CEER Consultation on Green Electricity

This would enable customers to make a well-considered choice concerning their electricity, based on reliable and consistent information they can trust. Such a disclosure system enhances competition in the energy market by providing more reliable choice which is why electricity disclosure and its main instrument – the Guarantee of Origin (GO) – is essential to creating a voluntary, consumer-driven market for renewables.

The draft recommendations aim to empower electricity customers by providing them with adequate, reliable and consistent information and by developing a reliable, trustworthy and transparent disclosure system and pushing forward the integration of the European electricity market.

This advice is considered timely given the current developments in the renewable sector and the growing interest of customers in electricity generated from renewable sources.

Stakeholders are invited to participate in the public consultation via the dedicated online questionnaire in this section of the CEER website.

CEER invites all interested stakeholders to provide comments on all aspects of the public consultation document and in particular on the specific questions set out in the consultation document and in the dedicated online questionnaire.

Any responses should be submitted by Friday, 7 February 2014 through the dedicated online questionnaire.

Following the consultation, CEER will publish all non-confidential responses received. Respondents requesting confidentiality should submit those confidential aspects of their response by marking them as "confidential" in the dedicated online questionnaire.

Any questions on the consultation document and the online consultation should in the first instance be directed to:

Ms Natalie McCoy
CEER Secretary General
Tel. + 32 (0) 2788 73 30
Email: natalie.mccoy@ceer.eu

See also the CEER website.

AIB'S GENERAL COMMENTS

In general, it is the opinion of the AIB that the RE-DISS II project goes a long way to addressing the subject matter: see http://www.reliable-disclosure.org/ for further information. 

Page 10 refers to GOs accounting for 33% of all electricity from renewable sources. However, this is misleading: in many cases, a producer of RES-E must choose between receiving support and requesting a GO and, as the value of support is normally greater than the market value of a GO, this often leads to the producers of a large proportion of RES-E asking for support rather than a GO. Page 10 should therefore explain that while the Directive requires member states to offer GOs for all RES-E, it permits them to withhold support if a producer of RES-E has received a GO for that unit of electricity; and that this means that GOs are only issued for 33% of all RES-E, the source of the remaining 67% either being tracked by means of electricity supply contracts, or contributing to the national residual mix. Ideally, the consultation should also state the proportion of unsupported RES-E for which GOs are issued. 

Page 10 also says that tracking and disclosure are difficult issues for a customer to understand (see also paragraph 5 of page 14). While this is quite correct, the RES Directive (art.15 para. 1) makes it quite clear that GOs are intended to be used by energy suppliers; and thus GOs are intended for the wholesale market rather than consumers. Suppliers do not explain how power systems work either, or settlements, scheduling, dispatch … etc., and yet customers do not expect to understand these. Customers simply want a cast-iron guarantee that they are getting what they pay for, and the certainty that such guarantees are enforced and audited. 

Page 17 quotes recital 52 of the RES Directive, which notes that “ It is important to distinguish between green certificates used for support schemes and guarantees of origin”. The reason for making such a distinction is left unclear to the reader, as is the way in which such distinction should be made: this recital can be interpreted to suggest that member states are solely being urged to label GOs and green certificates as such; and it might have been better expressed as “ For these reasons, guarantees of origin can be seen to have a different purpose from green certificates used for support schemes; and each should be used for that purpose alone.”. 

The last paragraph of page 17 also states that a clear definition of “ renewable” exists in the RES Directive, when in fact the definition in the Directive identifies the categories of renewable non-fossil sources that are acceptable; and omits potential new energy sources. 

Pages 19 and 20 omit to recognise that the CEN / CENELEC standard for GOs was approved in late November 2012 , and the standard was published 20 February 2013. 

Page 19 also erroneously states that EPED was supported by the EU Commission. This was not the case, so it should be moved to 3.2 (although to be honest EPED did very little, and this paragraph could well be simply deleted). 

Page 19 also states, under “ RECS International”, that RECS works closely with the AIB. “ Cooperates” would be more accurate than “ works closely”.

AIB's SPECIFIC COMMENTS

1) Do you agree that further improvement is needed concerning the terminology that is used to inform the customer of electricity offers based on renewables and to promote these offers in marketing?

Response: Yes
Comments: Categories like technology and fuel should be clear cut and easy to understand for consumers and market parties alike, and the terminology should be harmonised across Europe. Both EECS and the CEN/CENELEC standard for GOs propose such standardisation.

2) Do you agree that all price comparison tools should provide customers with an overview of electricity products, including specific information on the origin of the electricity that will be supplied?

Response Yes
Comments: In several countries, price comparison tools now play an important role in channelling consumer demand: they are being used by consumers to choose between products, and this is one of the few moments at which consumers can and do exercise “customer choice”. Therefore, it makes sense to introduce to these price comparison tools, trustworthy and transparent information about the origin of electricity supplied in association with each product.

3) Do you agree that the national regulatory authority (NRA, or other competent body) should develop a harmonised format on how information concerning the origin of electricity is displayed and should specify the level of detail required on electricity
bills for this information?

Response: Yes
Comments: There is a need for harmonisation between suppliers’ statements, and between European Member States (by NRAs), such as that proposed by the RE-DISS project (see www.reliable-disclosure.org). Within a Single European Energy Market, it no longer makes sense for the source of energy to be disclosed to consumers according to unharmonised and fragmented national practices.

4) Do you agree that two levels of information should be provided to customers? Complementing the bill, additional information such as the geographic origin, the technology and the product mix could be made available on the supplier’s website. In that case, a reference on the bill should draw customers' attention to this additional information.

Response: Yes
Comments: It is important for customers to have simple access to this information in a trustworthy, easy to understand, coherent and comparable way. However, suppliers should be allowed to decide whether they provide this information via their websites, or on printed leaflets.

As an aside, the consultation states on page 26 (immediately before it asks Question 4) that “A direct use of GOs by end users is not recommended and would even contradict EU Directives.” It is worth noting that some large users (including industrials, railways and the like) participate in electricity markets, and these – at least – may benefit from being able to participate directly in GO markets. The Directive makes clear that GOs are (art.2) for “proving to final customers the share or quantity of energy from renewable sources in an energy supplier’s energy mix”; and that “Where an electricity supplier is required to provide the share or quantity of energy from renewable sources in its energy mix …. it may do so by using guarantees of origin”. However, neither of these provisions of the Directive actually prohibits participation of consumers in GO markets; it simply does not direct that GOs be used in this way. The Directive simply provides that GOs must be issued to producers on demand, and that they are intended for use by suppliers – not that they may not be used by anyone else.

5) Do you support the idea that if a supplier also publishes the product mix on the bill for some customers, the publication of the product mix should be done consistently for all of its customers in order to minimise the risk of “double counting” within one company?

Response: Yes
Comments: For energy source disclosure to work correctly, it is essential that the product mix of all products is published by suppliers.

6) Do you agree that the publication of an annual disclosure report by NRAs (or other competent bodies) is a good practice?

Response: Yes
Comments: See the proposals of RE-DISS project (see www.reliable-disclosure.org).

7) Do you agree that further harmonisation of the existing disclosure systems at European level is necessary?

Response: Yes
Comments: It would be most beneficial for member states and their competent bodies to be required to use GOs for disclosure purposes, rather than other forms of evidence (see the proposals of RE-DISS project at www.reliable-disclosure.org).
On matters of detail, page 29 (para.1) should note that RECS Certificates will no longer exist from 1st January 2016; while para. 2 might observe that contract-based tracking can also be prone to error. Also, AIB is currently considering making access to its inter-registry Hub conditional upon the presence of a national legislative disclosure scheme which prevents double-counting.

8) Do you agree that GOs should be used as a common and reliable basis for all disclosure systems?

Response: Yes
Comments: We strongly support the use of GOs as the common and reliable basis for all disclosure systems. However, the consultation paper raises two issues which we feel would benefit from further consideration:
We would suggest that as pumping energy may originate from onsite renewable electricity production facilities, this – nett of energy consumed by pumping inefficiencies – should receive GOs; and

The IEM Directive refers to “the preceding year”, and not to “the preceding calendar year”, which goes beyond the requirements of the Directive. This approach was assumed by the RE-DISS project, for reasons that are not clear and which are currently under re-evaluation. It would make more sense to use a “rolling year” (either a 12-month or quarterly cycle), rather than calendar years. Rolling years will flatten prices and demand, removing the oddities introduced by the transitional period to March 31, and leading to a more rational market.

9) Do you agree that the issuing of RES-GOs should be mandatory for all electricity produced with renewable sources?

Response: Yes
Comments: See the proposals of RE-DISS project (see www.reliable-disclosure.org).

10) Do you agree that issuing of GOs should be extended to all sources of electricity to make the basis for the disclosure system more consistent and reliable, but also to provide opportunities for market offers for electricity based upon specific non-renewable sources in a trustworthy manner? Should this be mandatory or voluntary?

Response: Yes
Mandatory

Comments: The expansion of GOs to all sources of electricity would facilitate the requirements in the Internal Electricity Markets Directive for disclosure of CO2 emissions and radioactive waste on consumer bills.

11) Do you agree that the integration of electricity markets at European level should ideally be accompanied by actively developing a European RES-GO market?

Response: Yes
Comments: Such market facilities are desirable, and are already coming into place. It is important that a transparent and properly-functioning marketplace for GOs be created, as only a European market - without barriers and with sufficient (price) transparency and liquidity - will be able to deliver the required socio-economic benefits in an efficient way.

12) Do you agree that when informing customers about their energy, RES-support schemes and disclosure should be seen as separate issues with their own instruments?

Response: Yes
Comments: The disparity between countries that issue GOs for supported electricity and those that do not is regrettable. This should be remedied by introducing a mandatory requirement to issue GOs for all electricity.

13) Do you feel that it is necessary to recognise all GOs for disclosure purposes, irrespective of whether GOs come from supported or not-supported electricity?

Response: Yes
Comments: See comments to question 12.

14) Do you agree that “green” power quality labels should mandatorily be using GOs as their unique tracking mechanism?

Response: Yes
Comments: Only GOs can provide customers of “green” power quality labels with guaranteed information concerning the source of supplied energy.

15) Do you feel that it would benefit customers if a labelling model would be implemented alongside the GO, so that label(s) can provide “additionality” for those customers that demand it?

Response: Yes
Comments: It is the view of the AIB that only GOs can provide customers of “green” power quality labels with guaranteed information concerning the source of supplied energy; and that labels should use GOs as their unique tracking instrument.

The AIB will support the requirements of the market in a trustworthy and harmonised way, regardless of whether this relates to labels or other additional information. However, it does not have any views on the relative merits of the demands made by specific customer groups; in the end, it is up to the consumer.

The AIB considers that it is the purpose of labels and products, rather than GOs themselves, to support additionality.