For years, corporate carbon accounting has relied on the idea that a megawatt-hour of clean electricity bought at any point in the year could offset a megawatt-hour used elsewhere. While this approach supported the early build-out of renewables, annual “100% carbon-free” claims are no longer enough if we aim to reach net zero.
With the Greenhouse Gas Protocol’s Scope 2 update now through its first public consultation, companies are starting to plan for what the outcome could mean as the annual claims era is drawing to a close. The direction of travel for several regulatory and voluntary frameworks points unambiguously toward hour-by-hour, region-by-region accuracy. If a company makes claims about net-zero operations, it will soon need to back them up by demonstrating the precise hours when those electrons were drawn from the grid.
For data centers dedicated to artificial intelligence, with their constant load and five-nines reliability requirements, the updated Protocol heralds a fundamental rethink about procurement strategy.
Clean energy ambitions and realities
In Europe, data center electricity use amounted to 96 terawatt-hours in 2024, and could hit 236 TWh by 2035 — a 150% jump, according to recent figures from Ember. BloombergNEF forecasts 106 gigawatts of data center power demand in the U.S. by 2035. Even under the most optimistic scenario, demand is set to outpace new renewable generation deployment.
Dealing with surging demand, especially from large loads with deep pockets like AI data centers, may be a good problem to have. But it also brings reputational pressure. Governments want to show they’re building the cleantech infrastructure of the future. Corporate customers want proof they can use to validate their own claims of net zero progress. And utilities face pressure to show that serving large new loads won’t push network costs onto households.
The challenge for data centers is their flat, round-the-clock load. Annual tracking models don’t address the need for nighttime supply, and data centers simply might not know how many of those hours go unmatched.
Though energy accounts for up to 46% of a data center’s costs, many don’t track the performance of a power purchase agreement after signing. If a PPA is poorly matched to actual load, it exposes operators to negative prices and the kind of price volatility we’ve seen in Europe.
This sets up a key question: What can data centers do when squeezed between rising costs and customer pressures, and market conditions that don’t always work in their favor?
Moving beyond annual certificates
Since grid electrons can’t be tracked once they enter the grid, time-stamped certificates offer an alternate mechanism. Until now, a “100% renewable” claim could be based on annual consumption volumes offset by yearly certificates, either unbundled or as part of green tariffs or PPAs. This helped early renewable build-out, but annual tracking no longer reflects how electricity is actually used across the day.
Big Tech was the first to signal that change was coming. When Google announced its ambition in 2020 to pursue 24/7 carbon-free energy, its own data revealed the scale of the gap; while Google achieved a 100% annual renewable match in 2019, its hourly carbon-free share was only 61%.
Under annual accounting, a solar PPA generating at noon could offset fossil fuel use at midnight. The GHG Protocol’s proposed temporal and geographic specificity would remove that option. Renewable energy supply will have to match consumption in the actual hour, and within a defined market boundary. That raises the bar in terms of what counts as credible progress — and what companies must actually procure to support their claims.
The operational case for hourly matching
Electricity prices settle by the hour, not the year, so a PPA that delivers clean energy when a facility isn’t consuming it won’t reduce cost risk. Uncovered hours expose data center operators to volatile spot pricing, while excess generation may need to be sold back into the market at low-margin or even negative prices.
In practice, the effectiveness of a sustainability claim and the effectiveness of a hedge are closely linked. Both will be defined by how well the energy portfolio matches load shape, hour by hour. Strengthening that alignment trims back exposure to the most painful price dips and spikes.
It also opens the door to new contract structures. Buyers are now turning to solar-plus-storage and wind-plus-solar PPAs, using technology mix and batteries as flexible bridges to cover generation gaps. A 2023 study of the Finnish market by Eurelectric and Pexapark shows that moving from a single-tech PPA to a solar and wind combination achieved 75% hourly matching.
Implications for data center operators
The state of the market has several implications for those who run data centers.
1. Real-time carbon data becomes essential
As the era of reporting a single annual Scope 2 emissions number draws to a close, operators will need access to hourly grid-carbon data, emissions signals, procurement timestamps and load curves.
2. Portfolio mindset required
Achieving a higher hourly matching score typically requires a more diverse mix of technologies and even storage and/or flexible supply than annual matching, especially in regions with variable renewable generation. That forces a change to a portfolio mindset: solar for daytime, wind for evenings, and geothermal or hydro for firm supply. To cover any gaps, battery storage necessarily comes into play.
3. Measurable business benefits
Better alignment between supply and load strengthens the hedge and reduces exposure to price swings, but data center operators need reliable data to unlock them.
4. Knowing which hours will drive future value
The shift to hourly evidence means that not all clean energy certificates are equal. The hours with scarce supply, and the assets that reliably cover them, are likely to become the most sought-after. Spotting these early is an advantage.
5. Storage ceases to be optional
To maintain clean energy coverage across the 24-hour cycle, data centers will need their own supply of dispatchable clean capacity, or else rely on markets that already have it.
A new procurement playbook emerges
The question now is what happens when carbon accounting catches up to physics? Hourly matching will influence not only reporting rules but also the practical decisions behind where and how the next wave of AI-driven infrastructure grows.
The GHGP Scope 2 updates are only the beginning. Energy markets are moving in the direction of better aligned renewable procurement, and data centers need to prepare: strengthen their negotiating position, and find opportunities in the shift.
Juan Pablo (JP) Cerda is the CEO and Co-Founder of Renewabl. His career spans energy trading and clean energy procurement roles at BP, Shell, ED&F Man Commodities, and Schneider Electric, as well as founding Zeigo. He now works with major corporates and data centers on more transparent Scope 2 accounting and hourly-matched PPAs. The opinions represented in this contributed article are solely those of the author, and do not reflect the views of Latitude Media or any of its staff.
