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Guarantee of origin of electricity from renewable energy sources
European Union Electricity Market Glossary

 

 

Guarantees of origin (GOs) have conceptually been envisioned as tracking instruments serving as evidence that electricity has been produced either from:

 

- renewable sources (Directive on promotion of renewable energy sources - RED I and RED II Directives) or

 

- high efficiency cogeneration (Cogeneration Directive 2004/8/EC and later Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency).

 

Under the Directive 2009/28/EC of the European Parliament and of the Council on promotion of renewable energy sources (RED I) renewable energy sources denoted renewable non-fossil energy sources such as wind, solar, geothermal, wave, tidal, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases, there is no change in this regard in the Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (RED II - integral part of the Package Clean Energy for the Europeans), save for small additions (“energy from renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas”).

 

Pursuant to Article 3(9) of the RED I all European Union Member States were required to establish and maintain a renewable energy guarantees of origin certification scheme.

 

The scheme provided an increased level of transparency to customers, allowing them to choose to purchase renewable or non-renewable electricity.

 

Renewable energy guarantees of origin appeared firstly in the Directive 2001/77/EC (the predecessor of the RED I), which introduced a duty on all Member States to develop a reliable scheme in that regard (in practice, the detailed architecture of each Member State’s scheme may differ).

 

The RED I clarified the purpose of guarantees of origin as evidence of the origin of electricity generated from renewable energy sources and specified the minimum information, which each guarantee should contain.

 

The RED I defined the guarantee of origin (Article 2(j)) as "an electronic document which has the sole function of providing proof to a final customer that a given share or quantity of energy was produced from renewable sources as required by Article 3(6) of Directive 2003/54/EC", this definition is also upheld by Article 2(12) of the RED II (the word: “proof” has only been replaced with the word: “evidence”).

 

The RED I underlined inherent differences between the so-called "green certificate" (used for support schemes) and the guarantee of origin (the purpose thereof is transparency and reliability of the information).

 

The RED I allowed for transfers of guarantees of origin between Member States:

"Member States shall recognise guarantees of origin issued by other Member States in accordance with this Directive exclusively as proof of the elements referred to in paragraph 1 and paragraph 6(a) to (f). A Member State may refuse to recognise a guarantee of origin only when it has well-founded doubts about its accuracy, reliability or veracity. The Member State shall notify the Commission of such a refusal and its justification".

 

However, if the European Commission finds that a refusal to recognise a guarantee of origin is unfounded, the Commission may adopt a decision requiring the Member State in question to recognise it. 

 

The above framework is in principle maintained by the RED II.

 

The RED II in Recital 53 explains that:

 

- guarantees of origin issued for the purpose of the said Directive have the sole function of showing to a final customer that a given share or quantity of energy was produced from renewable sources,


- a guarantee of origin can be transferred, independently of the energy to which it relates, from one holder to another,


- with a view to ensuring that a unit of renewable energy is disclosed to a customer only once, double counting and double disclosure of guarantees of origin should be avoided,


- energy from renewable sources in relation to which the accompanying guarantee of origin has been sold separately by the producer should not be disclosed or sold to the final customer as energy from renewable sources.

 

The new Directive underlines, as before, the need to distinguish between guarantees of origin and green certificates used for support schemes.

 

Member States may arrange for guarantees of origin to be issued for energy from non-renewable sources (Article 19(2) of the RED II).

 

Under the RED II guarantees of origin of energy from renewable sources are issued for the purposes of “demonstrating to final customers the share or quantity of energy from renewable sources in an energy supplier's energy mix and in the energy supplied to consumers under contracts marketed with reference to the consumption of energy from renewable sources”.

 

For these purposes guarantees of origin are valid for 12 months after the production of the relevant energy unit. All guarantees of origin that have not been cancelled expire at the latest 18 months after the production of the energy unit.

 

Guarantees of origin are issued, transferred and cancelled electronically.

 

A guarantee of origin must specify at least:
(a) the energy source from which the energy was produced and the start and end dates of production;
(b) whether it relates to:
(i) electricity;
(ii) gas, including hydrogen; or
(iii) heating or cooling;
(c) the identity, location, type and capacity of the installation where the energy was produced;
(d) whether the installation has benefited from investment support and whether the unit of energy has benefited in any other way from a national support scheme, and the type of support scheme;
(e) the date on which the installation became operational; and
(f) the date and country of issue and a unique identification number.

 

Simplified information may be specified on guarantees of origin from installations of less than 50 kW.

 

 

 

 

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (RED II), Recitals 53 - 59

 

Article 2(12)

 

‘guarantee of origin’ means an electronic document which has the sole function of providing evidence to a final customer that a given share or quantity of energy was produced from renewable sources;

 

Recitals 53 - 59

 

(53) Guarantees of origin issued for the purpose of this Directive have the sole function of showing to a final customer that a given share or quantity of energy was produced from renewable sources. A guarantee of origin can be transferred, independently of the energy to which it relates, from one holder to another. However, with a view to ensuring that a unit of renewable energy is disclosed to a customer only once, double counting and double disclosure of guarantees of origin should be avoided. Energy from renewable sources in relation to which the accompanying guarantee of origin has been sold separately by the producer should not be disclosed or sold to the final customer as energy from renewable sources. It is important to distinguish between green certificates used for support schemes and guarantees of origin.

 

(54) It is appropriate to allow the consumer market for electricity from renewable energy sources to contribute to the development of energy from renewable sources. Member States should therefore require electricity suppliers who disclose their energy mix to final customers in accordance with Article X of Directive [Market Design], or who market energy to consumers with a reference to the consumption of energy from renewable sources, to use guarantees of origin from installations producing energy from renewable sources.


(55) It is important to provide information on how the supported electricity is allocated to final customers . In order to improve the quality of that information to consumers, Member States should ensure that guarantees of origin are issued for all units of renewable energy produced, except for when they decide not to issue guarantees of origin to producers who also receive financial support. If Member States decide to issue guarantees of origin in such a case, or they decide not to issue them directly to producers, they shall be able to choose by which means and mechanisms to take into account their market value. When renewable energy producers also receive financial support, the market value of the guarantees of origin for the same production shall be appropriately taken into account in the relevant support scheme.


(56) Directive 2012/27/EU provides for guarantees of origin for proving the origin of electricity produced from high-efficiency cogeneration plants. However, no use is specified for such guarantees of origin , so their use may also be enabled when disclosing the use of energy from high efficiency CHP.

 

(57) Guarantees of origin, which are currently in place for renewable electricity, should be extended to cover renewable gas. Extending the guarantees of origin system to non-renewable energy sources should be an option for Member States. This would provide a consistent means of proving to final customers the origin of renewable gases such as biomethane and would facilitate greater cross-border trade in such gases. It would also enable the creation of guarantees of origin for other renewable gases such as hydrogen.


(58) There is a need to support the integration of energy from renewable sources into the transmission and distribution grid and the use of energy storage systems for integrated variable production of energy from renewable sources, in particular as regards the rules regulating dispatch and access to the grid. Directive [Electricity Market Design] lays down the framework for the integration of electricity from renewable energy sources. However, this framework does not include provisions on the integration of gas from renewable energy sources into the gas grid. It is therefore necessary to keep them in this Directive.

 

(59) Guarantees of origin which are currently in place for renewable electricity should be extended to cover renewable gas. Extending the guarantees of origin system to energy from non-renewable sources should be an option for Member States. This would provide a consistent means of proving to final customers the origin of renewable gas such as biomethane and would facilitate greater cross-border trade in such gas. It would also enable the creation of guarantees of origin for other renewable gas such as hydrogen.

 

Article 19
Guarantees of origin for energy from renewable sources

 

1.For the purposes of demonstrating to final customers the share or quantity of energy from renewable sources in an energy supplier's energy mix and in the energy supplied to consumers under contracts marketed with reference to the consumption of energy from renewable sources, Member States shall ensure that the origin of energy from renewable sources can be guaranteed as such within the meaning of this Directive, in accordance with objective, transparent and non-discriminatory criteria.

 

2.To that end, Member States shall ensure that a guarantee of origin is issued in response to a request from a producer of energy from renewable sources, unless Member States decide, for the purposes of accounting for the market value of the guarantee of origin, not to issue such a guarantee of origin to a producer that receives financial support from a support scheme. Member States may arrange for guarantees of origin to be issued for energy from non- renewable sources. Issuance of guarantees of origin may be made subject to a minimum capacity limit. A guarantee of origin shall be of the standard size of 1 MWh. No more than one guarantee of origin shall be issued in respect of each unit of energy produced.

 

Member States shall ensure that the same unit of energy from renewable sources is taken into account only once.

 

Member States shall ensure that when a producer receives financial support from a support scheme, the market value of the guarantee of origin for the same production is taken into account appropriately in the relevant support scheme.

 

It shall be presumed that the market value of the guarantee of origin has been taken into account appropriately in any of the following cases:

(a) where the financial support is granted by way of a tendering procedure or a tradable green certificate system;

(b) where the market value of the guarantees of origin is administratively taken into account in the level of financial support; or

(c) where the guarantees of origin are not issued directly to the producer but to a supplier or consumer who buys the energy from renewable sources either in a competitive setting or in a long-term renewables power purchase agreement.

 

In order to take into account the market value of the guarantee of origin, Member States may, inter alia, decide to issue a guarantee of origin to the producer and immediately cancel it.

 

The guarantee of origin shall have no function in terms of a Member State's compliance with Article 3. Transfers of guarantees of origin, separately or together with the physical transfer of energy, shall have no effect on the decision of Member States to use statistical transfers, joint projects or joint support schemes for compliance with Article 3 or on the calculation of the gross final consumption of energy from renewable sources in accordance with Article 7.

 

3.For the purposes of paragraph 1, guarantees of origin shall be valid for 12 months after the production of the relevant energy unit. Member States shall ensure that all guarantees of origin that have not been cancelled expire at the latest 18 months after the production of the energy unit. Member States shall include expired guarantees of origin in the calculation of their residual energy mix.

 

4.For the purposes of disclosure referred to in paragraphs 8 and 13, Member States shall ensure that energy companies cancel guarantees of origin at the latest six months after the end of the validity of the guarantee of origin.

 

5.Member States or designated competent bodies shall supervise the issuance, transfer and cancellation of guarantees of origin. The designated competent bodies shall not have overlapping geographical responsibilities, and shall be independent of production, trade and supply activities.

 

6.Member States or the designated competent bodies shall put in place appropriate mechanisms to ensure that guarantees of origin are issued, transferred and cancelled electronically and are accurate, reliable and fraud-resistant. Member States and designated competent bodies shall ensure that the requirements they impose comply with the standard CEN - EN 16325.

 

7.A guarantee of origin shall specify at least:

(a) the energy source from which the energy was produced and the start and end dates of production;

(b) whether it relates to:

(i) electricity;

(ii) gas, including hydrogen; or

(iii) heating or cooling;

(c) the identity, location, type and capacity of the installation where the energy was produced;

(d) whether the installation has benefited from investment support and whether the unit of energy has benefited in any other way from a national support scheme, and the type of support scheme;

(e) the date on which the installation became operational; and

(f) the date and country of issue and a unique identification number.

 

Simplified information may be specified on guarantees of origin from installations of less than 50 kW.

 

 

 

 

 

 

chronicle

Guarantee of origin of electricity from renewable energy sources - regulatory chronicle

 

 

 

 

22 March 2019

 

Regulatory Challenges for a Sustainable Gas Sector, CEER Public Consultation Paper, Ref: C18-RGS-03-03, 22 March 2019

 

 

 

 

IMG 0744

    Documentation    

 

 

 

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (RED II), Article 2(12), Article 19, Recitals 53 - 59

 

Directive 2009/28/EC of the European Parliament and of the Council on promotion of renewable energy sources (RED I), Article 2(j)

  

RED II: Auctioning GOs for supported energy brings wider system benefits and ensures alignment with EU State Aid rules 

 

 

 

 

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Last Updated on Sunday, 06 October 2019 16:46
 

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