Basic concepts
  1. Source Energy: this is energy which is converted into another form of energy for consumers to use - for instance, electricity can be produced from natural gas by using it as a propellant to drive a gas turbine, or by burning it to make heat which is used to make steam to drive turbines.
  2. Produced 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 a one megawatt-hour of produced energy (e.g. 1MWh). Guarantees of Origin (GOs) are certificates
  4. Scheme:a system for the transfer of certificates.
  5. Disclosure:electricity disclosure is a requirement implemented in the Internal Electricity Markets Directive (2009/72/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.

Disclosure informs consumers of the source of their energy, so they can make an informed choice based on matters other than electricity prices.

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.

Member states have implemented national legislation on disclosure in different ways, sometimes allowing suppliers to offer different energy mixes.

Green power quality labeling is based on quality criteria, for which a significant part of the electricity market will be ineligible.