How does a contract for green electricity (from renewable sources) work in Europe? Is it reliable? What is the role of the supplier? And of the electricity grid? You can find the answers here!

1. 7 September 2018
(I corrected the graph on slide 5 2 December 2018)
A green electricity contract, how
does that work?
Guarantees of Origin make it reliable

2. Supplying electricity
Simple right?
Basically, an electricity supplier is acting as a contractual and
financial link between producer and consumer

3. Simple? With 2 production facilities…
…things get a little more complicated already

4. Title | 2 december 2018 | Slide: 4
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On the electricity grid, power has neither…
smell,
nor
colour
And that distinguishes electricity from other products
It’s impossible to label, nor to package the green electricity
separately!
Fuelmix

5. Title | 2 december 2018 | Slide: 5
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And if we now add a second consumer…
How to make green electricity reliable?
…things tend to get really complicated!

6. Title | 2 december 2018 | Slide: 6
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Why am I telling this story?
I am not an electricity supplier
I don’t produce electricity
But AIB’s focus is on the key element in this story:
the Guarantee of Origin
We are an international not for profit association with members
in 20 countries (and growing)
Our goal is to have Europe collaborate around the instrument
that makes green electricity trustworthy
Association of Issuing Bodies

7. GOs: the principle…
… is “book
and claim”

8. Title | 2 december 2018 | Slide: 8
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Status of AIB membership in Europe
MembersMembers
Formal applicantFormal applicant
Active Observers
Countries to observe

9. Title | 2 december 2018 | Slide: 9
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AIB’s activities (1)
• Developed and maintains the European Energy Certificate
System, which acts as a de facto standard
• Operates a hub for trading GOs
-> Vital role in GO market and disclosure
• Has taken over operational tasks from RE-DISS (2016):
– Residual mix calculation
– Country profiles
• Member audits/reviews
• Fraud prevention
• Policy guidance: Reflection Paper RES Directive (June 2015),
Reaction to the proposals on GOs in RED II,…

10. Title | 2 december 2018 | Slide: 10
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European framework – 3 Directives
Internal Energy
Markets Directive
2009/72/EC
Energy
source
disclosure
RES Directive
2009/28/EC
RES
GOs
Energy Efficiency
Directive
2012/27/EC
HEC
GOs

11. Code of conduct| 19 May 2015 | Slide: 11
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Guarantee of Origin: Legal framework
The Guarantee of Origin (GO) is defined as:
a unique, tradable and transferable electronic document
with the sole function of providing proof to a final customer
that a given share of energy was produced from renewable
sources / high efficiency cogeneration
To claim to have used 1 MWh of electricity from renewable
sources, the associated GO needs to be cancelled in the registry
of the Issuing Body of the country of consumption
This prevents double counting, guaranteeing that no RES MWh
can be sold/claimed twice

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So what are GOs for anyway?
Given that GOs are for "proving to final customers the share or
quantity of energy from renewable sources in an energy
supplier’s energy mix“, so called ‘Disclosure information’,
their purpose is not (explicitly) to support or stimulate new
investments in renewable production capacity!
GOs should be seen as an instrument for consumer
empowerment, not for direct investment stimulation
Without GOs consumers would have to be passive!
GOs are time stamped and expire if not used, but then end up in
the residual mix, and cannot be claimed by a single consumer…

13. Title | 2 december 2018 | Slide: 13
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Disclosure and GOs…
… are two sides of the same coin
•GO is proof of production
•Disclosure information is proof of consumption
From production to consumption is one single process chain,
so from a policy perspective, they need to be looked at as one
integral process
The current disclosure process is on an annual basis
The Clean Energy Package opened a discussion about the lifespan
of the GO…

14. Title | 2 december 2018 | Slide: 14
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Staggering growth of demand for GOs

15. Title | 2 december 2018 | Slide: 15
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‘Oversupply ‘ is quickly becoming an argument about the past!

16. Title | 2 december 2018 | Slide: 16
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Consumers are getting pickier and rightly so!
Trends:
Locally produced
From particular (renewable) sources:
– Solar
– Wind
– Hydro
– …
Unsupported production
From recently build facilities
Or a combination of all of the above…
Trends in electricity sourcing
GOs
facilitate
such
choices!

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CO2 is an important part of this!
Grid CO2:
600g/kWh
Hydro CO2:
0g/kWh
Nuclear CO2:
0g/kWh
Wind CO2:
0g/kWh
Coal CO2:
800g/kWh

18. Title | 2 december 2018 | Slide: 18
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Mission of GOs
Electricity consumers must be able…
•To choose power from a specific origin
•To trust in the system that guarantees green electricity: no
double counting or ’greenwashing’
•To be informed and understand how their decisions influence
the planet and society,
•To take responability for their impact on the environment and
the climate, be accountable
•(for multinational consumers) To be able to use the same
concept and processes all over the AIB-area

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The Green Power Market: Diversity!
0,35
€
/MWh
3 €
4 €
1 €

20. Corporate sustainability strategies
Level 1: on site investment
No explaining to do, marketing is no-brainer
Need for financing, physical circumstances must be suitable, lot’s of
partnerships and/or responsibilities
Level 2: off site investment, e.g. Power Purchasing Agreement with a
newly built or to be built wind park
Need for finance but can be shared, lot’s of partnerships and/or
responsibilities, but how to prove you are using the power from the
wind turbines?
You need GOs!
Level 3: sourcing green electricity: you need GOs!

21. Title | 2 december 2018 | Slide: 21
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Additionality?
A rising demand for electricity from renewable sources will
contribute to more production
It’s basic economics!
GO is not homogeneous, generic instrument: you can ask for
locally produced, for specific technologies,…!
Greenwashing?
‘Greening coal power’ is not possible, you can only buy electricity
and buy GOs to make sure that you use green electricity
But electricity suppliers must inform consumers to the extent
they desire!
Are you making a difference?

22. AIB copyright © 2017. We reserve the rights in this document and in the information contained therein.
Reproduction, use or disclosure to third parties without express authority is strictly forbidden.
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Google it! Additionality
“Additionality is a tricky concept”
Imagine a power company built a wind farm many years ago. They built it because they thought it was good
business at the time, but the fact that it was a renewable resource was not important to their decision. They
currently sell the power into the grid, and they’re happy with their investment. Moreover, this power
company has no plans to build any more wind farms. The power company figures it could sell Google the
output of their wind farm; for their existing customers they would just make up the difference by buying some
other source of energy, perhaps from the coal plant down the street.
Say the wind project doesn’t yet exist. There is a company that wants to build one, but they need a reliable
customer to help them make the project financially sound. In this scenario, signing up would spur the
development of additional renewable power.
Perhaps a company does own an operating wind project, and is known to be a serial developer of renewable
energy projects. They use the cash flow from one project to finance the next or to convince Wall Street that
they have bankable income. As in the previous case, we would consider the power from this wind farm as
additional since we have confidence that the proceeds will be used to finance additional renewable power.

23. AIB copyright © 2017. We reserve the rights in this document and in the information contained therein.
Reproduction, use or disclosure to third parties without express authority is strictly forbidden.
The AIB is a non-profit-making international association.
Google it! Additionality
“Additionality is a tricky concept”
Imagine a power company built a wind farm many years ago. They built it because they thought it was good
business at the time, but the fact that it was a renewable resource was not important to their decision. They
currently sell the power into the grid, and they’re happy with their investment. Moreover, this power
company has no plans to build any more wind farms. The power company figures it could sell Google the
output of their wind farm; for their existing customers they would just make up the difference by buying some
other source of energy, perhaps from the coal plant down the street.
Say the wind project doesn’t yet exist. There is a company that wants to build one, but they need a reliable
customer to help them make the project financially sound. In this scenario, signing up would spur the
development of additional renewable power.
Perhaps a company does own an operating wind project, and is known to be a serial developer of renewable
energy projects. They use the cash flow from one project to finance the next or to convince Wall Street that
they have bankable income. As in the previous case, we would consider the power from this wind farm as
additional since we have confidence that the proceeds will be used to finance additional renewable power.
ADDITIONAL!
ADDITIONAL!
NOT ADDITIONAL!

24. About NIKE ELC
• European Logistic Center in Laakdal (Belgium) since 1994
• 1850 workers + 800 extra in peak periodes
• Capacity will double by new next door site
• Strong focus on sustainability :
• Transport :
• 95 % transport by ship
• Electrical fork lifts and yard hogs
• Carpooling, electrical vehicles, (electrical) bikes
• Energy :
• 6 Wind Turbines of 1,5 MW
• 1 MW of solar PV
• Ambition to purchase nothing but renewable energy
CEER © Zero Emission Solutions

25. 2015
Biogas plant 2 MW
Hydro plant 1 MW
Wind turbines 9 MW
PV 1 MW
CEER Green Workshop – 19/06/2015 © Zero Emission Solutions

26. • Corporate Strategy:
• 100 % renewable energy
• Preferably by auto consumption
• If not: by purchase from local renewable energy producers
• Maximum diversity in technology
• ‘offset’ of electricity:
• 1 MW Solar PV project on top of building
= 0,9 GWh production and instant consumption
• 6 Wind turbines on site:
• Owned by third party
• Injection of 16 GWh into the grid
• NIKE (ZES) buys GOs from producer
• 2 GWh of GOs from hydro plant
• 4 GWh of GOs from neighbouring biogas plant
• Monthly cancellation in VREG-account
Case study: Zero Emission Solutions for NIKE
CEER Green Workshop – 19/06/2015 © Zero Emission Solutions

27. GOs are recognised as strategic instrument now
• On site: for claiming the green character of production (non-
tradable GOs)
• Off site PPA:
• Needed to ‘close’ the business model
• Trusted and understood by finance providers
• Green procurement:
• Understood by buyers,
• Reassured by the possibility of choice
• Many goals: CSR, Carbon footprinting, SBT,…

28. AIB copyright © 2017. We reserve the rights in this document and in the information contained therein.
Reproduction, use or disclosure to third parties without express authority is strictly forbidden.
The AIB is a non-profit-making international association.
Regulators should verify and inform!
An example is the ‘Origin
Comparator’ of Belgian
regulator VREG which
allows consumers to
compare the fuelmix of
suppliers down to
individual contract level
For RES, information on
technology and country of
origin is given
Empowering information
for consumers!

29. AIB copyright © 2017. We reserve the rights in this document and in the information contained therein.
Reproduction, use or disclosure to third parties without express authority is strictly forbidden.
The AIB is a non-profit-making international association.
Regulators should verify and inform! (2)
With VREG’s ‘Greencheck’ you can verify whether the electricity
supplier is fulfilling the promise of supplying RES originated power

30. Reliable and transparent
AIB facilitates reliable transparency through standardisation:
- Where, How, When is the power produced?
AIB members commit to following a unique standard and consistent
methodologies
Peer reviews ensure credibility and reliability
Our goal:
a transparent market,
where empowered consumers
drive the energy transition

31. AIB - guaranteeing the origin
of European energy
Dirk Van Evercooren, AIB President
dirk.vanevercooren@aib-net.org
+32 (0) 478 550480