How are PECs issued for energy storage different than carbon offsets?

Attribute certificates and carbon offsets play critical roles in the clean energy and carbon markets; however, their structure, purpose, and application differ significantly, especially when applied to utility-scale energy storage systems.

PECs offer an alternative approach to carbon offsets for energy storage due to their precise alignment with actual energy generation and usage patterns. Unlike carbon offsets, based on counterfactual baselines, attribute certificates are directly tied to the specific environmental attributes of the electricity generated, stored, and discharged. This granularity allows for a more accurate and transparent accounting of the emissions impact of energy storage operations. By using hourly data and understanding the marginal emissions at each location on the grid, PECs ensure that the real-time benefits of energy storage —such as reducing reliance on fossil fuels during peak demand periods— are properly quantified and rewarded.

	Attribute Certificates	Carbon Offsets
Representation	The carbon intensity and other attributes of a unit volume of electricity injected into the power grid. Traditionally, this has been one MWh of wind or solar energy with an understood carbon intensity of zero.	Avoiding or removing one ton of CO2e from the atmosphere is achieved through various projects such as reforestation, renewable energy, and energy efficiency improvements.
Use Case	Used for RPS compliance and voluntary GHGP market-based scope 2 reporting.	Commonly used with GHGP Scope 1 and 3 reporting.
Issuing Authority	PEC and EAC Registries	Verra, Gold Standard, or other carbon credit verification bodies.
Producer Benefits	Additional revenue; Enables forward carbon contracts.	Additional revenue; Enables forward carbon contracts.
Producer Challenges	Purchase PECs to neutralize storage charging impact.	The verification and validation process can be rigorous and costly; Not available in all geographies or configurations.
Buyer Benefits	Enables “virtual hybrid” and other novel PPAs (emissionality-indexed and 24/7); enhanced transparency and precision.	Established market; Wide use in GHGP scopes 1 and 3 carbon accounting.
Buyer Challenges	Use in voluntary carbon accounting	Voluntary carbon market risks