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Should all producers of renewable energy automatically receive GOs?

In this contribution, Jaap Jansen finds that the practice of automatically issuing guarantees of origin (GOs) to all producers of renewable energy undermines EU energy and climate objectives. 

Dictated by the EU Renewable Energy Directive 2009/28/EC, a guarantee of origin (GO) is an instrument issued on their request to producers of electricity from renewable sources. GOs are used by suppliers (companies) as evidence that a corresponding quantity of electricity they delivered (consumed) was generated from renewable energy sources (RES). A recent Joint Statement on Guarantees of Origin (GOs) from a group of nine stakeholder organisations[1] representing general and specifically renewable power suppliers, officially designated GO issuers, certificate traders, renewable project developers and multinational companies, contains four propositions:

  • Use of GOs for renewable electricity disclosure should be mandatory.
  • All electricity produced from renewable energy sources (RES) should automatically receive GOs.
  • Mandatory auctioning of GOs for supported production should be avoided.
  • Achieving targets for RES used in transport should not be confused with disclosing origins of the electricity mix to final customers.

Propositions 1, 3 and 4 will improve the GO system, but proposition 2 warrants closer consideration as the stakeholders group is tacitly demanding that all producers of renewable electricity should be entitled to receive GOs and to market them: “Prohibiting GOs to be issued to producers which receive financial support would cloud the current distinction between support and disclosure systems.” However, if the European GO system is to be properly compatible with EU energy and climate objectives, the following system features are essential across the EU:

  • A renewable electricity producer benefitting from a support scheme is not eligible to receive GOs ­– GOs certifying this kind of production must be cancelled immediately after issuance in order to disclose their pro rata consumption of this production to all electricity consumers in the member state concerned.
  • A renewable electricity producer not benefitting from a support scheme, using an installation that has a commissioning date not exceeding, say, 20 years in the past, is eligible to receive GOs – GOs certifying renewable electricity production from older installations must also be cancelled immediately upon issuance in order to disclose their pro rata consumption of this production to all electricity consumers in the member state concerned.

 

 

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Commentary_JJ_GuaranteesOfOrigin.pdf479.12 KB