More and more consumers are committing to 100% renewable electricity. The companies of the RE100 Coalition are the best-known example. The RE-source Platform, which unites companies interested in renewable PPAs, is also growing fast, and much more is happening on the international, national and local levels.
To encourage more companies to commit and to speed up the transition towards a 100% renewable society, a stable, predictable regulatory framework is needed. For example, regarding renewable energy commitments, it is important for companies to know how they will be able to prove the use of renewable energy in 2020, 2025 or 2030. (This is true for both sellers and consumers of renewable energy.)
On the non-governmental level, an important step was taken with the approval of the Greenhouse Gas Protocol Scope 2 Guidance, establishing internationally accepted rules for the carbon accounting of electricity and for the allocation of environmental attributes of electricity. The standard requires companies to prove the origin of their electricity with reliable tracking systems such as Guarantees of Origin, RECs, and I-RECs. Soon after, organisations including CDP and the WBCSD started encouraging their members to make use of these rules worldwide, which has led to an avalanche of promising initiatives.
Things are also moving with states. In several parts of the world, states are setting up renewable energy tracking systems, or are considering doing so: Singapore, Turkey, China… We hope that these evolutions will strengthen the developments taking place on the corporate level.
In Europe too, the interest of decisionmakers is growing, and many seem to be interested in intervening in the European Guarantees of Origin system. The intention is of course to improve the system, but unfortunately, it seems that many of our decisionmakers still have a very limited understanding of how the system has functioned so far, and far too optimistic a view on how the system can interact with (28 different) national support schemes. The market is the result of voluntary and concrete action from consumers. Market players and non-profit initiatives have been trying to make it simple and less complicated for consumers to take action. New and unclear changes imposed by politicians will only make voluntary action more difficult.
The discussions on the future of the Guarantees of Origin are taking place as part of the discussions on the revision of the Renewable Energy Directive. The final decision will be taken soon. This is why we want to remind the decisionmakers once more that:
- Guarantees of Origin are a consumer protection and empowerment tool. They are intended to provide reliable and correct information about the origin of the electricity and are meant to avoid any double-counting of environmental attributes. Proposals to exclude specific types of production from the Guarantees of Origin system will not help consumers, but will only lead to more confusion.
- Changes should not work retroactively. The European Parliament has already expressed its desire to state in the new text that the new rules would only apply to installations commissioned after the entry into force of the new directive. It is important that this clause remains in the final text.
- Possible (but often very speculative) advantages of new rules have to be balanced by the obvious disadvantages of 2 to 3 years of unclarity. According to the latest proposals, the Member States would have quite a lot of freedom to develop national rules and exceptions, but until the Member States have decided on this, nothing will be sure. This will considerably slow down private action.
If the texts get approved as they are now on the table, the result may well be very different from what legislators are expecting. Nobody will commit to 100% renewable electricity if it is not clear how it will be possible to prove that in 2021. The proposals currently on the table also make it difficult to predict how many Guarantees of Origin will be available in 2022, and from which installations.
This blog is not the right place to open the discussion on concepts and details. Many workshops have been organised, and a large group of experts, including Eurelectric, Solar Power Europe and the AIB, have formulated a position in the “Common position on Guarantees of Origin“. These expectations were once more highlighted at the REC Market Meeting, an expert meeting with over 300 attendees (but unfortunately not a single politician).
We remain 100% available for people with questions and will answer in detail. Feel free to contact us at any time.
Written by By Steven Vanholme
Posted on 22 March 2018
