While declining to disclose details of the contract for competitive reasons, Eneco's Cor de Ruijter describes the deal, which was set up by an independent energy broker, as a "serious commercial transaction." As such it represents a significant milestone for RECS, which began its test phase in January. "We made a conscious decision to use RECS because we believe that at present it represents the state of the art," says De Ruijter.
The aim of RECS is to promote the use of renewable energy "by making its environmental benefits tradable, separately from the physical energy flow, under internationally harmonised rules. Within RECS, organisations co-operate to develop harmonised and standardised certificate systems for renewable energy."
Hydro to Holland
The destination of the Swedish hydro power is still to be decided. Speaking before a surprise government announcement that all hydro was to lose its green status from 2002, De Ruijter was hopeful that the Swedish power would eventually qualify for renewable energy certificates -- and the associated tax relief their purchase gives to domestic consumers from ecotax on electricity. As "small hydro" under 15 MW it met the existing Dutch definition of green power and thus looked likely to be certified if the ban on green power imports was lifted, as has happened (page 29).
Following the government's decision to disqualify hydro, taken in part to prevent the Dutch market being flooded with cheap Scandinavian power, Eneco plans to revert to its original fall back position and sell the Swedish power to its larger commercial and institutional renewable energy customers, even though they do not qualify for ecotax relief.
Although the government decision to rule out hydro has been condemned by other Dutch utilities, De Ruijter sees no reason to panic. The RECs certificates mean the power can be sold as green electricity to larger customers, even if they cannot claim ecotax relief.
Peter Niermeijer, secretary of the RECS platform, knows no details of the deal but is delighted that the first significant commercial transaction has taken place while the RECS system is still in its test phase. "This will be the first of many," he predicts. He is, however, curious how Eneco plans to import the certificates when there is, at present, no Dutch issuing body authorised to redeem them. "They will probably redeem them immediately with the Swedish issuing body, grid-operator Svensknet, and an accountant would accept that as proof of ownership," he surmises.
The Eneco deal follows an earlier shopping spree by Nuon, the Netherlands' second largest utility, which imported renewable energy certificates from the US and Switzerland in May this year. The American certificates, equivalent to some 50 GWh, originate in a landfill project in New Jersey, the 10 GWh Swiss certificates are from a recently renovated hydro plant in the Bergell valley. Nuon's purchases were not, however, channelled through RECS. "At the time, we didn't believe the RECS system was strict enough," says Nuon's Annemarie Goedmakers. "So we put together our own team of accountants and certifiers and did it that way. Of course if there are more players, a market moves to a more mature situation. We were the first movers and we are happy to see followers."
Like Eneco, Nuon's green certificates are being used for large commercial customers: "We can use them for every customer that has no legal obligation and has no financial benefit from their use -- a market will start with movers who want to move even if there is no obligation."
In 1999, Dutch utility ENW, later taken over by Nuon, kicked off international certificate trading when it bought 200 renewable energy certificates for a "nominal sum" from the UK's National Wind Power (NWP). The ENW/NWP deal was intended to illustrate the potential of cross border certificate trade. Both Eneco and Nuon say further international certificate deals are in the pipeline.