxygen, nitrogen, all the different parts of air which are, essential, feedstocks into various industries, and they consume a lot of electricity.

So, the portfolio my team oversaw was about 35 to 40 terawatt hours of electricity consumption.

Chris Adams: Okay.

Killian Daly: Yeah, it's a lot, it's more than my home country, Ireland. It's about the same as Google and Microsoft

Chris Adams: put together, yeah. Okay, so, wow. And

Killian Daly: So, it's pretty big stuff. And obviously, when you're working on something like that globally, looking at various electricity markets operating in 80 countries in these huge volumes, I suppose you, kind of learn a lot about what it means to buy power.

Chris Adams: I guess if you're looking at something which is basically as much power as an entire country, then there's going to be like country sized carbon emissions, depending on what you choose to power this from. And I guess that's probably why you, I mean, we, have ways of tracking power. I mean, tracking the carbon emissions from various things like this, I mean, called like the GHG protocol, which is a kind of like the kind of gold standard for talking about some of that stuff.

And this is something that I think you have some exposure to and I remember when you spoke to me, I remember us sitting down one time and you were telling me about There's a thing called scope 1 and there's a thing called scope 2, and that scope 2 was actually a kind of relatively new Idea where this came into this. Can you maybe tell me a little bit like maybe you could explain to someone who is Who's heard of, carbon footprinting, and they know there's a thing called scopes.

Why would anyone care about scope 2 in the first place? And how does it come about in the first place? Because it seems like it's not intuitive for most people when they first, when they start thinking about carbon footprints and stuff like that. 

Killian Daly: Yeah. I think the obvious, first thing you need to take into account when you think of like a company's emissions is, well, what are they burning themselves on site? do they have gas boilers burning gas? Are they burning coal to produce electricity? So that's, I think, very intuitive and obvious. But actually that is not the end of the story. And there's actually like a, a very funny anecdote. I put a true anecdote from the legendary Laurent Segalen, who does the Redefining Energy podcast and general energy guru. And he was actually involved in the kind of creation of a lot of the carbon accounting standards that are used today, this Greenhouse Gas Protocol standard, which is basically used by over 90 percent of companies now to report their carbon emissions.

It is the Bible of how carbon accounting works, right? and so 20 years back, he basically was, down in Australia and visiting an aluminum smelter. On site, they were explaining, "this is very low carbon product. we hardly burn any fossil fuels on site. This is incredibly, clean production." 

Chris Adams: The aluminium here, right? big chunks of aluminium. Okay, right.

Killian Daly: Aluminum, aluminum smelting. So like one of the, biggest metallic commodities that we have, very energy intensive. and so, he was there on site and just saw these big overhead wires coming in from yonder, from somewhere, right? And he said, hang on, what are the, what are those big cables above? and they were like, "oh, yeah, that's the electricity," obviously driving the smelter because aluminium, it's all about electricity. That's what power is an aluminium production facility. And so he said, well, hang on, where is that coming from?

They're like, "oh, no, don't, don't worry about that. That's not our responsibility." Well, it absolutely is, right? so you need to think about where is that electricity coming from? How is that being produced? And in that case, it was coming from a very large multi gigawatt coal power plant right next door. 

Chris Adams: Okay. All right. So I thought you were gonna say, oh, it's maybe a, something clean, like a hydro power station, but no, just a big, fat, dirty, great coal fired power station was the thing generating all the power for it. And that's where

Killian Daly: Absolutely. So, that's kind of the, just a bit of an anecdote is that's why it's so important to think about what we call scope to emissions, the emissions of electricity that I'm consuming, because especially as we electrify the economy, right, more and more emissions are going to become scope 2 emissions.

They're going to be related to someone else either burning fossil fuels to produce electricity and to give to a consumer or ideally, using clean energy sources to generate that electricity without carbon emissions. 

we need to think about this kind of properly and do the accounting correctly.

And unfortunately, we don't do the accounting very well today.

Chris Adams: Alright, so previously, before we even had that, there wasn't even this notion of scope 2 in the . , you might have just had direct, and then maybe this kind of bucket of indirect stuff, which is really hard to measure, so you're not going to really try to measure it. And okay, so, I remember actually reading about some of this myself, and I always wondered, like, where do some of these figures come, where do, where does even the notion of a protocol like this come from? And one of the things I realized was, particularly with the GHG one, was that they're like, when I listened to Laurent Segalen speaking about some of this, he was basically saying, yeah, this was essentially like Shell, the oil company, who basically said, "we have a way of tracking our own emissions."

And, why not use that as a starting point for talking about how we do carbon accounting? And then, scope 2 was a new concept. That was one of the things that they were kind of pushing for. But I suppose this kind of speaks to the idea of, who's in those rooms for those working groups to kind of, that is going to totally change the framing of how we talk about some of this.

And I guess that's probably why this, is this a little bit like why you started talking and getting involved with things like EnergyTags so you could take part in those discussions? Because it feels if this is what we're going to use to define how we do this or how we do that just like you have people talking about okay BP had an impact of changing how we think about carbon footprints from, from an individual point of view.

But you do need people involved in that conversation to say, "actually, no, that's possibly not the best way to think about this, and there are other ways to take this into account." I mean, is this why you got involved in the EnergyTag stuff?

Killian Daly: Yeah, it's one of the main reasons, because I used to do, so, work for one of the world's largest electricity consumers. And so I was responsible for calculating all of the electricity emissions for that company, right? Like doing the scope 2. And so I read the Greenhouse Gas Protocol back to front.

That was how the, all the calculations were done. That's what qualified clean and not clean, right? And I remember thinking, "this is an insanely influential document," right? It's kind of in the weeds. It's kind of stayed maybe, to some people, but I was

Chris Adams: of tedium around it, here. 

Killian Daly: Yeah. But the more I've gotten involved in things like regulation and conversations like that, that is where, it's in the annexes, it's in the details that the big decisions are made often. So I remember thinking back then, this is insanely influential and some of the ways that we're allowed to claim to consume clean energy are, frankly, disconnected from reality in a way that is just not okay, right?

As in this is far too weak. And definitely, I thought, someday I'd love an opportunity to be able to, say, "hang on, can we,

we fix this please? can we do this differently? Can we start to respect some sort of basic realities here?" So, yeah, it was definitely one of the drivers why I joined EnergyTag, which is obviously like a nonprofit that is, has as its mission to clean up accounting, right? And to clean up the way we think about electricity accounting. So, yeah, obviously it's a great honor, I suppose, to be part of those ongoing discussions in the Greenhouse Gas Protocol update process.

Chris Adams: So, We spoke before about how there, before there was even no scope 2, right? So that was like, the bar was on the floor. Right, and then we introduced the idea that, oh, maybe we should think about the emissions from the electricity. So that was kind of a bit of a leap forward by one person pushing for this, that otherwise wouldn't have been in the standard at all, right?

And I just realized actually now that you mentioned that, we spoke about oil firms being very involved in this and being very organized in this, and I remember people talking about Shell, that's what you use, and how much, and I'm just realising, oh Christ, Shell's in the Green Software Foundation as well.

We should, that's something I didn't really think so much about, but they're also there too. So they are organized. Wow. So let's move on. So maybe we could talk a little bit about scope 2 here. The thing I want to kind of get my head around is I'm like, can you maybe talk me through some examples of where this doesn't, this falls down a little bit, where might be a little, stretching your, you spoke about the physicality, the physical reality. where does it need a bit of work, or need some improvement that you're looking to do, looking to address in EnergyTag, for example? 

Killian Daly: Yeah, so basically, one way of doing scope 2 accounting is basically looking at the energy contracts or the electricity supply, contracts that companies have and saying, well, where are you buying your energy from? How are you contracting for your power? Right? And there's a kind of a number of fundamental issues.

One of them is around the temporal correlation, or between when you're consuming electricity and when the electricity you're claiming to consume is being produced. And today, right, we actually allow an annual matching window between production and consumption. And put in simple terms, what that means is that you can be basically solar powered all night long, right. You can take solar energy attributes from the daytime and use them at nighttime, or you could take them from the daytime in March and use them at nighttime in November. At any other time of year. And this just does not make sense, right?

Chris Adams: Not physically how the science works for a start. Maybe if I can just dive into that a little bit in a bit more detail because you've mentioned this idea of certificates for example or like claiming like that and as I understand it if I am running a solar farm right I'm generating two separate things. I'm generating power but I'm generating the kind of greenness so these are two independently sellable things which will sometimes be bundled together. That's how I might buy green energy. But under certain rules, they're not. They can be separated. So it's like the greenness that I'm moving or I'm buying and kind of slapping onto something else to make it green. Is that? And if it's at the same time, it's kind of okay. If it's from totally separate times of day, you do like you mentioned where you're saying this thing running at night runs at solar, is running on the greenness from a solar farm, which is stretching the, well, our imagination, I suppose, and your credulity, I suppose.

Okay, so that's one example of this is something that you wanted to get, wanted to get fixed. Are there any other ones, or things that you'd point people to, because

Killian Daly: I think you know the. The other, the other aspect, I think that's pretty, problematic in today's standards is so we've talked about time and the other big one is space, right? Today we allow consumers to claim to use green energy or clean energy over vast geographical boundaries that really don't respect the physical limits of the grid.

So, for example, the whole U. S. is considered to be one region, right? So you can buy green energy attributes produced in Texas and say that you're using them in New York. So you could be 100 percent power by Texas solar in New York. Or if you're in Europe, Europe is considered of one region. So you have really absurd cases where you can be powered by Icelandic hydro in Germany, and Iceland has never exported any electricity to anyone. There's no cables leaving Iceland. So, that just doesn't make sense. And this has real consequences because what we're trying to do is obviously drive consumers to buy green energy. If they're doing it in this way, then they're kind of, in some cases, pretending to buy green energy rather than actually going and buying green energy and incentivizing more production of green energy and clean flexibility that's needed to integrate that solar and wind, at every hour of the day.

So, that time and space kind of paradigm is maybe a good way of thinking about, some of the fundamental issues here. There are other ones. I don't know how far we want to go into the rabbit hole, but that's two very high level, and hopefully very kind of understandable examples of the problems we have with today's carbon accounting.

Chris Adams: Yeah, I think I understand why that would be something we would address, and so presumably this is the thing that EnergyTag's looking to do now. You're basically saying, well, the current system is asking you to make quite spectacular leaps of faith. And there are certain places where you do want to do leaps of faith and be super creative, but accounting might not be where you want to be super creative or super jumpy. That's not always where you want to have your innovation.

So that's, this is, so you're saying, well, let's actually be, make this more reflective of what's really happening in the world. So that we've got like some kind of solid foundation to be working on. So,

Exactly. 

Killian Daly: And just maybe on that point, this is not what we advocate for is not, it's not anything radically new, to be honest, because the way electricity markets work today, the way electricity utilities deliver power to customers, just you know, let's say pure gray electricity on electricity markets.

It is based on fundamental concepts of time matching. Power markets work on a 16, sorry, a 60, 30 or 15 minute, like balancing period. In Australia, it's 5 minutes. In Europe, there's things called bidding zones. So that's the area over which you can buy and sell electricity. And all of this is to kind of capture these fundamental physical limits of the power system.

You have to balance it in real time. And there's only a certain amount of grid capacity. And so you need to realize areas over which it's reasonable to trade power or not. So all we're saying is, make the green energy market much more like the real power market. So we're actually, if anything, trying to make it a bit more common sense,

whereas today, we're, quite detached from some of those basic limits that

Chris Adams: Ah, I see. Okay. So in fact, in some ways, there are some kind of comparisons where you could plausibly make where people there's a push right now for people to talk about treating environmental data with some of the same seriousness as financial data and apply some of the same constraints it sounds like something a little bit like that so if people are going to have basically take into account the physical constraints when they're purchasing the actual power part, they should think about applying their same ideas when they're thinking about the greenness of it as well. You can't kind of cheat, even if it makes it a bit easier, for example.

Killian Daly: Yeah, well, exactly. And, ultimately, what are we trying to do here? Is the purpose so that certain consumers can say that they have no emissions, or is the purpose to set up an incentive system so that when those consumers actually. Do you say they have no emissions that they've gone through all of the challenges of grid decarbonization?

So they've bought renewables. So they've invested in storage. So, fine, you can consume solar power at nighttime if you put it in a battery during the daytime. They're thinking about, demand flexibility. Are they consuming a bit less when there's less wind and sun? They're hard challenges, right?

We need to do a lot more of those type of things, and a proper accounting framework will make sure that in getting to zero that you have to think about and take all of those boxes. Whereas today, you can just be 100 percent solar powered and obviously that's just not going to lead to the grid decarbonization in the real world that we want to see.

Chris Adams: Maybe if you're in space it might work, but mostly no. Okay.

Killian Daly: Mostly, no. Yeah, 

Chris Adams: Okay, so we spoke a little bit about why there are some problems with the existing process, and like you, we've spoke a little bit, hinted at some kind of ways you could plausibly fix this. So do you, could you mind just talking me through some of the key things that EnergyTag is pushing for in that case?

Because it doesn't sound like you're trying to do something totally wacky, like, say you're never allowed, sorry, you're, it's not like you're asking for something like a significant change, like you're not allowed to split the greenness from power and or stuff like that. It sounds like you're still working inside the current ways that people are used to buying power and do all that stuff at the moment, right?

Maybe you could tell me about how it's supposed to work on the newer schemes that you're working with.

Killian Daly: Yeah. So basically what we're advocating for is that, if you're gonna claim to use green energy based on how you contract for power, then, well, you have to temporally match, right? So you can only claim to use green energy produced in the same hour as your consumption. Not in the same year, Okay. number 1. Number 2 is we need to think about the deliverability constraints, right,

and this geographical matching issue. And what we're saying is that, for example, in Europe, Europe is not a perfectly interconnected grid. And so you shouldn't be able to claim you're consuming green energy from anywhere else in Europe, you should be doing it, in the same bidding zone or, at least at a

Chris Adams: There needs to be some physical deliverable, physical connection to make it possible. Okay.

Killian Daly: Or fine, you can go across border, but you have to show that actually the power actually did come across border and that you're not violating like fun. You're not importing, 10 times more certificates than you are real power between 2 countries, right? So we need to have those, limits put in place.

And another thing that we think is important is that there needs to be some sort of controls on individual consumers just buying a load of certificates, for example, from very old assets. And I'm totally relying on those to be 100 percent green. For example, if I'm in Germany, right, and I just sign a deal with a hydro power plant, that has existed for 100 years and I'm time matched and I'm also within Germany, spatially matched, and I'm claiming to be 100 percent renewable

Chris Adams: it's not speedytransition if it's a hundred years old, that feels like that's stretching the definition of being an agent of that. Okay.

Killian Daly: that's another thing to kind of, you know, having this 3 pillar framework.

Sometimes we call about, and that is very important. I think for an existing consumer, it is legitimate to claim a certain amount of that existing power, but that must have a limit, right? You can't just be resource shuffling and "well I'm the one who's taking all the green energy" and everyone else is left with the, fossil that needs to be controlled also.

Chris Adams: All right. I think I follow that. So basically, so timely has to be more or less the same time, right? Deliverable, like you need to be able to demonstrate that the power could actually be delivered to that place. So deliverable there. And this other one was like, additional, like we need to transition, so you can't look at something which is 100 years old or 50 years old and say "I'm using that, I'm fine." There is this notion of bringing new supply stream to kind of presumably displace or move us away from our current fossil based default, which is not great from a climate point of view, right?

Killian Daly: Exactly. And I think one way, there's a really, a good friend of mine, who's in the Rocky Mountain Institute, Nathan Iyer, smart guy. We've worked a lot on US federal policy topics, and he actually has a really, good analogy about this stuff. BYOB, right?

So, yeah, of these 3 pillars. So, like, when you're going to a party, you need to bring your beer to the party on time. You can't bring it yesterday, you need to bring it when the party is happening. You need to bring it to the party, not to another party. And it needs to also be your own beer.

You can't just be taking someone else's. And it's it's kind of like a bit simplified, but it's a good analogy, I think for what we're trying to get out here. It's if we get everyone to start like thinking that way and acting on those kind of fundamental principles, obviously, we're going to end up being much more effective in deeply decarbonizing our power systems.

Chris Adams: So, decarbonization of the grid communicated through the power of carbonated beverages, basically. Wow!

Killian Daly: What could be better?

Chris Adams: I think it's, well, it's topical, at least it's still talking about CO2, just on slightly different scales, actually. I quite like that, actually. I might borrow that one myself, actually. Okay. So, there's one thing that you mentioned then. So this notion of, we spoke a little bit before about there's this idea of greenness that could be split, you're still keeping that, so you're not, saying, there's no ban on saying you're not allowed to sell power, that is unbundled from that, there is, that is still a kind of key idea of flexibility, could you maybe, I mean, cause from someone who isn't familiar with it, they might say, "why do we even have this, idea of being able to have separate these in the first place.

Doesn't this make things much more complicated?" I mean, I might be going down into the weeds, but is there a reason for that? is it just because that's how it's such a big change there that, or it's really hard to make that, to get people to shift to a new way of doing things or, what was that, what's the thinking around that part there?

Killian Daly: Well, basically, right, anytime you want to claim or have a contract, whether that be an unbundled or a bundle PPA contract, 

Chris Adams: Power Purchase Agreement, right?

Killian Daly: Yeah, a power, like a long term power purchase agreement, for example, right? so anytime you have a contract for a specific type of electricity, you need an accounting mechanism or a tracking mechanism that kind of sits on top of the grid and allocates generation to consumption, because

obviously, the way that the grid actually works, is that electrons are just oscillating around the place. there's not really a methodology to physically trace this individual electron started here and went there, right? And so, much like power markets do, and they have mechanisms for contractually allocating power between different buyers and sellers, as long as it's matched in time and space, that's a fundamental premise of our power markets work, we're basically borrowing that concept, but attaching the greenness attribute,

Chris Adams: Ah,

Killian Daly: and saying "provided that this system, of detaching greenness from the power is respecting temporal and geographical matching requirements, deliverability requirements, sufficiently, then that should be the basis of legitimate green claims and that essentially creates a market mechanism for financing renewables.

If you don't do that, then you cannot have a green power market basically, right? You,= don't have a way of differentiating buyers who are contracted for green power and those who are not doing anything. So, yeah, for example, a few years ago in Air Liquide, we only did this, we didn't look at what contracts we were sourcing.

We just did this location based accounting where you take an average of all the generation in the grid. Which is another way of looking at electricity emissions and a very valid way of doing it. But obviously one disadvantage that has is that it basically leaves all consumers passive.

They have no incentive to do anything in terms of driving electricity decarbonization. So that's why we need these, these mechanisms of essentially having tracking 

Chris Adams: systems. 

Oh, okay, I see. So, if you, if there's no recognition, if I'm working at a large company, why would I, why would I choose to buy something green if I can't be recognized for me doing something, doing that green step? And, so the downside of the location based approach is that yes, it gives you one single answer, but it takes away this idea that organizations which have honestly massive amounts of resources can influence or speed up a transition.

That's what it seems to be a kind of it's trying to respect that reality or at least acknowledge that this is what we expect of organizations if they're that powerful.

Killian Daly: And one person, I know you've had Olivier Corradi from Electricity Maps on before they've done, some very good blog series on this topic. They're obviously have insanely deep knowledge of grid emissions is really no one better that I've come across.

And they did a very kind of simplified explanation of this stuff. And you have the location based method, which is like maximizing physical accuracy and then you have the market based method, which is trying to maximize incentives and financing. And what this 24/7 accounting framework that we're advocating is basically trying to make those things meet in the middle, right? Today we have a market based system that is too much focused on, I would say, flexibility, making it easy for people to say they're green. and so has led to very valid criticism. And what we're trying to do now is bring that market based mechanism back closer to the physical realities of the grid,

Chris Adams: Oh, I see.

Killian Daly: But keeping the, incentive system, because if you don't have that, then, well, I don't really see the point in even doing the exercise.

Chris Adams: Okay. So there's two things that I wanted to kind of just see if I could maybe dive into a little bit on that then. So it sounds like this whole notion of not having this stuff tied to each other is to reflect the fact that people have all these complicated ways to purchase power in the first place.

So in my world as a cloud, as like someone working as a cloud engineer, right, I might buy computing by the hour, but I might also buy it, in advance for three years, for example, for a lower price, and that, that provides a bit of stability for whoever's running my server, but this kind of, this is an example of me having multiple different ways of being able to buy something, and essentially, some of that unbundling there is actually trying to capture the fact that there is, there are all these complicated ways to arrange to pay for something, and this is one way that we can use to value some of the Flexibility and stuff you said before.

So for example, you spoke about you can't run something on solar power, right? But if you had a battery, you can capture that and then use a battery bit like a time machine to kind of run at night almost right so but therefore you're trying to but that's more expensive than just making some claims.

So you need to have some way to recognize the fact that it takes a battery and a bunch of extra smarts to run something at night from that. That's what you're trying to go for with that, right?

Killian Daly: Yeah, exactly. And again, basing things on how power markets contractual, they have ways of already have contracted with allocating power between generators and consumers. I think the biggest issue with unbundling, so, selling the energy attributes and the power to different people. Actually, I think what the fundamental problem is the lack of time matching and deliverability requirements. That's where unbundling has gone wrong. Because it's, it said, "we're going to take the green attribute from this energy in Norway, and we're going to allow it to be used at any time of year, anywhere in Europe."

That's insane. That's where it starts to get completely insane. I don't have any particular problem with you producing it in one hydro plant, and selling the power into a power pool. and then that being consumed in Norway in the same hour. That's literally how power markets work on a short term power market.

Everyone bids into a common pool. And why not just put the attributes into the same pool and well, they, all have the same properties anyway. So it doesn't make a difference. It's the only way you're ever going to have liquidity, right? so I don't see any fundamental issue with, that.

The fundamental issue is with the annual matching and the

Chris Adams: the physics beyond breaking point, essentially.

Killian Daly: And that's, I think that's why I'm bundling, it's got such a bad name, right? And I think that's actually been fair, but I do think that it's not that bundling around bundling or necessarily the issue is, kind of the

Chris Adams: like those three pillars you mentioned. Okay, gotcha. Thank you for indulging me as I went down that thing, because I didn't know the answer to that, and I've always been wondering. Okay, so, we spoke about this thing called EnergyTag. We've spoke a little bit about how it's supposed to work and how it's basically an improvement on some of the approaches before.

And, maybe we could talk a little bit about who's using it? Is anyone, adopting it? maybe we could go from there, because this sounds like a cool idea, but there are many, cool ideas. That no one is paying attention to. And I suspect that would be quite a demoralizing conversation if that was the case.

So, yeah, I mean, who's using this and where, are there any kind of big name adopters you might point people to or anything like that?

Killian Daly: Yeah, so, yeah, two of the leading ones that kind of come to mind immediately, obviously, especially for software folks like yourselves or Google and Microsoft, they have 24/7 clean energy targets by 2030. Basically, they're committing to buying clean power for every hour, their data centers are consuming electricity, everywhere in, in which they're operating.

So they're two of the most, I would say, advanced, ambitious, corporate climate commitments in terms of scope 2 electricity procurement, at least. And they're obviously two major buyers. And they've been signing some really interesting deals as well. So there's, gigawatts now already of these 24/7 or close to 24/7 PPAs signed, 80, 90 percent firmed, portfolios of renewables, and that's game changing, right?

that's something we've seen emerge in the last few years where traditionally, the way of buying renewables has been "I'm going to buy a solar contract, and I'm going to blend that into whatever I'm buying elsewhere." And that's fine, right? But it's only giving you maybe 20, 20 percent of your electricity on an annual basis.

Now, we're seeing new contract structures that are blending together. Solar, wind, batteries, and getting maybe 80, 90 percent like of a flattened,

Chris Adams: so that's what I mean by firmed then, so firmed is this idea that it's basically it's when you say, so if it's not firmed, it's like I'm gonna buy the same amount totally without thinking about when it's matched, but if it's firmed then I am trying to think, I'm taking the steps necessary so that I can make a much more credible claim that the power I'm using is coming from generation or from stored amounts of power or something like that.

Ah,

Killian Daly: And that's, as I said, there's gigawatts of deals done already to date. Are there people doing this hourly matching stuff? Yes, absolutely. Check out our website. There's 30 projects there, with millions of megawatt hours of hourly matching being done.

So, this is not 40 organizations or something doing it 5 continents. So, This is not rocket science, right? This is literally taking meter data. That's very common, hourly production and gen data. You could do it on an Excel file with three columns if you wanted, and matching those things together and seeing where we're at. So it's absolutely demonstrated and leaders are doing it. Is everyone doing this? Is this now the status quo way of doing it? No, absolutely not. And that's what we work every day to try change, right? so we're still, I would say, relatively in the early days of this transition, but, as far as I'm concerned, it's kind of inevitable for credibility reasons, transparency reasons also for pretty fundamental economic reasons. Companies going out there and committing to buy loads of energy that is unmatched to their consumption profile.

They're leaving themselves open to a lot of risks. So, what if you say, okay, I'm just going to buy a load of solar. That has no connection to how I actually consume electricity. You're leaving yourself open to a lot of volatility that we're seeing electricity markets today. A lot of super high prices in the evening.

For example, when you're, when your solar contract is not delivering you anything, then what do you do? Right? you have all this gas volatility and exposure. So it's not just about decarbonization. It's also about things like electricity price hedging. So there's kind of various, I think, fundamentals that mean that.

We are going to move in this direction.

Chris Adams: okay, so So if I understand that final point that you've basically made is if I want to do this kind of matched thing for example, or if I want to, if I want to be buying some power, one of the advantages of doing like a longer term deal is that there's a degree of stability. So let's say, I don't know, a one country decides to invade another country and then totally make gas prices go through the roof.

I'm somewhat insulated from all that stuff so that it's not gonna massively destroy, it's not gonna destroy the, make impossible to kind of pay my own bills, for example. And like we've seen those of examples of that over the last few years, for example. So there's a bit of insulation from that kind of stuff.

Yeah.

Killian Daly: Exactly. So now we do get into kind of contracting mechanisms here. It's a little bit similar to what basically, if you're committing to a fixed price, for example, for a number of years, if you sign like one of these PPAs and you commit, let's say, to a 10 year fixed price for power. And if you're committing to like a affirmed profile, let's say 90 percent matched,

that has a very significant hedging value. So it means that basically you fixed like a lot of your power price. So no matter what happens, if, there's a massive spike in gas prices and power prices go through the roof. You're protected against that. We actually worked on a really interesting study on this a couple of years back or 18 months ago that said.

With Pexapark, who are like PPA analysts, and they basically showed that like a 10 megawatt consumer in Germany could save over 10 million euro, in the best of cases, and at least millions of euro in a given year by signing these 24/7, or close to 24/7 power purchase agreements with clean electricity assets, because one thing that clean energy has as an advantage in an ever more uncertain world is that the costs are basically known up front. You know how much money you need to build a wind turbine to build a battery up front.

It's all capex heavy. And that means that renewables can basically Give you a fixed price up front where honestly, gas cannot, because, most of their costs are operational. It's about buying the gas when you need it to.

Chris Adams: And there's a constant flow is not 

Okay, I guess with the sun, I mean, there's maybe a scenario where, I mean, it's not like there's a Mr burns style blackout of the sun kind of thing, right? if you're relying on something where no one has control over, no one can, kind of blockade the wind or blockade the sun.

That's where some of the stability is coming from, right?

Killian Daly: Yeah, exactly. Right. so you have those things, and you know that those fuel sources basically don't cost anything. Right? so you're all your costs are in construction, materials, all things you basically know, largely upfront, and that does enable you to provide long term contracts, typically way beyond the terms that fossil fuel generators can offer.

And so it can protect you for, the consumers willing to take that long term price risk. It can really offer really significant hedging benefits. not above alternatives.

Chris Adams: Buy that on like the spot market as it were or buying something just like on the regular market. Okay. All right. So, so you mentioned a few large companies doing that stuff and outside of technology, I know that 

I think it's the federal government. They've, it sounds like you said one or two things, which are quite interesting.

There is this idea that 100 percent is obviously really, good. Right. And that's what you want to head towards. But given there are some places where aren't, they're not going, they're not shooting for 100 percent straight away, for example, they might be going for 50 percent or 60 percent or something like that.

This is something that is kind of okay to do, or that's okay to start at. Cause I think I heard about the government, the US government had a plan for something about this by 2030 or something.

Killian Daly: Yeah. So basically, what we, we started the conversation talking about accounting. So I think the first thing you need to do is get, the accounting right. So that when you say 50, it means 50 or when you say 100, it means 100 because if you're just saying 100 and it means 50, then well, you're screwed, right?

You have a bad system. So, I think, actually being at 70 percent renewable, but saying that out loud

Chris Adams: 70%. Yeah.

Killian Daly: and addressing the, the basic fact that you're only there that's much better than kind of saying I'm 100 percent renewable on some annualized basis and kind of like misleading people about where you're at with, decarbonization.

Chris Adams: So it's better to be a real 70 than a fake 100, basically, yeah? 

Killian Daly: Yeah.

And, so, you have, electricity, like suppliers, for example, who are, there's like Good Energy in the UK, Octopus Energy in the UK, most of the electricity suppliers now in the UK, in fact, are, offering these like hourly tariffs.

And, I don't think any of

Chris Adams: it was only one or two that did that. Whoa. That's

Killian Daly: Now, I think this year it'll become more, a kind of a norm, where they will offer this alongside their a hundred percent renewable tariff. And none of those hourly tariffs are gonna start off being a hundred percent renewable, but it's bringing that extra bit of transparency, which I think is great.

And, the likes of good energy, they're already offering to thousands of customers, right? This is not just the Googles and the Microsofts who have their long term targets on this. This is already being offered to thousands of customers around the world because electricity suppliers are basically taking.

They're doing all the work. They're just giving the consumer the number on some dashboard saying, this is how much matching you have. if you look at the Octopus Energy example, it's quite interesting. They have a tariff called Electric Match for some of their B2B customers and they're actually basically reducing your price of power. when you're more matched, so that's quite cool, yeah, they're charging you less the more that your demand is matched to their generation. Right? And I think that's quite a cool gamification of this. They're saying basically try to consume when there's more wind and sun in the UK, you'll be more matched and we'll cut, we'll cut your rates because obviously it's sort of, it costs them less to deliver that in the first place.

So that's. That's the type of cool mechanism.

Chris Adams: So, I swear, every single time I speak to energy people, and they say, "oh yeah, the price is totally changing." Then I think of one level up, when we're like paying for cloud, and it's the same price all the time. Someone's making a bunch of money off us doing all the kind of carbon aware computing stuff, because if the price is going, low, I would expect to see those numbers go low.

This feels like something we might want to have a conversation about inside the tech industry then, if they are, if there's savings being made here, because it feels like it would be nice if those were passed on, I suppose. So, all right, let's speak, go on,

Killian Daly: I think just very importantly, of the, the more I think one fundamental truth that we're going to see,

it's already the case in some parts of the world, but this is going to be an essential truth of the transition. The more renewables you have, the more volatility you're going to have in power prices. And the more flexible you can be in your consumption. It is going to be very rewarding economically, if you can consume, at the times of day when there's loads of wind and sun, power prices are going to be very low and you're going to get rewarded for that. If you can't, if you can only be base load, then that is going to cost you.

Chris Adams: Ah, okay, alright. Okay. Alright, that's it, that's a useful thing to take into account. And so, we spoke before about, scope 2 and stuff like that, and you spoke about this idea that you're defining this standard. Now, EnergyTag is a standard in its own right, but, as I understand it, it's not like you're stepping outside of this.

You are still engaging with the protocols and all the stuff like that right now, yeah?

Killian Daly: Basically, so yeah, 

EnergyTag is a nonprofit. we do a couple of different things. we're obviously focused on this area of electricity accounting, electricity markets and better green energy claims and all that. And so yeah one of the things that we do is we have a voluntary standard for hourly energy tracking because one of the kind of blocking points we have today, is that the way we do this tracking with these energy certificates, it tends to be on a monthly or even an annual basis globally.

And sometimes we don't have the information on the certificates to do this hourly matching. So we're trying to un debottleneck that particular technical issue. Think about how do we track through storage, like doing some novel things there. So we have a standard for that, but that's only one of the building blocks, I would say of this much larger question of, like, how do companies do electricity accounting or how do they do carbon accounting more generally? Our standard is there to work on that specific topic, but actually a lot if not most of what we do today is like working on policy advocacy around the world, working on global standards and basically advocating for those to change because ultimately it's the meta-levers, regulations,

standards. Once they change, then we're just there to help technically put that all together with some voluntary standards as long as they're needed.

But it's not our aim to be the world's next greenhouse gas protocol. That's really not in our wheelhouse. What we want to do is make sure that global standards and regulations are as good as possible.

Chris Adams: Oh, I see. Okay, so that, so if we go for a concrete example of this. So, in Europe, if you want to do a hydrogen project, which is, in some ways, kind of a bit like an AI project in that it's like a building that uses loads and loads and loads of power in one place, right?

Really dense. If you're going to make, green hydrogen, for example, you're taking water, adding loads of electricity to split that, and that's incredibly energy intensive. So you've probably want that, if you want the green hydrogen to be green, probably only use green energy. And one of the things you told me about before was, yes, we won that fight so that any, and if people want to get any of the subsidies from the government to kind of do this green energy thing, they need to have those three pillars style approach, right?

That's what, that's an example of your strategy, yeah?

Killian Daly: Yeah, so this is actually the reason I what really brought me into EnergyTag, it was a Greenhouse Gas Protocol thing, but basically are the key to one of the world's largest hydrogen producers. Right? And so I got put onto this topic a few years ago, which I found incredibly important and fascinating and, maybe not well enough understood.

It's like, when we're going to produce hydrogen using electricity, we need to really make sure that the electricity is squeaky clean, because of the efficiency issues and losses that you just inherently have with electrolysis. And so, just to give a quick example, Jesse Jenkins lab in Princeton University, a guy called Wilson Ricks, who is a rock star of power system modeling, they model this right?

And they show that in the US, if you basically use today's carbon accounting rules, this annual matching stuff, and you built out a hydrogen sector based on those rules, you will have hydrogen that is twice, maybe even three times as bad as today's fossil fuel hydrogen production. and you'd be calling it clean and subsidizing that production. Totally insane, just literally wasting money.

And so it's actually really, important. Billions of dollars of subsidy are going to go into hydrogen in Europe and in the United States. And so we worked a lot with NGOs, advanced companies and other partners to advocate for these strong requirements on green electricity sourcing for hydrogen, both in the US and also in Europe, and we won on both fronts, which has

Chris Adams: Oh, the US way as well!

Killian Daly: Yeah. Yeah. Yeah. Yeah. And it hasn't been, so both of those are legislation in 

Chris Adams: place.

They're in! Yay science!

Killian Daly: Yeah, that's the legal way now to qualify for the tax credit in the US. In Europe, there's a phase in period on the hourly part to 2030. So, in 5 years or whatever.

But anyway, projects built now, they have to be designed to comply with that. And so, 

Chris Adams: if you know,

it's going to be in the law of five, you're just going to make sure you 

Killian Daly: going to start doing it now, right? more or less. yeah, so that's, yeah, obviously, this is kind of like hundreds of millions of tons of CO2 per year on the line between good and bad rules and that, that's kind of a concrete example of, why these things matter. Right? Like accounting sounds boring sometimes. I definitely thought it was boring before I realized like, "Oh my God, I'm working for a huge power consumer and this is changing everything." So yeah, it's definitely super, super important that we get this stuff right.

Right.

Chris Adams: Okay, so we spoke about, it sounds like you've done the work with Air Liquide and you've kind of essentially laid the groundwork to move from a fossil based hydrogen thing to hopefully a greener way of making hydrogen, which ends up being used in all these places. And now it seems like you've got the, okay, you said Google and Microsoft, same power usage as Air Liquide in a single year.

Maybe they might've changed, but back then, there's, so it looks like we're seeing some promising signs. For that over here. So maybe, I mean, if we, want to see that, what do we need to see at a policy level? Do you need to have, government saying, "if you want to have green energy for data centers, you need to be at least as good as the hydrogen, industry."

Is it something like that you need to do? Because what you've described for the hydrogen thing sounds awesome, but I'm not aware of that in the, kind of IT sector yet. That's something that I haven't seen people doing yet. 

Killian Daly: That is also coming, right? So hydrogen has just been the first battleground or the first palce, I think. 

Interestingly, actually, on the 14th of January, just before the inauguration of Donald Trump, as US president, so the Biden administration issued an executive order, which hasn't yet been rescinded.

Basically on data centers on federal lands and in that they do require these 3 pillars. So they do have a 3 pillar requirement on electricity sourcing, which is very interesting. Right? I think that's quite a good template. And I think, we definitely need to think about, okay, if you're going to start building loads of data centers in Ireland, for example, Ireland, 20 percent 25 percent of electricity consumption in Ireland is from data centers. That's way more than anywhere else in the world in relative terms. Yeah, there's a big conversation at the moment in Ireland about "okay, well, how do we make sure this is clean?" How do we think about

procurement requirements for building a new data center? That's a piece of legislation. That's being written at the moment. And how do we also require these data centers to do reporting of their emissions once they're operational? So, the Irish government, is also putting together a reporting framework for data centers and the energy agency.

So the Sustainable Energy Authority of Ireland, SEAI they published a report a couple of weeks ago saying, yeah, they, you know what, they need to do this hourly reporting based on contracts bought in Ireland. So I think we're seeing already promising signs of legislation coming down the road in other sectors outside of hydrogen.

And I think data centers is, probably an obvious one.

Chris Adams: So people are starting to win. Wow, I didn't realize that. I knew somewhat about that there was an executive order that there was a bit of buzz about. But I didn't realize that, set the precedent. So, yeah, we should do what that massive industry over there is doing because that's now the new baseline that, that's where the bar should be.

We should do that as well, basically.

Killian Daly: Exactly, because that those hydrogen rules, it's actually what it actually is. Well, actually, the whole debate was about is what is clean electricity procurement? What does that mean? What does it mean to use clean electricity? And that has been defined now in hydrogen rules and that can be copy and pasted to any large new load.

Well, if you want it to be clean, we already know the answer. It's in legislation,

Chris Adams: It's how to tell when energy is green,

Killian Daly: MIT, IEA, the who's who of energy experts have all modeled this and they've all found that this is the way to do it. So, there's a template there, right? And it's, if you're going to go against that, it, yeah, well, obviously, then you're, obviously sacrificing the integrity of your accounting schemes.

Chris Adams: Wow! That was, we spoke about how to tell when energy is green, and you've, We seem to be ending on a high, I didn't realise we'd actually got to that. That's really, awesome. You've really made my day for that, Killian. Thank you so much for coming on and diving into the minutiae of carbon accounting for electricity, but also ending it with a slightly less depressing piece of news, which I'll take in this current political climate,

Killian Daly: just to interject before I say goodbye, there's one, one really, it's good to end on a positive note, I suppose, in this mad world we live in. 

There was a project announced recently. I think people should go check it out in the Middle East in UAE, where basically for the first time, they're going to deliver basically, around the clock solar power. So 1 gigawatt of solar, all night long because they're basically, building a massive battery and a huge solar farm, and basically all year round is going to deliver, green electricity at under 70 us dollars per megawatt hour, which is extremely competitive.

So, I think solar and storage, what they're going to do together is going to be, is going to change the world. Right? I really think that is going to happen faster than people think. They're going to start to kill gas. So, yeah, I think green energy economics, despite what politicians will want to do with their culture wars,

I think will at the end of the day, hopefully, answer some of the questions we're trying to solve here. So, yeah, thanks so much for having me on. It's been a real pleasure.

Chris Adams: Brilliant, thank you so much for that mate, and may the fossil age end. That's really, that's so, so cool to actually see that, I totally forgot about the Masdar thing, which is the city. Yeah, and we'll share a link to that so people can read about that, because if you care about, I don't know, continued existence on this planet, then yeah, it's probably one to, good one to read about.

Killian, this has been loads of fun, thanks a lot mate, and next time I'm in Brussels I'll let you know, and maybe we can catch up for, have a shoof or something like that. Take care

Killian Daly: Yeah. A hundred percent. Thanks. Bye.  

Chris Adams: Hey everyone, thanks for listening. Just a reminder to follow Environment Variables on Apple Podcasts, Spotify, or wherever you get your podcasts. And please do leave a rating and review if you like what we're doing. It helps other people discover the show, and of course, we'd love to have more listeners.

To find out more about the Green Software Foundation, please visit greensoftware.foundation. That's greensoftware.foundation in any browser. Thanks again, and see you in the next episode.