First, there are a few concepts that it is important to understand:

1. Source Energy: this is energy which is converted into another form of energy, for use by consumers. For instance, natural gas can be used to generate electrical energy. It does so by using it as a propellant to drive a gas turbine, or by using the heat from combustion to make steam to drive turbines.

2. Generated energy: this is the energy which is supplied to consumers, and to which source energy has been converted.

3. Certificate: A generic term for the evidence of the source of an instance of energy generation (e.g. 1MWh), such as Guarantees of Origin (GoO) - see PRO Section B, "Definitions and Interpretation".

4. Scheme:an international system for the transfer of certificates.

5. Disclosure: electricity disclosure is a requirement implemented in the revised Electricity Market Directive (2003/54/EC). Electricity suppliers must disclose to their customers:


1. the contribution of different energy sources to their supply portfolio in the preceding year; and
2. related environmental impact indicators, which must include the CO2 emissions and nuclear waste that have been produced.

The objective of disclosure is to provide consumers with relevant information about power generation; so enabling consumers to make informed choices which are not solely based on electricity prices. In a liberalised market, disclosure requires the required attributes to be tracked from the generator to the supplier.

Member states have implemented national legislation on disclosure in different ways, sometimes allowing disclosure of differentiated product information (e.g. a green power product and a standard product).

Green power quality labeling is based on subjective quality criteria, which usually excludes a significant part of the electricity market from labeling. However, disclosure offers an objective information scheme for the entire electricity market, so providing consumers with information on which to base their buying decisions.

In order to accurately disclose their electricity mix, suppliers may account for the share of green electricity they sell by using Guarantees of Origin and/or other reliable tracking systems (such as statistics produced by feed-in support systems and ex-post contract-based tracking systems). They account for the rest of the electricity by the “residual mix”: a default set of statistic values for their country. The residual mix adjusts the production mix to reflect electricity that has already been tracked by Guarantees of Origin and/or other reliable tracking systems.