What are Guarantees of Origin (GOs)?
GOs are based on the European Union system (2009/28/EC), which aims to promote the use of renewable energy sources and reward companies that produce electricity from renewable sources. The idea behind the system is to ensure the traceability of renewable electricity and support further development of green energy production. Therefore, GOs are often referred to as green certificates in everyday language. With this system, a change was made so that those who produce energy from renewable sources continue to produce electricity, but in addition, they have the option to request GOs that correspond to their electricity production. The GOs are an independent product, unrelated to the production.
Why buy Guarantees of Origin?
Many companies, especially in manufacturing, want to be environmentally responsible for the CO2 emissions their operations cause. One of the things they can do is buy GOs and thus ensure that their electricity consumption is 100% renewable. Additionally, this supports the further development of new renewable energy plants.
There is nothing preventing individuals from using the system if they want to achieve the same goals.
Who mainly wants Guarantees of Origin?
Globally, it is mainly large companies that seek to maintain good environmental accounting because it makes them more attractive investment options.
How do transactions with Guarantess of Origin take place?
A GOs is issued when an electricity producer requests it and it is valid for 12 months from the production time. When the end user requests that their consumption be certified, the electricity producer deregisters the GOs in the same amount as the user has used, but the accounting for this is based on the previous calendar year. Following the deregistration, the producer notifies the regulatory authority (Orkustofnun) that the respective customer now has certified electricity consumption, and Orkustofnun verifies the deregistration with data from Landsnet.
Transactions with GOs can take place between parties so that brokers and producers can buy and sell them among themselves before they are finally used to certify electricity consumption within the AIB system (https://www.aib-net.org/) to which Iceland is a party. Therefore, Icelandic GOs can be used to certify electricity consumption abroad and vice versa.
Does HS Orka sell origin guarantees?
Yes. HS Orka sells GOs, primarily from its own production, but only guarantees that are not used for customers who have requested their electricity consumption to be certified.
What happens if an electricity user does not buy origin guarantees?
Electricity users who do not have guarantees written off for their electricity consumption will have almost the same general composition of electricity recorded in their accounts as is present in the 28 member countries within AIB. This composition has included, among other things, nuclear power and fossil fuels as energy sources.
Who manages origin guarantees for Iceland?
Landsnet is responsible for issuing and deregistering GOs for Iceland, as well as their import and export. Orkustofnun keeps track of usage to ensure that individuals and companies that have secured origin guarantees can confirm that they are using certified renewable electricity.
Are systems like origin guarantees a step in the right direction?
We believe so. Certification of renewable energy use is only possible with GOs, and renewable energy production matters globally. With GOs of electricity, users indeed pay an additional cost, but the payment is optional. At the same time, the most favorable development options are becoming increasingly expensive as the most advantageous options have usually already been utilized. The proceeds from the GOs are used for further development in the field of renewable energy utilization.
The number of member countries within AIB has increased in recent years, and no country has left AIB. Outside Europe, the number of countries using I-REC (International Renewable Energy Certificate) certification for renewable electricity has increased even faster.
A certification system for green hydrogen and green natural gas has also been established. It is therefore clear that GOs systems are strengthening and can easily support energy transitions in the future.