Fuel Mix Disclosure
European Internal Markets Electricity (IEM) Directive 2009/72/EC of the European Parliament and of the Council (and its predecessors 1996/92/EC and 2003/54/EC) liberalises the electricity market across the member states of the EU, creating a framework for a common market for electricity.
The IEM Directive requires Member States to introduce "electricity source disclosure" schemes for electricity sold to final consumers. Such schemes identify the contribution of each energy source to the overall fuel mix of the supplier, and inform consumers of the environmental impact. This requires a means of allocating electricity generation "attributes", such as fuel type, CO2 emissions etc, to electricity suppliers and their customers.
Also, the policy instruments used by Member States to support electricity from renewable energy sources and high efficiency cogeneration (e.g. feed-in tariffs, quota obligations, tax exemptions etc.) may require similar allocation of electricity attributes.
The implementation of such "tracking" systems for electricity can also facilitate the promotion of renewable energy sources and high-efficiency cogeneration in the internal market for electricity; and harmonising these across Europe is vital to the development of the internal market.
As it is not feasible (or desirable, for good economic and operational reasons) to physically connect consumers to producers of the type of energy they want, suppliers must track the electricity from producer to consumer independent of the physical flow of electricity. They can do this:
- By referring to the production mix of energy of their country. However, this ignores international trade, so the resulting statistics are wrong. Also, it prevents suppliers from developing a differentiated mix or products based on the origin of supplied electricity (from renewable energy sources, for example)
- By tracking the energy contracts. This is not easy, and takes a lot of effort, as electricity may be bought and sold several times before it is supplied. Also, equal amounts of energy from different types of technology may be swapped, resulting in different flows of energy and the 'environmental benefit'), or
- By certification. This provides a simple and effective way of administering disclosure: once a certificate has been issued for 1MWh produced, all the supplier has to do is to count the certificates it has been awarded or has acquired, for each source.
Directive 2009/28/EC (and its predecessor 2001/77/EC) and 2012/27/EC create a framework for the promotion of electricity from renewable energy sources (RES electricity), and highly-efficient cogeneration based on useful heat demand. These Directives contain regulations on Guarantees of Origin which serve to enable producers to demonstrate that the electricity they sell is produced from renewable energy sources or highly-efficient cogeneration.
Such Guarantees of Origin provide an efficient and simple means of facilitating disclosure.
Where the requisite national legislation is absent, then EECS Disclosure certificates may be implemented. In addition, Independent Criteria Schemes (ICSs) have developed which impose additional conditions upon supplied energy, making use of the standard information held on Guarantees of Origin, supplemented by an indication that this energy qualifies under an ICS scheme, perhaps due to plant specifics; or because the ICS scheme is operated so as to encourage the building of new plant. Examples of ICS schemes include EkoENERGY, TUV SUD Generation EE and Naturemade.