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Project kicks off for Eastern European Guarantees of Origin system

Wednesday, 02 February 2022

Author: Selma P. Utonih

On 26 January 2022, the Energy Community Secretariat announced the launching of a project to create an electronic system for Guarantees of Origin in Albania, Bosnia and Herzegovina, Georgia, Kosovo, North Macedonia, Moldova, Montenegro, and Ukraine to enable customers to credibly buy electricity from renewable sources.

The Energy Community Secretariat was established in 2006 with the key objective of extending the EU's internal energy market rules and principles to countries in Southeastern Europe, the Black Sea region, and beyond to create an integrated pan-European energy market. 

The main aim behind the project by the Energy Community is to extend the European GO rules and principles to 8 new countries with an electronic system, allowing for managing the issuance, transfer, and cancellation of Guarantees of Origin. According to the press release, "the system will enable each Contracting Party to have its own national register while being able to trade GOs regionally."

Last year in December 2021, the Energy Community Secretariat signed a contract appointing Grexel (part of EEX group) to establish this GoO system. The solution designed by Grexel will enable each country to have its own national registry while allowing them to transfer GOs regionally and potentially Europe-wide with the possibility of international transfers in the future. 

The Energy Community Secretariat’s Director, Artur Lorkowski, adds: “Guarantees of Origin can be a real game-changer by driving new renewables investment. On top of that, it will give the Contracting Parties a head start in implementing the Renewable Energy Directive, one of the key elements of the newly adopted Clean Energy Package”.

The implementation of the GO registries in the 8 countries will comply with the EU standards as well as with both the Directive on the promotion of the use of renewable energy from Renewable Energy Sources (RES) and the Directive on Renewable Energy (RED II). 

Markus Klimscheffskij, Grexel CEO, comments “Over the course of our 20-year history, Grexel has helped numerous countries to set up energy certification and reliable disclosure. We’re proud to see our handprint all over Europe in enabling consumer-driven energy transition towards clean solutions. With our unique skillset we are not only providing the core technology, but will surely help the Energy Community countries in their path towards reliable electricity certification and disclosure as well as joining the common European market for Guarantees of Origin.”

Should everything run smoothly the project is expected to launch mid this year in June 2022. All 8 countries will have to apply for membership to the Association of Issuing Bodies (AIB) that develops and runs the European Energy Certificate System (EECS).

Potential impact on EU Guarantees of Origin market

Of the 8 countries mentioned, Montenegro is listed as a member, Bosnia is listed as an observer to the AIB market while the rest are listed as countries to observe on the AIBs website. 

Serbia which is categorized as a net importer of electricity has already established a GO system and has been connected to the AIB Hub since 11 November 2020. Since then, Serbia has increased EECS GO activity. An overview of country statistics are shown below:

Most of the issuances and cancellations in Serbia are associated with Hydro generation. Supply and demand for GoOs from Serbia have increased by 331% and 260% respectively when compared to 2020 with GO demand having exceeded supply in both years.

Electricity mixes per country

Figure 3: Slide show showcasing electricity generation statistics for the 8 Southeastern European countries.

Bosnia and Ukraine have historically been net-exporters of electricity and in 2020 generated 4.8 TWh and 11 TWh of renewable electricity while the remaining 6 countries have been categorized as net-importers and combined generated around 18 TWh of renewable electricity. Should all 8 countries successfully register then new supplies of Guarantees of Origin can be expected within the AIB market. At the moment it is hard to forecast the potential GO supply from these countries as it is dependent on whether they will have restrictions on GO issuances from subsidized plants. 

For example, while Serbia in 2020 produced 10 TWh of renewable energy the country had GO issuances of only 0.2 TWh due to the country having GO issuance restrictions on production devices supported by FiT schemes.

Considering that most of the countries mentioned are net electricity importers an increase in GoO cancellations can be expected which could potentially put slight upward pressure on EU GO prices.

Source:

EEX