GUARANTEES OF ORIGIN

The European Renewable Source Electricity Directive (2001-77-EC), requires Member States to implement by October 2003 systems to guarantee the origin of renewable energy.  The AIB certificate system can facilitate this, since these certificates are first and foremost guarantees of origin.

The Renewables Directive aims to promote a substantial increase in the proportion of electricity generated from renewable energy sources across the European Union by 2010. Individual Member States have all been required to take appropriate steps to encourage greater consumption of electricity from renewables, in order that the overall EU target of 12% energy (22.1% of electricity) by 2010 can be met. Each State has its own indicative target, depending on issues such as historical experience with renewables.

For the purposes of the Directive, renewable energy sources are defined as "renewable non-fossil energy sources (wind, solar, geothermal, wave, tidal, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases)".

The Directive requires Member States to give generators the opportunity to obtain guarantees of origin (GO) for electricity generated from these particular sources. GO are implemented in electronic form in most European member states (they are available in printed form in others) and act as proof that the electricity concerned was generated from renewable sources (as defined in the Directive). Since it also specifies the source of the electricity, the dates when it was produced, and perhaps the quantity of the electricity, a GO will serve as a guarantee that the specified quantity of electricity was generated from renewable sources.

GOs of themselves have no monetary value. Equally, possession of a GO will not, of itself, entitle the holder to a tradable certificate.  It should also be noted that eligibility may be restricted to electricity generated within that member state.

These Regulations are restricted to implementing Article 5 under the powers of the European Communities Act (1972).

Article 5 of the Directive requires that Member States ensure that a GO is issued on request in respect of electricity generated from eligible renewable energy sources, as defined by the Directive. The system is purely voluntary, and individual generators are left to decide if they wish to make such a request.

The main provisions of Article 5 require that guarantees of origin:

• Specify the energy source(s) from which the electricity was generated, the dates and place of production, and in the case of hydro-electricity, the capacity of the plant;
• Serve to enable producers of electricity from renewables to demonstrate that the electricity they sell is produced from renewable sources as defined by the Directive;
• Should be mutually recognised by Member States, and any refusal to recognise should be based on objective, transparent and nondiscriminatory criteria (eg fraud).

Member States are required to put in place mechanisms to ensure that GOs are accurate and reliable, and to report to the Commission on the reliability of the system which has been put in place.

Breakdown of Article 5

Article 5.1

This requires that Member States issue a GO in response to a request made by an operator of a generating station producing electricity from an eligible renewable source. GOs will be issued according to objective, transparent and non-discriminatory criteria.

In general terms, GO can only be issued to generators of eligible renewables-derived electricity. There is no obligation on any electricity producer to request a GO.  To that extent, the procedure is entirely voluntary.  The wording of the second sub-paragraph of Article 5.3 implies that GO should be issued to producers of renewable electricity since their purpose is to enable such producers to demonstrate that the electricity they sell has been produced from renewable energy sources.

Each Member State is responsible for issuing of GO to generators within its own jurisdiction.

This enables Member States to designate competent bodies, which are independent of generation and distribution companies, to supervise the issue of GO.

This specifies the information which a guarantee of origin (REGO) should contain:

• the energy source (or sources) from which the electricity was produced;
• the dates and place of production (eg name of generating station);
• in the case of electricity generated from hydroelectricity, the GO should also indicate the capacity (ie declared net capacity) of the generating station.

Article 5.3 also explains the purpose of the GO, which is to enable producers of energy from renewable sources to demonstrate that the energy they sell is produced from renewable sources, as defined by the Directive.

Article 5.4

This requires that GOs shall be mutually recognised by the Member States, meaning that GO from each Member State will be recognised throughout the EU.  Similarly, GO from other Member States must be recognised in each Member State. 

Any refusal to recognise a GO from another Member State must be based on objective, transparent and nondiscriminatory criteria (such as fraud).  In the event of a Member State refusing to recognise a GO, the Commission may compel the Member State to do so.  In this context, "recognising" a GO means accepting that the information provided for the purposes of Article 5.3 is correct. In other words, by recognising a GO, the Member State concerned accepts that the electricity for which the GO was issued was generated from renewable sources as defined by the Directive.  Recognising a GO does not necessarily mean that the electricity concerned meets the criteria required for any national support scheme.

This requires that Member States or the competent bodies appointed by them put in place mechanisms to ensure that GO are accurate and reliable (ie that the electricity concerned is produced from eligible renewable sources and any information provided is accurate). Member States will also have to report to the Commission by 27 October 2003 on the measures taken to ensure the reliability of the system.

This provision is for the Commission and enables them to consider the forms and methods used by the Member States to guarantee the origin of renewable energy. If necessary, the Commission may propose common rules, but these would need to be agreed by the Council of Ministers and the European Parliament.specify the quantity of electricity generated.