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A solution in sight

Green energy certificates have several distinct roles, but their fundamental purpose is to provide proof that green power has been fed into the electricity system. They gain value when used to offset carbon emission penalties, when submitted to avoid penalties for not meeting a mandated renewables target, or when sold to customers voluntarily paying more to buy power that is guaranteed renewable. It is the use of one certificate for so many roles that is causing much of the consternation among current and would-be certificate traders.

The concept of a multi-use certification system is being developed by the international Association of Issuing Bodies (AIB), a grouping of market players formed in 2002 to ensure a "reliable, transparent and internationally applicable system for trading energy certificates." Presenting its ideas so far, the AIB unveiled two options at the recent REXchange conference in Amsterdam (main story): the first, a "single Guarantee of Origin" (GO), is to be used primarily for disclosure, but could also be used for support and target counting. AIB's second option is the "multiple GO model," with more than one GO for each unit of energy: one for disclosure to enable the voluntary green market to continue, and another GO to facilitate support and count towards national targets.

The AIB also suggested that only GO from new renewable energy facilities should be used for target counting and cross-border transfers for meeting targets, while GO from existing plant could be left to the voluntary market. From AIB, Christof Timpe wanted to see GO issued for all sources of electricity. "The GO market puts a cost on renewable generation that is not there for non-renewable generation. That is not fair," he said.

Overall, the AIB concluded that the provisions in the European Commission's proposed renewable energy directive for the use of GO are an improvement on the 2001 renewables law, but amendments need to be made. "The changes required are quite small," said AIB's Mark Lehtovaara. Timpe added: "Some eighty to ninety per cent of what is in the draft directive makes us happy. It is only twenty or ten percent that worries us."

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