Renewable Energy Guarantees of Origin

Inaugural Guarantees of Origin auction expected in June

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RES market operator DAPEEP is expected to stage an inaugural Guarantees of Origin auction in June, following anticipated approval of this competitive procedure’s terms in April by RAAEY, the Regulatory Authority for Waste, Energy and Water. A second round of public consultation was recently completed.

The intermediate period between RAAEY’s expected approval of the auction terms next month and the staging of the inaugural auction will be needed by participants as GO auctions will emerge as a completely new procedure for the Greek electricity market.

Following their launch, GO auctions are planned to be repeated every three months.

DAPEEP, the RES market operator, has yet to decide on the quantity of GOs to be offered to participants through the first auction. The operator will make a decision after discussing details with RAAEY.

Auctioning off green certificates issued in 2023 is believed to be one option under consideration. If implemented, green certificates issued so far in 2024 would be placed for auction from the second GO auction onwards.

GOs representing a total renewable energy capacity of 22.4 TWh were issued in 2023, of which 4.44 TWh can be auctioned off at the upcoming inaugural GO session, Maria Koulouvari, Administrator of Renewable Energy Sources and Guarantees of Origin at DAPEEP, told the recent Renpower Greece 2024 conference.

 

Guarantees of origin market set for growth trajectory, projected to reach €3.7bn by 2030

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Aurora Energy Research projects that the Guarantees of Origin (GO) market will soar to 3.7 billion €in 2030 alone.

• Report underscores significant growth in both demand for and supply of GOs, although the regulatory environment will be a key determinant of how the market evolves.

• Shifting to a system of hourly GOs could increase revenues for renewables assets from GOs by at least 33%.

OXFORD (AURORA ENERGY RESEARCH)—The Guarantees of Origin (GO) market is expected to grow substantially, with estimates projecting reaching a size of 3.7 billion € by 2030 and GO cancellations expected to increase by more than 80% since 2022, a comprehensive study by Aurora Energy Research, the world’s largest dedicated power market analytics provider, suggests. 

While these certificates are primarily sourced by electricity consumers as part of their strategic efforts or green targets, Aurora assesses that GOs will also play a pivotal role in facilitating the transition to green hydrogen. Demand is particularly strong from corporate off-takers in Germany, France, and Italy, which together comprised 50% of total GO cancellations in Europe in 2023.

On the supply side, Aurora identified a persistent undersupply of GOs in key markets including Germany, the I-SEM, Belgium and selected other markets, primarily attributed to local regulations that impose restrictions on subsidised renewable assets, preventing them from issuing and monetising GOs. At the same time, Aurora expects the share of GOs issued by hydropower assets—previously the largest provider of low-cost GOs to consumers across Europe—to drop from around 60% at present to 35% by 2030, as more renewables issuing GOs come online elsewhere in Europe. 

Ryan Alexander, Research Lead at Aurora Energy Research, emphasised:

“We expect GOs to only gain importance over the coming years, as they are the EU’s main instrument to track the origin of electricity, and demand for them is growing. At the same time, there are deep regulatory and commercial uncertainties in this market, which will make it challenging for renewables developers and off-takers alike to navigate over the coming years.”

The future of granular GOs

Granular hourly GOs are crucial for accurate electricity usage tracking and green hydrogen production. EU regulation requires hourly GOs by 2030 as one of three ways in which domestically produced hydrogen can be claimed as green, making their implementation a central component of the energy transition. Jannik Carl, Research Associate at Aurora Energy Research, commented:

“If markets were to shift to a system of hourly and local GOs, revenues for Renewable Energy Systems operators could increase. When modelling Spain in 2030, we found a potential increase of GO revenues across technologies of at least 33% compared to the current annual system.”

In 2030, the Spanish market hourly GO prices are estimated to be 2.5 times as volatile as Day Ahead market prices in the same period, highlighting the risk to off-takers of committing to match 100% of their load profile to green generation on an hourly basis without a proper procurement strategy in place.

The benefits of high hourly GO prices in Spain would accrue to all types of renewables assets but particularly to hydroelectric assets, Aurora assesses, as they can more closely match the average electricity demand profile. As neither wind nor solar assets can flexibly adjust their production patterns, this highlights the role storage technologies could play in a world demanding 24/7 certification of green power consumption to reduce volatility.

Rebecca McManus, Senior Research Associate at Aurora Energy Research, commented: 

“By opening up the GO market to batteries, regulators could create new revenue streams for battery asset owners, while driving costs down for consumers in the transition to 24/7 green power.”

 

Green-energy Guarantees of Origin auction delayed

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RES market operator DAPEEP’s inaugural auction offering Renewable Energy Guarantees of Origin, appears set to be delayed by at least two months as its set of rules have yet to be approved by RAAEY, the Regulatory Authority for Waste, Energy and Water. The inaugural auction had been planned for within the first fortnight of January.

RAAEY deemed that numerous revisions were made to the auction’s proposed regulations following comments submitted during public consultation and, as a result, has decided that an additional round of consultation is now needed so that interested parties may be informed and given an opportunity to comment on these changes, sources informed.

The authority is expected to officially decide on an additional round of consultation for the auction at a board meeting either today or next Thursday.

As a result of the changes, the inaugural auction is now not expected any sooner than late March. DAPEEP is believed to be ready to stage the auctions from a technical point of view.

The auction will offer Guarantees of Origin by RES plants operating from January 1, 2021 onwards.

The procedure will include linking the Greek register of Guarantees of Origin with corresponding European registers, establishing a connection with all markets on the continent.

Green-energy Guarantees of Origin auction in January

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RES market operator DAPEEP plans to stage an inaugural auction offering Renewable Energy Guarantees of Origin early in the new year, within the first two weeks of January, according to energypress sources.

The forthcoming auction will come following months of preparations by DAPEEP. The effort will be completed with a link of the Greek register of Guarantees of Origin with the corresponding European registers.

The Greek system’s link with the corresponding European system will establish a connection with all markets on the continent.

Two pending issues remain ahead of the inaugural auction. RAAEY, the Regulatory Authority for Waste, Energy and Water, needs to approve relevant regulations and the platform, almost ready, must be completed. Neither issue is expected to delay the operator’s plans.

Proceeds generated at Renewable Energy Guarantees of Origin auctions will be injected into the country’s RES special account as an additional source of revenue.

A relevant legislative revision was made in the summer of 2022 to facilitate the introduction of Renewable Energy Guarantees of Origin, designed to provide transparency to consumers on the proportion of electricity that suppliers source from renewable generation, required of all EU member states.

‘PPAs must be registered to secure guarantees of origin’

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Green-energy power purchase agreements (PPAs) will need to be registered with DAPEEP, the RES market operator, in order to secure renewable energy Guarantees of Origin, the operator’s president and CEO Giannis Giarentis has stressed in comments to energypress.

This essentially means that, otherwise, the green origin of electricity quantities supplied by producers to off-takers through bilateral contracts will remain uncertified.

PPAs not entered into the DAPEEP registry and, subsequently, not covered by Guarantees of Origin, will practically result in non-certification of energy derived from renewable energy sources. This would deprive such PPAs of cost-related advantages as they would be no different to bilateral contracts signed between off-takers and thermal plant owners.

The DAPEEP head official’s remarks come at a pivotal time for Greece’s nascent green PPAs market, taking its first steps with a first round of contracts capitalizing on a recently introduced exemption from a wholesale market cap for physical delivery contracts.

 

Operator’s green Guarantees of Origin auction rules nearing approval

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DAPEEP, the RES market operator, is working on a third round of revisions for regulations concerning Renewable Energy Guarantees of Origin auctions, which it aims to deliver to RAE, the Regulatory Authority for Energy, for approval by the end of this month, energypress sources have informed.

Renewable Energy Guarantees of Origin, providing transparency to consumers on the proportion of electricity that suppliers source from renewable generation, are required of all EU member states.

If RAE approves the plan within June, the country’s first auction offering Renewable Energy Guarantees of Origin can be expected to be staged by December as, according to existing law, a first auction must be staged within six months of the plan’s approval.

Two rounds of consultation, one involving RAE and market players, the other RAE and DAPEEP, have already been staged as part of the procedure shaping regulations for Renewable Energy Guarantees of Origin auctions.

A new information system to be prepared by DAPEEP for its Renewable Energy Guarantees of Origin will link the operator’s platform with the online system of AIB, the Association of Issuing Bodies. DAPEEP is one of 24 AIB members in Europe authorized to issue Renewable Energy Guarantees of Origin.

Renewable Energy Guarantees of Origin auctions promise to create new conditions in Greece for the establishment of green electricity tariffs for consumers wishing to support the decarbonization of the country’s energy mix.

PPA market could achieve supply-demand balance by 2030, study notes

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The country’s PPA market is greatly imbalanced as numerous investors behind a large number of RES projects are keen to establish power purchase agreements, promising priority status for their licenses as well as favorable borrowing terms, but, on the other hand, the number of interested customers, major industrial consumers, willing to purchase power through PPAs is limited, a study by Aurora Energy Research has shown.

This imbalance, in which supply of green-energy PPAs exceeds demand, is significantly reducing PPA prices to levels well below those reflecting the actual cost of such agreements, according to the Aurora study, whose findings were presented at the recent 4th Power & Gas Forum in Athens by Evaggelos Gazis, Aurora’s Head of South Eastern Europe.

The study found that the fundamental fair value of typical fixed-price PPA contracts in 2025 could range between 60 and 100 euros per MWh.

A fair value for a 7-year PPA starting in 2025 is over 70 euros per MWh for solar and over 80 euros per MWh for onshore wind, the Aurora study determined.

Though supply for PPA contracts is currently much higher that demand, increased demand from utilities and aggregators could balance the market by 2030, the study noted.

The fair market value of a PPA depends on the asset’s capture price, the value of risk and hedge as well balancing cost and value of Guarantees of Origin (GO) certificates, the study pointed out.

GO certificate fee up tenfold in a year, suppliers paying dearly

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Demand for green-energy Guarantees of Origin, EU certification enabling end consumers, including domestic consumers, to track the origins of electricity they consume, has grown significantly over recent months, leading to a shortage of GO certificates and price rises several times over levels recorded a year earlier.

With the GO deadline for electricity usage in 2022 expiring today, a number of companies have scrambled to cover their basket of green-energy products last year, and needed to spend significantly increased amounts.

Around this time last year, suppliers in Greece could secure green-energy certificates at a price of between 0.30 and 0.55 euros per MWh, but prices have soared tenfold over the past twelve months to levels of between 4 and 6 euros per MWh at present, market sources have informed.

Demand for GO certificates grew considerably around Europe in 2022, leading to a shortage in Greece as a first round of auctions for domestic GOs has yet to take place following the establishment, last summer, of a new trading system for the acquisition of GO certificates in Greece.

The Guarantee of Origin (GO) is the main and only electricity tracking instrument in Europe that gives electricity consumers the power to actively choose sustainable power production over fossil-fuel based electricity and hence send market signals about their demand.

 

Renewable Energy Guarantees of Origin auctions in first half

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Auctions for Renewable Energy Guarantees of Origin, providing transparency to consumers about the proportion of electricity that suppliers source from renewable generation, a scheme required of all EU member states, are planned to be launched in Greece during the first half of the year.

These auctions promise to create new conditions in Greece for the establishment of green electricity tariffs for consumers wishing to support the decarbonization of the country’s energy mix.

RAE, the Regulatory Authority for Energy, has put forth, for consultation, Renewable Energy Guarantees of Origin regulations proposed by DAPEEP, the RES market operator. This procedure is scheduled to be completed on January 9.

The authority is expected to have approved the regulations for Renewable Energy Guarantees of Origin auctions by the end of this month, thus establishing a comprehensive framework for the creation of a trading system for “green” certificates in Greece.