The following article looks at Guarantee of Origin — the current European certification mechanism for renewable energy -, analysing its current strengths and limitations. Why is time so important when dealing with electricity? Can blockchain technology be an enabler to create better support tools to track and certify an ever-growing volume of (distributed) Renewable Energy?
Consumers’ demand for renewable energy sourcing is constantly rising. In 2018, the United States had more than 6GW of renewable energy contracted by corporations, and large technology and consumer goods companies lead the way. That’s a five times volume increase compared to 2014. These market trends are generating new debates on what it actually means to purchase green energy, the mechanisms to certify it, and what the future of green business certification will become.
Currently within Europe, in order to document and report on sold and consumed energy from renewable energy sources (RES), companies (and individuals) must rely on Guarantees of Origin (GO). Guarantees of Origin is the official tracking certificate regulated in the European Directive 2009/28/EC, article 15 and provisioned in article 19 of the Clean Energy Package (CEP), which, if it enters into force, it will make GO the only acceptable certification in which energy suppliers can prove that they supply electricity from RES.
Therefore, the question is: Are GOs the best and most efficient solutions for Europe to track and certify an ever-growing volume of (distributed) renewable energy? To answer this question, there are three critical areas to consider: user experience, proof-of-additionality, and market operations.
User Experience
GOs were designed as an additional incentive scheme for renewable energy, but also as a transparency mechanism for consumers. The CEP recognizes that GOs can be a valuable instrument for Europe’s electricity consumers. Corporate consumers can use them to report and prove their increasing commitments towards sustainability targets, while individuals should have the ability to check any time they want.
However, is this really the case? How many consumers know what it means to buy green energy? And the ones who know, how can they check?
Here is an example. Maria is a consumer and a residence of Spain. After researching (a.k.a. Googling “Garantias de Origen España”), Maria would probably find this webpage from the Spanish Issuing Body (IB), CNMC. Once there, Maria would have to know to click on “Trámites según tipo — Redenciones por CUPS” (Claims for consumption points), input her CUP (that she would have to find on her bill), and the result would be the excel (or PDF) documentation in the picture below.
Maria might wonder: What does it mean? Was this my entire consumption? For what period? How do I know that this proves I bought green energy? Where was the energy produced?
And what if Maria is a sustainability manager of a consumer goods company? She has a textual document that confirms a few times a year that a certain amount of renewable energy is generated somewhere. How can she use this information to prove to end-consumers, investors, and other stakeholders that her corporation’s energy consumption is truly carbon-free every day and in every facility?
Find out Maria’s solution here
