How will origin guarantees help to speed up the energy transition?

How will origin guarantees help to speed up the energy transition?

In the Energy Community Contracting Parties, the transition to a low-carbon economy dependent on clean energy is well underway. Governments are implementing renewable energy schemes throughout the country. To guide this transition, national energy, as well as climate plans, are being developed to establish renewables targets for 2030 as well as even beyond in line with the EU‘s aggressive climate goals.

A successful scheme of origin guarantees may aid the region’s energy transition and improve renewable energy investment. Consumers in the Energy Community are increasingly eager to participate in the energy revolution, and origin guarantees would allow them to do so. Renewable energy certification’s primary aim is to allow transparency, exposing the source of energy supplied to final customers. Consumers may select the source of their energy thanks to guarantees of origin (GOs).

Consumers cannot physically detect whether a certain volume of energy obtained from the grid comes from wind or fossil fuel sources until it reaches the grid. Energy certification by assurances of origin demonstrates to customers in the Energy Community Contracting Parties that the product they bought is really green and empowers them to participate in the energy transition.

Although their primary aim in the EU is transparency, many factors render GOs certificates an appealing method for growing renewable energy adoption. GOs are a product in the sense that they encourage investments in renewable energy (RE) generation as well as draw investors who are dedicated to utilizing renewable energy sources in a world. In this manner, GOs help to meet clean energy goals indirectly.

Governments are constantly searching towards zero-subsidy as well as market-driven models to fund clean energy initiatives, and GOs can benefit by lowering the cost of help schemes over the period. Issuing GOs as well as auctioning them on the market could help prevent double subsidies by allowing the state to use the proceeds from the auctions to cover the expense of renewable funding.

Auctioning is becoming more common in European Union member states. Croatia, France, Italy, Luxembourg, and Slovakia have already developed auction schemes for GOs from publicly subsidized RE manufacturers. The benefit from the selling of GOs is usually returned to the Treasury and used to reduce the public assistance program’s burden.

For RE manufacturers and vendors in the Energy Community Contracting Groups, GOs are becoming highly appealing. GOs may provide an extra stream of income for RE manufacturers that are not covered by a subsidy program, as well as allowing providers to verify the source of RE on a customer’s energy bill.