Guarantees of Origin, Renewable Energy Certificates and the Residual Mix in LCA
Guarantees of Origin and Renewable Energy Certificates
A Guarantee of Origin (GO) is an numbered electronic green label in the EU, that guarantees that one MWh of electricity has been produced from a renewable energy source. GOs are traded independently from the electricity trade. When an end-user buys a GO for electricity consumption from the grid, it is cancelled at the issuing body’s registry in the country of consumption. Most of the issuing bodies of EU member states are member of the Association of Issuing Bodies (AIB), where they jointly agreed upon the EECS (European Energy Certificate System) rules to make sure GO’s are issued and traded in the same way. This system makes it possible to track ownership, and ensures that there is no double counting. A GO is issued in a month that follows the production month of the electricity (not always in the month direct after production), and is valid for a period of 12 month to enable trading.
In the USA, a similar system exists: the Renewable Energy Certificates (RECs) . This system is smaller, but seems to be a bit more elaborated than the European system, since there are two types of RECS: bundled and unbundled. Buying a bundled REC – i.e. electricity + REC – from a (yet-to-be-built) project allows your company to make the “additionality” claim, meaning that your company’s investment directly added new renewable energy to the grid to displace fossil power. Such a transaction is called a PPA (Power Purchasing Agreement). In Europe, these PPAs become also popular for (offshore) wind power and solar energy. Companies are Google, Microsoft, Air Liquide, DSM, Borealis, Philips, Akzo Nobel, Yara. The electricity and the GOs are going via different trading platforms, and are bundled in the PPA.
In fact, the ISO 22095 , about “chain of custody”, describes “book and claim” as a system with bundled certificates (the first paragraph Annex B.4.1).