What is hourly matching and what does it mean for your business?

Hourly Matching in Practice series

Hourly matching, also known as 24/7 carbon-free energy, granular matching, or round-the-clock clean power (depending on who you are talking to), is causing quite the stir at the moment. It has been championed as an effective approach in addressing the greenwashing concerns of current corporate clean energy reporting frameworks, while accelerating deep decarbonisation. With indication that hourly matching will play a role in the Greenhouse Gas Protocol’s revision of its scope 2 emissions reporting guidance, businesses will soon and often encounter this concept in their own emissions reporting or when renewing electricity supply contracts.

Over the next weeks we'll help you get an understanding by launching:

Part 1: What is hourly matching and what does it mean for your business?

Part 2: What is a good matching score?

Part 3: How can hourly matching work without hourly certificates?

Part 4: How and why are businesses getting started with hourly matching?

What is hourly matching?

This section is for readers who are new to hourly matching. If you’re already familiar, feel free to skip ahead to the next section for business implications.

Imagine you are the CEO of a co-working space, and one of your tenants requests oat milk be provided in addition to cow’s milk. They are big fans of oat milk and consume a bottle per day, so each week you get 5 bottles of oat milk delivered on Monday. However, to your dismay you discover that this oat milk only has 1 day of shelf life! Your oat milk-loving tenant only gets to drink oat milk on Mondays, and therefore only has 20% of their oat milk needs met over the week, despite you having bought enough oat milk to cover 100% of their weekly consumption.

This scenario may sound silly, but it is exactly what is happening on the energy grid today. Businesses who are buying 100% clean power are being provided with enough clean power over the year, in the same way as our oat milk enthusiast had in theory been provided with enough bottles over the week. However, if businesses buying clean power take into account when the power was produced, many will find that they are “going thirsty”, so to speak. While these corporates may have purchased enough green power over the year, it was not necessarily available when the business needed to consume it. In the hours when their purchased green power was not enough to meet their needs, these businesses were powered by fossil fuels instead, denting their green credentials. When power is produced and consumed is therefore just as important as how much, if you want to understand the effectiveness of your business’ clean energy purchases. This is because electricity cannot be easily stored. Grids need to be kept perfectly in balance, and the challenge facing many grids today is that at certain times, too much renewable energy is being generated, while at other times they are dependent of fossil fuel power stations. The annual matching practice for clean energy accounting doesn't take this basic principle into account.

This brings us back to hourly matching: this is simply the practice of measuring what proportion of a business’ energy needs were met by clean energy in every hour instead of over the whole year. It's like checking whether employees are paid every month rather than just confirming the annual total was correct. This more granular picture lets businesses measure the effectiveness of their clean energy procurement much more precisely. The effectiveness of the procurement is usually expressed with two main metrics:

• The hourly matching score, which is the proportion of hourly consumption that was met by purchased clean energy, expressed in %.
• The hourly carbon emissions, which are usually broken down into market-based and location-based carbon emissions. These are your business’ hourly scope 2 carbon emissions under the GHG Protocol. You can find out more about these carbon emissions and how they work in the article linked here.

If you are interested in the benefits of hourly matching to the energy system, or want to get into the details of how hourly matching scores are calculated, check out the excellent linked articles written by my colleagues Charles and Ruaridh. However, in the immediate term, you are probably thinking: so what? How will this affect my own business’ day-to-day activities?

What will hourly matching mean for your business’ day-to-day operations?

Sadly for the energy enthusiasts among you, hourly matching won’t change much for your business’ daily operations. For the vast majority of businesses, the only sign of the shift to hourly matching will be some new numbers appearing on your energy bills —although if you’re lucky, your business might also receive some nice graphs like the ones included below!

These new numbers appearing on your energy bills are your matching score and your hourly carbon emissions, and will look something like the following:

An example of the new figures you may see on your supplier’s energy bill. Note how this consumer is 100% green on an annual basis, but its hourly matching score is lower.

While hourly carbon emissions and matching scores are not easy to calculate, as an energy consumer, you don’t need to worry about this. In the same way that you are not expected to calculate your own energy bill, you are also not expected to calculate your own hourly matching score or hourly carbon emissions. Your energy supplier will provide these for you.

Your sustainability reporting will therefore follow exactly the same process as today, except you will add the hourly location-based and market-based carbon emissions to the report, as well as your annual emissions. Easy! Once you have your hourly matching scores, you may also wonder whether they are any good — don’t worry, we will cover that in part two.

If you are signed up to an energy supplier that offers this, you may also receive access to a dashboard letting you explore your energy consumption and allocated supply on an hourly basis. With this improved level of detail, you are now equipped with better data to inform your business’ decarbonisation journey. You may even realise you left your office AC running at the weekend, and significantly reduce your energy bill! (We have encountered this a lot more often than you would expect).

Hourly demand vs purchased clean energy.

To summarise:

• Hourly matching is a more granular method of accounting for a business’ clean energy procurement, by asking not just how much clean energy was purchased over a period, but also when it was produced/consumed.
• Your hourly matching score is the proportion of your business’ hourly demand that is met by procured clean energy.
• The move to hourly matching will not make much difference to the daily operations of most businesses and corporates, barring a few new numbers appearing on their energy bills.
• No, your co-working space does not track its oat milk matching score.

One last thing…

You may have noticed that we did not cover the key role that EACs (also known as GOs, GECs, i-RECs, RECs, or REGOs) play in tracking the clean power purchased by corporates. We will cover how these certificates work and how their role is changing in the third article of this series. If you can’t wait until then, however, you can check out this article about how we can move legacy EACs into the hourly matching age by giving them a “shape”.