Guarantees of Origin and Corporate Procurement Options

OCTOBER 2021
Guarantees of Origin and

Corporate Procurement Options
Disclaimer: RE-Source Founding Associations:
This report has been prepared by the RE-Source Platform. It is being furnished to the recipients for general
information purposes only. Nothing in it should be interpreted as an offer or recommendation of any
products, services or financial products. This report does not constitute investment, legal, tax or any other
advice. Recipients should consult with their own financial, legal, tax or other advisors as needed. This report
is based on sources believed to be accurate. However, the RE-Source Platform does not warrant the accuracy
or completeness of any information contained in this report. The RE-Source Platform assumes no obligation
to update any information contained herein. The RE-Source Platform will not be held liable for any direct or
indirect damage incurred by the use of the information provided.
Authors:
Guy Brindley, WindEurope
Adam White, RECS International
Hannah Hunt, RE-Source Platform
We would like to extend a special thanks to the members of the RE-Source Steering Committee and the RECS
International board who contributed with their knowledge and experience to this report and reviewed the
final document.
The RE-Source Platform was established in June 2017. This report was published in October 2021.
The report can be downloaded on the RE-Source Platform’s Renewable Energy Buyers Toolkit. Please get in
touch with the RE-Source Platform if you have any comments or feedback on the report and its content in order
to enrich our ongoing work in this field.
If you would like more information on the contents of this report or on the work
of the RE-Source Platform, please contact [email protected].
Design:
Lin Van de Velde, Drukvorm
2
Contents
Guarantees of Origin and Corporate Procurement Options
WHY HAVE WE WRITTEN THIS REPORT?............................................................. 5

TOWARDS 100,000 CORPORATES........................................................................... 5
GLOSSARY OF TERMS................................................................................................... 6
PART 1. GUARANTEES OF ORIGIN........................................................................................... 7
The basics of buying and selling renewable electricity ...................................... 8
Bundled vs. unbundled GOs...................................................................................... 9
Buying renewable electricity around the world . ................................................. 9
Energy certificates for other generation technologies....................................... 11
GO prices ...................................................................................................................... 11
GO market facilitators................................................................................................ 12
Contents
PART 2. CORPORATE GO PROCUREMENT OPTIONS........................................................ 13
The impacts of corporate purchases of GOs.......................................................... 14
Unbundled GOs: One-time purchases..................................................................... 17
Unbundled GOs: Supply contracts........................................................................... 19
Green electricity supply............................................................................................. 20
Case study 1: Lactalis Group signs up for renewable energy
for Spanish operations . ....................................................................................... 22
Power purchase agreements (PPAs)....................................................................... 23
Case study 2: Ineos purchases 198 GWh of electricity from Belgian
offshore wind project .......................................................................................... 25
PART 3. GO MARKET OUTLOOK AND POLICY RECOMMENDATIONS....................... 26
GO market outlook..................................................................................................... 27
Case study 3: 24/7 in Norway – The next step in renewable procurement .... 28
Case study 4: Vattenfall and Microsoft pilot an hourly clean energy
matching platform................................................................................................. 29
Case study 5: M-RETS supporting 24/7 carbon-free energy in North America... 30
Policy recommendations............................................................................................ 32
3
Why have we written this report?
Why have we written this report?

The European Union has set ambitious targets for the The spectrum of business models in this report • Part 1 outlines the need and motivation for GOs
decarbonisation of the economy, aiming to become correlate with a range of impacts on broader electricity including an explanation of the GO market.
the first climate-neutral continent by 2050. sector decarbonisation, from the unbundled GO to the
long-term, time-stamped GO supply contract bundled • Part 2 describes the more common procurement
Corporates are increasingly looking at ways in which with electricity supply in a power purchase agreement models, from unbundled GOs to long-term PPAs,
they can contribute directly to the decarbonisation (PPA). The right business model for your company including analyses of the complexities and potential
of the electricity grid and reduce the impact of their will depend on a large number of factors including impacts of each business model.
own operations on the environment. This is not just your size, experience, risk tolerance, market, etc. We
to minimise their carbon footprint, but to gain an encourage all corporates to try to maximise their • Part 3 highlights future trends in the GO market,
economic competitive edge and respond to consumers impact for their particular set of circumstances. the outlook for corporate sourcing strategies, and
and investors that increasingly value sustainability. policy recommendations required to unlock massive
The general public also benefits from the purchase Your company can make a difference, even if it is corporate sourcing potential in Europe.
of renewable electricity by corporates, as renewable small at first. This could be the first step of a journey
assets entering the electricity grid displace fossil-fuel towards an electricity strategy with major beneficial We hope this report helps you on your way to
generated electrons. impacts on the environment and society, and of course purchasing renewable electricity and contributes to
to your business. our collective goals in the fight against climate change.
For most companies, renewable electricity supply and
renewables-based electrification will be the fastest This report has been written to provide information
and most efficient path to reducing emissions. In on European renewable electricity procurement
Europe, there are a multitude of business models which strategies for corporates looking to start making
allow corporates to purchase renewable electricity, a positive impact on the environment, with a focus
with varying levels of complexity, commitment, and on the underlying key to all renewable electricity
costs, with the use of Guarantees of Origin (GOs) as purchases: the GO. The report has been written in
the means of validating the purchase of the renewable three parts:
electricity.
4
Towards 100,000 corporates…
Towards 100,000 corporates…

It can be difficult for corporates who are new to This report furthers one of the core objectives of the • The Template Corporate PPA Contract which can
renewable electricity sourcing, and/or new to RE-Source Platform: to raise awareness of the benefits be used as a starting point for PPA contract
the European market, to take the first steps on of corporate sourcing and to facilitate business negotiations, co-developed by the European
their procurement journey. There are a number of transactions between buyers and sellers by making Federation of Energy Traders (EFET) and RE-Source.
different risks to consider when entering into any new them faster, easier, and cheaper. We have committed
renewable electricity purchase. to creating a European Renewable Energy Buyers • Corporate PPA training courses and digital
Toolkit to help navigate the market with increased matchmaking platforms provided by Pexapark and
The RE-Source Platform is helping buyers and sellers confidence.1 This report is part of that Toolkit. other partners.
to work together to simplify transactions and reduce
costs in the market whilst encouraging the innovation Corporate sourcing of renewable electricity is a
necessary for the development of the market. Additional resources in the Toolkit new and constantly evolving market in Europe and
include: across the globe. This report is designed to help
FIGURE 1 corporates understand the benefits, impacts and risks
Renewable Energy Buyers Toolkit • RE-Source reports and webinars including ‘The associated with renewable electricity procurement
Introduction to Corporate Sourcing of Renewable strategies and the certificate scheme underlying them,
RE-Source reports and webinars Electricity in Europe’ which gives an overview of thereby encouraging more active corporate buyers
the more common models of renewable energy of renewable electricity in the European market. We
European Corporate Sourcing Directory procurement in Europe. hope this will help us to achieve our goal of increasing
the 100 companies leading the way in renewable
Template Corporate PPA Contract • The European Corporate Sourcing Directory which electricity sourcing to the 100,000 we need to make
sets out for each European country which models the difference.
PPA training courses of corporate sourcing are known to have been used
and summarises existing incentives and barriers to
corporate sourcing in each market. #100to100k
1. See “RE-Source Renewable Energy Buyers Toolkit.”
5
Glossary of terms
Glossary of terms
As in any sector, there are many ways of saying the same thing in the renewable energy and power markets sector. This often creates confusion. In the table below, we
have specified a set of words and phrases which we have tried to use consistently throughout this report, what we mean by them, and alternative words/phrases that
can be used.
TABLE 1
List of key words and phrases
Word/phrase used in report Meaning Other common names/phrases

Corporate buyer The entity purchasing electricity from a renewable power plant Buyer, company, corporate, consumer, offtaker, purchaser
The procurement of renewable electricity by a corporate buyer. This can be through Renewable electricity sourcing, renewable electricity
Corporate sourcing
a PPA or other types of contracts such as leasing or green energy tariffs procurement
Renewable Energy Certificate, Guarantee of Origin, GO,
EAC Energy Attribute Certificate
REC, I-REC
A utility or similar entity supplying power (electricity, gas) to corporate buyers and
Energy provider Utility, supplier
other consumers
Renewable electricity Electricity produced from renewable projects Clean electricity, green electricity
Renewable asset, renewable facility, renewable
Renewable project Solar projects, wind projects, etc. which produce electricity from renewable sources
generator, renewable installation, renewable plant
Seller The renewable project producing electricity to sell to the buyer Generator, producer, owner, supplier
6
Part 1.
Guarantees of Origin
The basics of buying and selling renewable electricity

The Guarantees of Origin (GO) market in Europe - one • Claim the attributes as proof that they paid for a The GO market is separate from the electricity market.
of three major Energy Attribute Certificate (EAC) given type of energy. Even though GOs are associated with specific units
markets globally - was created because electricity of renewable electricity, the GO market is not about
cannot be physically tracked from a specific producer At their most basic level, the GO system (and all EAC allocating the electricity; rather, it is a system for
to a specific consumer in the same way it is possible systems) works as follows: allocating the electricity’s attributes. Most often
to do so for other products, e.g., fair trade coffee. these are “renewable attributes” so that electricity
This caused a problem for consumers who wanted to 1. A producer of renewable electricity generates a consumers can claim the consumption of renewable
buy renewable power. Even if a consumer buys their unit of energy, commonly one MWh; energy. All consumption must involve the cancellation
power from a specific producer, this electricity cannot of the associated GO, as that prevents double issuance
be packaged and delivered directly to that consumer’s 2. For each MWh of energy injected into the grid, the or claiming of the attributes of a particular unit of
facility. Instead, producers inject their electricity into producer receives a GO from the issuing entity. electricity.
the grid in one location and consumers take the same The GO, an electronic certificate, contains factual
amount of electricity off the grid in another location. information, known as attributes, about that
specific unit of electricity. This includes data on the What information is in a GO?
System operators must maintain a constant balance technology used to generate the electricity, where
between injection and consumption of power on the it is located, where it is produced, by whom, etc.; The GO system today functions so that each GO
grid. Without this balance, the grid would fail and contains information including but not limited to:
cause blackouts. When consumers buy power, they 3. The GO can be traded between market
are buying the right to remove a given amount of participants through registries with the ultimate • Energy source;
electricity from the grid. Therefore, the only way to aim of selling it to a consumer or retiring it on • Start and end dates of production;
track the production and use of a unit of energy, say behalf of the consumer, i.e., end-user; • Generator identity, location, type, date of
one megawatt-hour (MWh), along with its attributes, operation, and capacity;
is through a book and claim accounting system. In this 4. The end-user, or the end-user’s representative, • Whether the GO relates to electricity or
way, the European GO market enables participants to: consumes the GO by retiring/cancelling it so that heating or cooling;
it cannot be used again. Without cancellation, • Whether the installation benefits from state
• Book the attribute certificates when energy is there is a risk that one GO could be used twice support;
injected into the grid; (known as double counting); and • Date and country of issue; and
• Unique identification number.
• Transfer those attributes to the consumer, 5. The consumer can then claim to have consumed
sometimes through a supplier; and the electricity represented by the GO.
8
Bundled vs. unbundled GOs

A GO can be sold either together with the underlying much supply there is of the kind of renewable energy
energy, or separately from it. When the GO and the they are producing compared to the demand for it in
underlying energy are traded in a contract together, it that particular market (see “GO prices” on page 12). In
is described as “bundled.” When the GO and underlying all foreseeable cases, the GO contract revenue stream
energy are traded in separate contracts, it is described will be less valuable to the producer than the physical
as “unbundled.” In either case, the basic principles of power contract.
buying renewable electricity through the GO system
apply. GOs provide a means by which corporates can
document their renewable energy purchases. And
As will be discussed in Part 2, renewable energy the more renewables consumers buy, the greater the
producers can benefit from two revenue streams: 1. market signal for more renewable electricity and the
the physical energy, and 2. the underlying attributes more incentive, and income, there is for renewable
as represented by GOs. The amount a producer can electricity producers to invest in new installations –
earn from their GO contract depends mainly on how all of which helps to accelerate the energy transition.
Buying renewable electricity around the world
Europe on Guarantees of Origin, which both expands GO use described as a ‘boiled down’ version of the European
in the EU and strengthens the GO framework. Energy Certificate System (EECS) rules maintained
The GO system and market in Europe is enshrined in by the Association of Issuing Bodies (AIB) and which
EU law and has been developed through a series of The 2018 Renewable Energy Directive requires Member must be adhered to by all AIB members. Membership
Renewable Energy Directives that came into force in States to put in place mechanisms for the management of the AIB is voluntary, but, currently, all European
2001, 2009, and 2018. The most recent Renewable of GO systems that are compliant with the European single market countries (except Poland, Malta,
Energy Directive (2018/2001/EC) includes Article 19 CEN – EN 16325 standard. This standard is sometimes Romania, and Bulgaria (applicant)) are AIB members.
9
Because AIB Members follow the common practices North America and transparent attribute tracking systems, ensuring
set out in the EECS rules, GOs (often referred to as adherence to best practices for the avoidance of
EECS-GOs) can be traded between them through a EACs in North America are called RECs. As in Europe, double counting, double certificate issuance and
central hub, allowing companies who want to buy one REC is issued for every MWh of electricity double attribute claiming.
and/or sell GOs across the EU to benefit from fewer produced. U.S. REC markets are governed at the state
barriers to trade.2 level; as such, the country has a mix of compliance The I-REC Standard ensures all the EACs issued
markets and voluntary markets. Compliance markets nationally are done so in adherence with all major
In 2021, the European Commission proposed further can either require consumers to buy a certain international standards including the Greenhouse
changes to the 2018 Renewable Energy Directive, percentage of their energy from renewable sources or Gas Protocol (GHGP), CDP, RE100, International
including updates to further strengthen the GO require energy providers to sell a certain percentage Organisation for Standardisation (ISO) and others.
regulatory framework, as part of its broader ‘Fit for of their energy from renewables. U.S. states with EACs issued in compliance with the I-REC Standard
55’ package, intended to set the European Union on compliance markets set this percentage through are available in almost 50 countries across Central
track to reduce emissions by 55% by 2030. Renewable Portfolio Standards (RPS). and South America, Africa, the Middle East and Asia
(including all BRICS countries of Brazil, Russia, India,
The UK government has confirmed that post-Brexit, In U.S. compliance markets, RECs can also be bought China and South Africa). The I-REC standard is the
i.e., after 1 January 2021, GOs from EU Member States and sold voluntarily, in addition to the requirements youngest of the major EAC schemes and has grown
will continue to be accepted. UK energy providers will of the RPS. These additional sales are referred to rapidly since its inception in 2014.
continue to use Renewable Energy Guarantees of as regulatory surplus. Note that this concept is not
Origin (REGOs) and EU GOs to comply with their fuel relevant in Europe, where the sale or purchase of
mix obligations. In the long term, the UK government renewables is not currently subject to targets. National schemes
has indicated that recognition of GOs from Member
States will only continue on a reciprocal basis. Some countries also establish domestic EAC schemes
Rest of the World independently of the three main EAC standards set
Outside of Europe, two other major EAC schemes out above. These non-standardised EAC markets are
exist, with related markets: the North American Outside of Europe and North America, the main seen in a few locations around the world from T-RECs
Renewable Energy Certification (REC) scheme and EAC schemes adhere to the I-REC Standard. This in Taiwan to Indian RECs in India. Non-standardised EAC
the International REC Standard scheme. system is governed by the non-profit International markets are often not as well-regulated as standardised
REC Standard Foundation. The Foundation supports markets. This can make it difficult for stakeholders
local stakeholders and government authorities to to fully understand what they are purchasing, or to
implement EAC schemes that are internationally compare their purchases to a standardised EAC.
recognised and standardised and that also reflect local Another issue with non-standardised EAC markets is
or national regulations. Based upon the I-REC Standard they often lack a broad understanding of the basic
and associated Code documents – the blueprints principles of attribute tracking and place requirements
for attribute tracking standards – the Foundation on producers or consumers that limit the use or
authorises independent issuers to implement robust effectiveness of these markets.
2. See “AIB: Guaranteeing the origin of European energy.”
10
Energy certificates for other generation technologies

EAC schemes are mainly used to prove the consumption • Full consumption disclosure (certificates must be sources. Currently, consumers must go through
of renewable energy. However, the use of EACs is not cancelled for all energy consumption); and the process of purchasing and cancelling GOs to
limited to renewables and can document the use of prove renewable consumption, but non-renewable
any type of energy – schemes where this happens are • Full energy provider disclosure (a subtype of consumers face no such requirements. In theory, if
called full-disclosure schemes. These systems require full consumption disclosure requiring energy all consumers had to purchase energy attributes to
making it mandatory for market participants to prove providers to cancel GOs for all end-users’ energy prove the origin of their energy consumption, they
the origin of all their energy consumption through the use). could become more conscious of where their energy
cancellation of EACs. There are different means of comes from, motivating them to buy renewables.
achieving full disclosure: It is possible that full disclosure systems could Austria was the first EU Member State to introduce
incentivise renewable purchases by increasing full disclosure, followed by the Netherlands. France is
• Full production disclosure (all production must consumer awareness and contributing to a more level set to start voluntary full disclosure from 2022.
be certified); playing field between renewable and non-renewable
GO prices
In voluntary markets like Europe, EAC prices are Because the supply of renewable energy has tended remain private between the parties involved. The
set purely by the supply and demand dynamic. In to outstrip demand, average prices for European GOs most publicly available prices for European GOs come
Europe, the consumption of renewable energy – as have been relatively low, compared to power prices. from national auctions set up to sell GOs on behalf of
documented by the cancellation of GOs - has grown During the summer of 2021, prices were quoted countries that do not issue them to producers who
solidly over the last decade. In 2009, 244 terawatt- around an average of 0.45€/GO for energy generated benefit from public support schemes. The results
hours (TWh) worth of renewable energy GOs were in 2021 from the main product groups of hydro, wind, of the largest and most recent of these auctions, in
cancelled across Europe, growing to 702 TWh in 2018.3 solar, and biomass. However, strong market activity in France in March 2021, saw all available GOs sold at
Nevertheless, European GO supply has tended to September 2021 has seen these prices almost double, weighted average prices between 0.30€/MWh and
outstrip demand - in 2018, total renewable generation with prices for 2022 and 2023 generation quoted at 0.52€/MWh.
in Europe reached 1,244 TWh - indicating much greater twice as much – around 1.30€/GO. At present, the
use of GOs is possible.4 GO market is not very transparent, with very little However, these prices do not tell the whole story.
public exchange trading. Most contracts and prices Some specific GO products sell for up to 10 times
3. See “Development of the Guarantees of Origin Market 2009-2018.”

4. Note that in some markets, GOs are not produced for all equivalent MWh of renewable production; for example, if that project receives government support. However, even taking this into account, it does not
change the fact that much greater use of GOs is possible.
11
the prices seen above. The market for Dutch wind is main reasons. Firstly, the compliance market can hydro would produce close to normal volumes of
often noted as being one of the most competitive – drive demand, especially if the target proportion of power, prices fell again.
Dutch wind was quoted at 2.70€/GO in July 2021 for renewables to be bought or supplied is high enough
2021 supply. The Dutch national rail company has an to provide sufficient demand-side pressure. Secondly, RECS International recently published an examination
entirely electric fleet powered by local renewables, compliance markets can also include a fine, per MWh, of the supply and demand of certified European
and coupled with a strong local demand from other for the volume of renewable electricity that a supplier renewable electricity and found that: 1) While the
Dutch consumers, GOs for Dutch wind tend to trade at or consumer fails to supply or buy. This fine price then overall market for certified renewable energy in
significantly higher prices than the rest of the market. sets an effective compliance price, as it is the price Europe has been historically oversupplied, it is now
The value of other GOs, such as those included in PPAs that must be paid if compliance market participants coming into balance; 2) Certified supply only outstrips
or in domestic renewable electricity offers, may be fail to meet their target. demand for some renewable energy, most notably
higher or lower and may not be specified separately hydropower, the oldest renewable energy technology
from the total cost of each MWh of renewable GO prices may be volatile depending on the supply- and largest block of installed renewables capacity in
electricity, i.e., power price + GO price. In general, GO demand dynamics of the market. For example, in Europe; 3) Wind and solar GOs are in strong demand,
prices will rise in Europe as renewable energy demand 2018 European GO prices rose to around 2€/GO to the extent that demand for power from these new
catches up with GO supply. on the back of low expectations for Nordic hydro technologies now outstrips certified supply.5
generation following a prolonged lack of rain and
Prices in compliance markets, such as those found snow in reservoirs and glaciers. Projections put supply
in several U.S. States, may be significantly higher of GOs close to expected demand and so prices rose
than in voluntary markets like Europe. This is for two significantly. However, once it was clear that Nordic
GO market facilitators
As with all markets, dedicated market facilitators cancel GOs, whether they are a supplier or a market
exist in Europe to support GO sales and purchases by facilitator acting on a client’s behalf. The country-
providing services such as trading desks, brokerage specific rules for each AIB member country are set
facilities, or bespoke arrangements tailored to the out in ‘domain protocols’ maintained on the AIB’s
buyer’s or seller’s needs. These market facilitators website.6 All GO cancellations must be requested by
can also be GO account holders who support their eligible account holders from the system operators.
clients by managing the cancellation of the GOs they
have purchased. Different GO markets have different
rules about who can be an account holder and who can
5. See https://recs.org/news/new-document-the-supply-demand-of-certified-european-renewable-electricity/.
6. See “Domain Protocols.”
12
Part 2.
Corporate GO
procurement options
Corporate GO procurement options
The impacts of corporate purchases of GOs

Corporate procurement of renewable electricity has generators. As a result of increasing carbon prices or both, GOs possess a higher financial value, with
ramped up significantly throughout Europe as the EU from the EU’s Emissions Trading System, generators renewable projects benefiting from higher revenue
sets out its plans to reduce greenhouse gas emissions with the highest carbon content in their production streams. GO purchases that remove supply from the
by 55% by 2030 and to reach climate neutrality by (for example, coal and lignite) are generally displaced market can send an important investment signal to
2050. Corporate sourcing is set to play a significant first, reducing the carbon content of the electricity promote further investment in renewable energy.
role in helping Europe to reach its decarbonisation grid as a whole.
targets in a cost-competitive manner. Importantly, GO purchases bundled with electricity
GO purchases by corporate buyers have a wide-ranging through long-term PPAs provide renewable projects
In particular, corporate power purchase agreements impact on renewable energy generators, and thus on with a guaranteed offtaker and a fixed price (or some
(PPAs) have been steadily increasing in annual grid decarbonisation. As discussed in the previous level of price certainty) on the future sale of electricity,
contracted volumes. Since 2014, more than 15 GW section, GOs have an intrinsic market value which increasing certainty of revenue and unlocking cheaper
have been announced, including a record 3.5 GW depends on their supply and demand characteristics. capital in the form, for example, of loans from banks.
in 2020. But PPAs are not the only way businesses In markets with high demand (for example, in the The GO can therefore play a significant part in the
purchase GO-backed renewable electricity. There are Netherlands) or low supply (for example, in the Visegrad facilitation of the construction of new renewable
a range of different products available; as renewable region of Czechia, Hungary, Poland, and Slovakia), generators.
electricity becomes more mainstream, innovative
solutions and new technologies are likely to continue
the diversification of options for buyers. Additionality
The impacts of such GO purchases by corporate There is no common industry agreement on the term “additionality.” In Europe, it generally refers to the
buyers can be categorised broadly into 3 areas: addition of new renewable assets to the grid, or on-site at a company’s facilities, which would not have
decarbonisation, reputational, and economic. happened in the absence of the renewable energy purchase. For example, a corporate PPA would be
considered additional if, as a direct result of the agreement to purchase power from a future generator, the
project is able to attract financing and get the go-ahead it would otherwise not necessarily have received.
Decarbonisation Impact
The strictness of the definition, and the degree to which a corporate requires additionality in their renewable
Variable renewable electricity, i.e., wind and solar, purchases, will help decide the specific GO business model most appropriate to them. For example, a long-
is produced carbon-free with no marginal fuel term fixed-price agreement with a utility for green electricity supply may enable that utility to invest in new
costs. When new renewable generators are added renewable assets, even though that contract has no direct connection with the new renewable investments.
to the electricity grid, they replace generators with
higher marginal fuel costs – in most cases, thermal This report makes a clear distinction between additionality and impact. Corporate buyers may make an
impactful renewable electricity purchase that does not necessarily fulfil additionality criteria.
14
their efforts to decarbonise, the reputational risk of Third, we have increasingly seen lagging corporates
Emissionality not acting must be considered. be forced to make changes to their climate and
environmental strategies by internal and external
Another emerging indicator of decarbonisation This reputational risk is threefold. First, there is the risk pressures, whether their own shareholders or by
impact of a renewable electricity purchase that competitors gain a competitive edge from their governments.
is “emissionality.” This term represents a own renewable purchases – enhanced reputations in
consideration of the carbon content of the grid addition to potentially reduced electricity costs and Greater reputational impacts can also result when
to which a renewable generator is connected. price volatility. corporates, regardless of their capacity to procure
The impact would be greater if a renewable renewable electricity, maximise the positive social and
asset is connected to a grid with a high carbon Second, companies may be seen as not doing enough environmental impact of their purchase. For example,
content, rather than one with a higher level of with their sustainability actions. It is very important to purchase GOs from projects built in urban or rural
renewables, since the generator would more that corporates understand the reputational impact areas facing historical pollution or unemployment
likely displace an existing asset with a higher that their GO purchase strategy can have, and can issues, or from projects that incorporate sustainable
carbon footprint. Therefore, the purchase would communicate their claims clearly with the public. agriculture practices into their site.
have a greater decarbonisation impact.
Note that for all the cases below, the

decarbonisation impact will be greater when
dealing with a higher carbon grid. More
specifically, decarbonisation impact will be
greater when the marginal generators that are
displaced by new renewable generation have
high emissions rates.
Reputational impact
Investors and consumers are becoming ever more

conscious of the environmental impact of their
choices. Businesses that make clear efforts to reduce
their carbon footprint and their environmental impact
are likely to benefit from a positive reputational
effect and brand enhancement. In fact, as culture and
opinions shift, and more and more corporates step up
15
Economic impact for renewable electricity need to devise a strategy

to engage and own these risks, either by developing
The economic impact of GO purchases on the corporate in-house expertise or entering into partnerships with
buyer will be central to internal decision-making. For third parties which can accept some of the risk.7
this report, economic impact represents levels of
financial commitment required, including potential Potential economic impacts can also be offset by
credit support requirements. It also includes risks that potential economic benefits of GO purchases including
might be assumed and managed by the corporate as reduced energy cost volatility, visibility on future
part of the GO purchase. liability, and creating a long-term price hedge against
future electricity prices.
Generally speaking, GO purchase strategies with
greater decarbonisation and reputational impacts Corporate business cycles are typically 3-5 years and
will also have a greater economic impact on the signing a 10-year plus supply contract is likely to be
buyer. For example, bundled corporate PPAs have new to finance, risk, and legal departments, at least
many risks associated with them, risks that have at first. The purchase will require executive buy-in
traditionally been handled by utilities, developers, and alignment of all these departments in order to
and energy traders. Corporates aiming to sign PPAs successfully enter a long-term purchase agreement.
Corporate Renewable Procurement Capacity

As mentioned above, the extent to which a company corporate can accomplish at a given time, the same Corporates with a higher capacity can make more
can maximise the impact of their GO purchase purchase would represent minimal effort from a significant impacts through long-term contracts
strategy will depend on many factors. A wide range larger, more experienced corporate. which enable further investment in renewables,
of corporates are keen on procuring renewable extend the lifetime of existing assets, finance the
electricity with GOs. Their capacity to do so in Corporates with a lower ability – and willingness construction of new assets, facilitate new business
an impactful way will depend on circumstances – to enter into complex, long-term renewable models and technologies, and help to accelerate
including their sector, size, location, risk appetite, electricity contracts will be limited to more simple electricity sector decarbonisation.
corporate culture, proportion of electricity costs business models which require a lower degree of
vs. revenue, and more. While one GO purchase understanding, experience, financial commitment, We encourage all corporates to try to maximise their
strategy may represent the most that a more limited and risk exposure (price, volume, credit, etc.). impact for their particular set of circumstances.
7. For more information, see the “Risk Mitigation for Corporate Renewable PPAs” report in the RE-Source Renewable Energy Buyers Toolkit.
16

This section sets out the more common GO Procurement Option Variations available to increase impact
procurement options available in Europe, including
analyses of the complexities and potential impacts of Unbundled GOs: One-time purchases
Specifying location, technology, project, timing
each business model. The table below summarises the Unbundled GOs: Supply contracts
available business models, including variations that
Signing bundled contracts and specifying location,
can increase the impact of each particular purchase:
Green electricity supply technology, project, timing. Some green electricity
supply contracts will offer a level of additionality.
Longer contract terms, additionality and emissionality
Power purchase agreements (PPAs)
considerations, timing
Unbundled GOs: One-time purchases

The simplest way for a corporate to validate renewable Procurement Option Variations available to increase impact
electricity consumption is through the purchase
of unbundled GOs. Each GO represents 1 MWh of Unbundled GOs: One-time purchases
renewable electricity and can be cancelled against Unbundled GOs: Supply contracts
the energy taken from the grid. It is then possible for
the corporate to claim that 1 MWh of electricity was
powered by renewable energy. supply contracts will offer a level of additionality.
Decarbonisation Impact
The simplest and least impactful unbundled GO GO market has historically been oversupplied, primarily
purchase is a one-time purchase with no preference due to large supply from Norway’s extensive system
made on location, technology, project, or timing. In of hydropower generators. The gap between supply
such cases, the marginal benefit is the removal of GOs and demand has shown consistent signs of narrowing
from the market and the related signal that consumers in recent quarters, particularly in the wind and solar
wish to buy renewable energy. However, the European sectors, to the extent that a structural shift
17
may be taking place. However, a notable proportion creates a direct link to the renewable generation and At the other end of the spectrum, for a large,
of European renewable generators are not currently generates specific revenue for the project owner. experienced corporate, there is a reputational risk,
issued GOs for a range of market and regulatory particularly if the purchase is done in a market where
reasons (see “Policy Recommendations” on page 33). Finally, work is underway to create a system whereby a more impactful option is available. A one-time
Therefore, increased demand is key to boosting GO a GO can be time-stamped down to the shortest unbundled GO purchase could make sense for these
markets. Given current market dynamics, the impact of time period in which energy trades in the market (at companies in the case that they need to cover a small
a one-time vanilla GO purchase on the price of Europe- least hourly) (see Part 3). This would be an important percentage of residual electricity consumption not
wide GOs would be relatively small. Nevertheless, development to allow corporates to cover their covered by another purchasing strategy such as an
every GO purchase contributes towards achieving demand on an hourly basis with renewable electricity. existing bundled PPA (which are negotiated based
market equilibrium, and prices that can support and The outcome would be that GOs produced when wind on expected demand). Clear communication of the
sustain an accelerated energy transition. or solar resources are low would be under greater purchase, including the potential impacts, will be
demand, and therefore carry a higher financial value. important.
Where the buyer stipulates more conditions, the This would provide incentives for the development
decarbonisation impact can be greater. For example, of technologies, such as storage, to take advantage
specifying that the GOs must come from a particular of higher price periods, or demand-response which Economic impact
country or region, particularly one with high demand or would help reduce the cost for buyers by reducing
limited supply for GOs, can tighten the dynamics of that their electricity usage when renewable electricity The main benefit of simple unbundled GO purchases
specific market and therefore increase the potential supply is low and GO prices are high. is that there is no long-term commitment required
impact on prices. The same applies by specifying a and therefore no price risk and zero future liability. A
specific technology. For example, specifying that the corporate can essentially cover their electricity usage
GOs must be solar from Denmark can significantly Reputational impact from renewable energy with ad-hoc purchases. This
reduce the available pool of GOs, and increase the makes this strategy particularly useful for corporates
impact of that one-time GO purchase. If there is high The reputational impact of one-time unbundled GO that lack existing resources to pursue more impactful
demand for solar GOs from Denmark, and the value of purchases is subjective and will depend on many strategies.
those GOs increases, this should provide a signal for factors, including the type of purchase, the availability
investors to develop more solar in Denmark. Similarly, of resources in the country and the attitude and Furthermore, unbundled GOs are an essential tool for
in the Netherlands, there is high demand for wind GOs experience of the local and regional media. For a corporates for smoothing over any gaps in obligations
and limited supply. As a result, Dutch wind GOs tend to small, inexperienced corporate with a low corporate arising from the variable nature of other renewable
be more expensive, as mentioned in Part 1. renewable procurement capacity, they might purchases, avoiding damaging the reputation of the
experience positive reputational effects, particularly corporate’s overall renewable purchase program.
Corporates also have the option to purchase if they can associate their purchase with a renewable
unbundled GOs from a specific renewable asset. This asset in the vicinity of their electricity demand.
18
Unbundled GOs: Supply contracts

A corporate can have a greater impact with their
unbundled GO purchase by entering into a medium- Procurement Option Variations available to increase impact
to long-term contract for the future supply of GOs.
By committing to a schedule of future purchases at Specifying location, technology, project, timing
a fixed-price, the corporate can cover longer-term Unbundled GOs: Supply contracts
renewable energy claims, make a stronger financial Signing bundled contracts and specifying location,
commitment, and provide a stronger demand signal Green electricity supply technology, project, timing. Some green electricity
to the market. supply contracts will offer a level of additionality.
Decarbonisation impact
The additional decarbonisation impact from a supply Long-term contracts, i.e., longer than 5-7 years, provide GO supply contracts can be useful to cover residual
contract, compared to an ad hoc GO purchase, comes additional GO price and revenue stability to projects demand not covered by other procurement
from absorbing future supply, potentially raising compared to shorter contracts and provide clearer contracts, and in which case, should not carry a risk
future GO market prices and sending a stronger long-term market signals. A long-term purchase of negative reputational impacts. However, a clear
investment signal. of GOs from a specific project with specific time of understanding of the impact of the purchase strategy
production would provide the greatest overall impact. and communication to stakeholders will be important
As with the ad hoc purchases, the addition of more to mitigate against potential reputation impacts.
specific features such as location, technology, project,
or timing, can have a more profound effect on GO Reputational impact
market prices, particularly if the specifications are Economic impact
in areas with limited supply. Larger price impacts in The consideration of the reputational impact is similar
theory lead to stronger investment signals. to ad hoc purchases. Depending on the corporate’s The economic impact of an unbundled GO supply
ability and willingness to make impactful renewable contract will be greater than a one-time purchase as
In addition, if the supply contract stipulates a specific electricity purchases, the contracted GO supply may it involves an obligation to purchase GOs in the future,
project, that project directly benefits from a guaranteed result in an enhancement of brand reputation. But i.e., a liability. However, prevailing average GO prices
buyer of the certificates and a guaranteed revenue again, if the corporate has a high degree of expertise are low compared with average electricity prices, and
stream for the duration of the contract, reducing and resources, there could be a risk that the purchase therefore the financial commitment should not be too
revenue volatility and risk for the project. Of course, the is perceived in a less positive light. The more specific burdensome and this strategy should be achievable to
corporate buyer also benefits from reduced volatility the supply contract, the more likely it will be received some extent by the majority of corporates.
and price visibility on its future GO purchases. positively.
19
Green electricity supply

Corporates also have the option to enter into green process can be more simple and less time-consuming As with all types of green electricity supply, the
electricity supply contracts with energy providers, than a traditional corporate PPA negotiation between decarbonisation impact depends not just on the ability
i.e., utilities, for their GO purchase. These contracts the buyer and the renewable generator. of the energy provider to invest further in renewables,
can take a broad range of forms, from a short-term but also their willingness to do so. Corporate buyers
electricity supply backed by vanilla GOs, to a long- should be aware of the actual impact that their
term fixed-price bundled contract, with the GOs and Decarbonisation impact agreement will have on the energy provider’s practices
renewable power connected to one or more specific and investment decisions.
assets. At this end of the spectrum, there is little The decarbonisation impact will depend on how much
difference between green electricity supply and a the green electricity supply supports the energy At the higher end of the impact spectrum, green
corporate PPA. In these cases, the main difference is provider to invest further in renewable assets - or other electricity supply can have similar impacts to a
the negotiation of the contract occurs between the technologies related to electricity grid development corporate PPA. The buyer’s long-term contract can
buyer and the energy provider, and not between the to facilitate the deployment of renewable electricity. offer the utility a fixed revenue stream, for which they
buyer and the renewable generator itself. can supply energy from specific generators, including
At the lower end of the impact spectrum, a short-term new build projects which give buyers some degree of
The main benefit to the corporate buyer of choosing supply contract backed by vanilla GOs may provide additionality.
a green electricity supply contract is the ability to the utility with a minor increase in revenue. Since they
mitigate a number of risks associated with traditional will be accepting most of the risk associated with the It has become more common recently for corporates
corporate PPAs.8 The corporate can still negotiate a contract - and are best placed to do so, given their in Europe to sign long-term bundled green electricity
bespoke contract with their energy provider which experience and resources - the energy provider will supply contracts with specific renewable generators,
suits their risk appetite, but in general, the negotiation also charge a premium for the service. essentially a PPA, and at the same time top up their
residual demand with an additional supply contract
Procurement Option Variations available to increase impact provided by the same utility. This model is likely to
increase in popularity given the ability of energy
Specifying location, technology, project, timing providers to provide this direct link to a renewable
Unbundled GOs: Supply contracts asset, and to cover the rest of the consumption
Signing bundled contracts and specifying location, from their portfolio of renewable assets, allowing
Green electricity supply technology, project, timing. Some green electricity buyers a one-stop shop for their renewable energy
supply contracts will offer a level of additionality. purchases, and in some cases, satisfying 24/7 matching
Longer contract terms, additionality and emissionality requirements, as well (see Part 3).
8. For more information, see the “Risk Mitigation for Corporate Renewable PPAs” report in the RE-Source Renewable Energy Buyers Toolkit.
20
Green electricity supply can have other decarbonisa- However, there are reputational risks associated with Economic impact
tion benefits besides the support for new renewable the communication of the contracts, given the large
additions. Across Europe, as renewable generators range of contract types and the complicated (and The economic impact again depends on the green
exit support schemes, these generators are looking for possibly confusing) nature of the deals. Partnerships electricity supply contract and the degree to which
buyers to guarantee their offtake and cover continuing are important and often buyers will use one energy the corporate is willing to invest in the contract. A
operations and maintenance costs. Energy providers can provider for more than one of their deals. It is long-term fixed-price contract can have a significant
contract with these operating assets, helping to extend important that counterparties have an understanding economic impact on a corporate, and procurement
their lifetime and provide renewable electricity to of their own cultures and aspirations. managers will need to engage with many internal
buyers looking to meet their decarbonisation objectives. stakeholders for sign-off, including finance, legal, and
This satisfies impact criteria for many buyers, as it keeps Accusations of greenwashing can have negative risk departments.
a fully appreciated asset operating and providing reputational impacts. For example, if a buyer
renewable electricity to the grid at low cost. believes and communicates they are purchasing Since green electricity supply contracts tend to
100% renewable energy, but their utility neither allocate more risk to parties better equipped to
owns nor invests in renewables and simply covers the manage those risks, the economic impact may be less
Reputational impact electricity with vanilla GOs, then the decarbonisation in that respect. And if it is a short-term agreement with
impact would be limited. This has been known to be the addition of unbundled GOs to cover supply, there
Corporates can achieve a positive reputational impact the case in the past and highlights the need for buyer may not be much of an economic impact at all, just a
with green electricity supply, particularly when it can due diligence to understand the energy provider and premium on a standard supply contract. As we have
be marketed as a PPA, i.e., they can show a direct their products. tried to make clear in this report, this sort of contract
connection with a wind farm or solar park that may not carry the greatest impact in any sense, but it
facilitates the construction, or lifetime extension, of may be the most positive step a corporate can take in
the asset in question. a given time and situation.
21
Lactalis Group signs up for renewable energy for Spanish operations
Location:
Case study 1 Spain
Description:
From their portfolio of renewable assets in Spain,
Engie have committed to supplying the Lactalis
Group’s factories, warehouses and offices with
renewable electricity for 9 years from 1 January 2021.
The long-term nature of the deal facilitates further
investment, construction and maintenance of new
renewable energy projects in Spain.
The Lactalis Group is also able to cover at least 50% of

their electricity demand in Spain with the renewable
electricity, offsetting their carbon emissions by 10%
or around 26,950 tons of CO2 per year.
Companies:
Lactalis Group, Engie Spain
22

For all PPA structures, the generator’s GOs are
Procurement Option Variations available to increase impact
bundled with the renewable electricity supply to verify
Unbundled GOs: One-time purchases renewable consumption by the corporate buyer, and
their financial value is accounted for in the PPA price
Unbundled GOs: Supply contracts
the counterparties agree to in the negotiation.
Corporate PPAs are currently considered the gold
supply contracts will offer a level of additionality.
standard of corporate renewable electricity procure-
Power purchase agreements (PPAs) ment but there is still a range of types of PPAs with
varying impacts. It is convenient to separate PPAs
into two broad categories: PPAs with new assets and
A corporate PPA in its purest form is a long-term used by the corporate buyer. Virtual PPAs help to Lifetime Extension PPAs.
contractual agreement between a corporate buyer facilitate pan-European cross-border PPAs where
and a renewable generator for renewable electricity the buyer and supplier are in different countries.
supply backed by GOs. Corporate PPAs are generally Lifetime extension PPAs
structured as either:9
There is a percentage of the European renewable
• Physical PPAs: A contract that provides physical PPAs with new assets fleet which was constructed under various
power delivery with both parties located on the renewable support schemes. In the next 5-10 years,
same national or regional grid. A third-party If a corporate has the capability and willingness these assets will be exiting their support and will
intermediary will often be involved to deliver the to enter into a long-term fixed-price PPA (usually be looking for offtakers to continue operation.
generator’s energy, as well as any residual physical at least 10 years) then that agreement can With construction debt fully paid off, the agreed
energy demand through a sleeving arrangement. facilitate the construction of a new, or repowered, price must cover operations and maintenance costs
renewable asset. The guaranteed offtake and price only (though these costs are likely to be higher
• Virtual PPAs: A financial contract in which the certainty allows the renewable project to predict than with new assets). Since there is no need to
price for the underlying electricity is settled revenues with greater certainty. In addition, satisfy more stringent credit thresholds and tenors
through a Contract-for-Difference (CfD) structure. if the buyer is sufficiently creditworthy or can required by banks for lending to new projects, this
The only physical exchange is the transfer of provide sufficient credit guarantees, the project type of PPA offers an excellent opportunity to
the GOs. There is no physical transmission of is able to secure better financing terms, e.g., corporates who wish to sign PPAs but are unable to
energy between the buyer and the renewable more competitive interest rates, longer tenors, commit to longer tenors or do not have sufficient
generator. The renewable energy is delivered to additional capital, etc. creditworthiness for PPAs with new assets.
the generator’s grid independent of the energy
9. For more information on PPA types, see the “Introduction to Corporate Sourcing of Renewable Electricity in Europe” report in the RE-Source Renewable Energy Buyers Toolkit.
23
Decarbonisation impact Reputational impact power. Negotiations typically take upwards of 6-12
months with costly associated professional fees. We
Corporate PPAs with new wind and solar projects lead The GOs that are bundled into corporate PPAs prove see partnerships as being key to be facilitating more
to new renewable generation on the electricity grid, a direct link between the energy consumption by the efficient negotiations and contracting.
most often replacing fossil fuel powered generators. corporate and clean energy generation, which can
Therefore, there is a clear decarbonisation impact have significant and positive reputational impacts. There are also economic impacts which must be
of these PPAs. Some companies are increasingly considered carefully when entering into a contract
considering the emissionality of the specific PPAs which facilitate the construction of new to purchase a commodity over a long time period.
project(s) with which they sign PPAs. As mentioned renewable generators tend to garner the most Corporates are generally not used to this. A corporate
above, decarbonisation impact can be greater if a interest in the media as it is simple to understand and will often contract a PPA for a small proportion of their
renewable asset is connected to a grid with a higher there are clear benefits to the construction of new initial demand and gradually increase their renewable
carbon content, rather than one with a higher level renewable assets. electricity coverage by contracting for separate
of renewables, since the generator would more likely tranches, thereby diversifying risks over a portfolio
displace an existing marginal asset with a higher of contracts.
carbon footprint. Economic impact
Of course, there are benefits from signing long-term
Lifetime extension PPAs allow the continued The main advantages of a lifetime extension PPA fixed-price agreements. Indeed, in a recent corporate
production of clean, renewable electricity without are the reduced reliance on the creditworthiness of buyer survey, 92% of corporates indicated they were
the need to decommission existing assets. Generally, the offtaker, and the greater flexibility in contract purchasing renewable electricity for the economic
it is a benefit to extend the lifetime of existing term length. These differences greatly simplify the benefits.10 Renewables are cost-competitive in most
renewable assets since there are only operations and negotiation process, increasing efficiency and speed. geographies in Europe, and when companies are able
maintenance costs required to keep the asset running. They also open up a whole pool of potential corporate to commit to a fixed price over the contract term, this
However, it should also be understood that technology offtakers interested in corporate PPAs but unable to can prove to be a major benefit. With carbon prices
has progressed a long way in a short amount of time. commit to the demands of a long-term PPA with new increasing, there could be justification in assuming
Given the increase in installed capacity required in assets. there will be corresponding future electricity price
Europe to meet decarbonisation targets, it may also increases. However, this is in no way certain with large
make sense in some circumstances to repower the The economic impact of entering into a long-term PPA increases in renewable power, one can argue that
existing renewable asset, replacing older generators can be significant. Large corporates often develop future prices may decrease. Either way, it is fair to say
with more powerful, efficient generators at the same their own energy trading departments in order to carry that future prices are uncertain, and the ability to lock
site. out negotiations with counterparties and manage their in prices today removes volatility of electricity costs,
PPA portfolio. Understanding electricity markets and which can be a significant benefit for corporates.
For all PPA types, increased impact may also be trading is not a traditional necessity for corporates,
possible as corporates structure their contracts to but the knowledge and experience from an in-house
support 24/7 matching of production and consumption team of experts can greatly increase the efficiency
(see Part 3). of the negotiation process and their contracting
10. See “BayWa r.e. Energy Report 2019.”
24
Ineos purchases 198 GWh of electricity from Belgian offshore wind project
Location:
Case study 2 Belgium
Description:
The chemicals company Ineos entered into a 10-year
PPA for the output of the Northwester 2 offshore
wind farm in the Belgian North Sea from January 2021.
Over the duration of the contract, it is expected the
wind farm will deliver 198 GWh of energy which is
approximately 25% of the output from the wind farm
and is equivalent to a capacity of 55 MW.
RWE Supply & Trading GmbH purchased all the power

produced from Parkwind’s Northwester 2 early in 2019
with the goal of selling the electricity and GOs to large
industrials and municipalities.
The deal with Ineos allows the chemical company to

reduce its carbon emissions in Belgium by 745,000
tonnes.
© Parkwind
Companies:
Ineos, RWE, Parkwind
25
Part 3.
GO market outlook and
policy recommendations
GO market outlook and policy recommendations
GO market outlook
As more and more companies purchase renewable
electricity across Europe, GOs will continue to function
as the main framework for certifying and verifying
renewable consumption. Procurement solutions and
technologies are likely to continue to diversify for buyers.
Hourly matching GOs
Looking to the next decade, several companies are

seeking to match their demand with clean electricity
production on a more granular basis. In some cases,
they are moving toward hourly matching, e.g.,
24/7. The potential benefits of doing so include
increasing transparency of corporate sustainability
claims, increasing renewables investment, higher
decarbonisation impact, facilitating new business
models and technologies, and more.11
Corporate buyers and supporting market participants

(utilities, renewable generators, technology providers)
are taking a range of approaches to more granular In any scenario, the underlying GO framework will with hourly matching are being launched today and
matching strategies, drawing on different technology need to function so that it can facilitate the issuance are detailed in the EnergyTag initiative’s white paper.12
portfolios, impact criteria, and business models. For and cancellation of GOs at the level of granularity Any efforts like these should be seen as voluntary,
example, some companies have set 100% renewable requested by the buyer. Currently in Europe, GO or as an option to increase the impact of existing GO
electricity goals on an annual basis and complement issuance and reporting typically happens on an annual purchases. They should also be compatible with and
that goal with an hourly matched carbon-free target. or monthly basis. European demonstration projects not undermine existing GO frameworks.
11. For more information, see “A Timely Match: Accelerating power system decarbonisation by moving towards 24/7 matching in corporate renewable electricity (RES-E) and market integration” in the RE-Source
Renewable Energy Buyers Toolkit.
12. See “EnergyTag and granular energy certificates: Accelerating the transition to 24/7 clean power.”
27
24/7 in Norway – The next step in renewable procurement
Location:
Case study 3 Norway
Description:
Through this demonstration project, Unicorn,
Statkraft, Tibber, and Statnett aim to demonstrate
the feasibility of issuing GOs with hourly granularity,
matching them to the consumption profile of a chosen
consumer and disclosing the renewable consumption.
The demonstration project will prove that:
• Hourly issuance and matching can be achieved

within the EECS GO scheme;
• Hourly GOs can work within the existing IT systems

used by issuing bodies and the AIB hub.
Statkraft worked with Tibber to create a hierarchy

of demand, with Statkraft first delivering local
production, followed by neighbouring price areas,
backed up by Norwegian hydro assets. The project
utilizes the Statkraft asset portfolio in Norway to
ensure renewables are being consumed at all hours.
Companies:
Statkraft AS, Tibber AS, Unicorn, Statnett
28
Vattenfall and Microsoft pilot an hourly clean energy matching platform
Location:
Case study 4 Sweden
Description:
Vattenfall and Microsoft in Sweden successfully
piloted an hourly clean energy matching platform that
covers Microsoft’s datacenters in Sweden.
For this project, Vattenfall used Microsoft Azure

to build and deliver a solution that allows hourly
matching of clean energy generation with demand
for Microsoft and other Vattenfall customers. Clean
energy generation and energy consumption are
measured hourly and matched hourly on the Azure
solution, which enables transparency by providing
increased information about the hourly source of
energy associated with each MWh of consumption.
Companies:
Microsoft, Vattenfall
29
M-RETS supporting 24/7 carbon-free energy in North America
Location:
Case study 5 Midwestern U.S.
Description:
To support 24/7 carbon-free energy initiatives, M-RETS,
a renewable energy tracking platform, facilitated the
first-ever hourly REC claim when Google finalised an
hourly REC retirement in January 2021. This is the
first step in building out the data available in existing
environmental commodity markets like RECs to help
facilitate and quantify efforts toward economy-wide
decarbonisation in both voluntary and compliance
markets.
As part of Phase 1, M-RETS accomplished the following:
1. Developed technical tools to collect hourly

data beginning in January 2019. At publication,
M-RETS has more than 60 million MWh of hourly
generation data and growing.
2. Created an accessible user interface to both
view hourly generation data in the system and
download that data or access it via an application
programing interface.
3. Built advanced hourly reporting tools that allow
users to aggregate hourly generation from
multiple generators over time.
4. Built a retirement process that integrates
Companies: hourly generation data into the process when a
Google, M-RETS user retires a complete batch of RECs (i.e., not
subdivided after issuance).
30
GOs for carbon accounting While access to historical grid mix is available now project to have double the emissions impact of a nearly
on the ENTSO-E transparency platform, access to identical project (with a nearly identical generation
The GO system today functions so that each certificate validated, location-specific marginal emissions data is profile) located less than 60 kilometres away from
issued for renewable generation contains facts about still extremely limited in Europe. Potential solutions each other.
that specific MWh. Article 19 of the existing Renewable are being explored to calculate this data and make
Energy Directive states that each GO should contain it available to buyers. A 2021 REsurety and Brattle The locational marginal emissions (LME) tool, with an
information including but not limited to: Group white paper presents one potential approach initial release focused on Texas, provides information
to calculating marginal emissions impact based on the on carbon abatement value of specific renewable
• Energy source; timing and location of renewable generation.14 Their projects. This information could enable corporate
• Start and end dates of production; analysis shows a real world example where transmission buyers to focus on sourcing renewable energy from
• Generator identity, location, type, date of constraints in the U.S. state of Texas can cause one solar projects with the largest grid decarbonisation impact.
operation, and capacity;
FIGURE 2
• Whether the GO relates to electricity or heating or LME of Two Solar Projects in Texas Across an Example Day
cooling;
• Whether the installation benefits from state
support;
• Date and country of issue; and
• Unique identification number.
As corporate buyers increasingly consider the emissions

impacts associated with their GO purchases, one future
consideration will be whether, and to what extent, the
GO framework in Europe will evolve so that GO issuers
begin to include more information in the certificates
that would be useful for more detailed and accurate
carbon accounting. Potential data points could include
grid mix and marginal emissions rates at the time
and location of production, as well as actual marginal
emissions for the renewable generator.13 Potential
benefits of having this information include helping
companies achieve their broader decarbonisation goals
as well as helping them to better evaluate renewable
electricity purchases based on decarbonisation impact.
13. Marginal emissions rates are defined here as the amount of carbon emissions displaced by a MWh of renewable generation injected into the grid at a specific location and during a specific time period.
14. See “Locational Marginal Emissions: A Force Multiplier for the Carbon Impact of Clean Energy Programs.”
31
Policy recommendations
A well-functioning policy and regulatory framework In July 2021, the European Commission proposed prefer. The GO framework should function so that it
for GOs in Europe will be critical to corporate revisions to the Renewable Energy Directive in its ‘Fit can facilitate the issuance and cancellation of GOs at
sourcing efforts. The framework should be stable and for 55’ package to address these issues. Proposed the level of granularity requested by the corporate
predictable for businesses, and continue to improve amendments will require Member States to issue GOs buyer.
over time, particularly as corporate energy buyers to all renewable electricity producers. For example,
and other consumers are increasingly seeking more countries would no longer be able to retain GOs from In addition, as corporate buyers increasingly consider
detailed information on the origin of their energy. All assets receiving financial state support. the emissionality associated with their GO purchases,
updates to the policy and regulatory framework should adding information useful for carbon accounting
also be compatible with and enable the transition to GOs should contain an increased level of purposes could help corporate buyers to make
a fully decarbonised, resilient, and flexible electricity information in order to empower producers to more impactful investments based on potential
grid. market their renewable electricity, enable more decarbonisation impact.
accurate matching of renewable energy supply and
Member States should issue GOs to all renewable demand, and enable more accurate identification Member States should harmonise environmental
electricity producers, irrespective of whether the of the emissions benefit of particular renewable attributes on a single system across Europe.
renewable energy projects are installed behind-the- projects.
meter or receive state support. This will reduce complications for businesses
Transparent information on the timing of GO operating across multiple countries and facilitate
Some Member States retain GOs from renewable generation should be provided at a more granular level the development of liquid markets. Moreover, to
energy projects benefiting from State Aid because they than simply annually to support corporate consumers achieve a well-functioning framework for GOs, rules
fear the projects could receive double compensation. willing to attest to the matching of supply and demand. to guarantee the traceability and ensure issuance of
This breaks the link between renewable energy Members States should “time-stamp” the GOs issued GOs to all renewable electricity producers should
producers and consumers and prevents PPAs from to producers to know the precise time at which the follow a consistent approach across all Member States.
being signed. Article 19 of the existing Renewable underlying unit of energy (1 MWh) was produced. The Arbitrary rules for the retirements of GOs, such as
Energy Directive states that the price of the GOs current Renewable Energy Directive allows issuing requirements that only allow suppliers to retire GOs,
needs to be factored in the level of support to avoid bodies to define GO production periods, and most or that GOs must be retired within the same month as
any potential double compensation. GOs are also use annual or monthly periods – not the day, hour, or they are generated, should be eliminated.
not issued for behind-the-meter self-consumption in 15-minute balancing period. As such, time-stamping
some Member States, only for the electricity that it is would be compatible with and would not undermine
injected into the grid. This creates further challenges existing GO frameworks. It should allow corporate
for corporates as they may want to make claims buyers to continue validating their renewable energy
against renewable energy goals. consumption on an annual or monthly basis, if they
32
https://resource-platform.eu/
33

Guarantees of Origin and Corporate Procurement Options

Uploaded by

Copyright:

Available Formats

Guarantees of Origin and Corporate Procurement Options

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Guarantees of Origin and Corporate Procurement Options

Uploaded by

Copyright:

Available Formats

OCTOBER 2021

Guarantees of Origin and

WHY HAVE WE WRITTEN THIS REPORT?............................................................. 5

Why have we written this report?

Towards 100,000 corporates…

1. See “RE-Source Renewable Energy Buyers Toolkit.”

Word/phrase used in report Meaning Other common names/phrases

The basics of buying and selling renewable electricity

Bundled vs. unbundled GOs

Buying renewable electricity around the world

2. See “AIB: Guaranteeing the origin of European energy.”

Energy certificates for other generation technologies

3. See “Development of the Guarantees of Origin Market 2009-2018.”

The impacts of corporate purchases of GOs

Note that for all the cases below, the

Investors and consumers are becoming ever more

Economic impact for renewable electricity need to devise a strategy

Corporate Renewable Procurement Capacity

Corporate GO procurement options

Unbundled GOs: One-time purchases

Unbundled GOs: Supply contracts

Green electricity supply

Lactalis Group signs up for renewable energy for Spanish operations

The Lactalis Group is also able to cover at least 50% of

Power purchase agreements (PPAs)

10. See “BayWa r.e. Energy Report 2019.”

RWE Supply & Trading GmbH purchased all the power

The deal with Ineos allows the chemical company to

Hourly matching GOs

Looking to the next decade, several companies are

Corporate buyers and supporting market participants

24/7 in Norway – The next step in renewable procurement

The demonstration project will prove that:

• Hourly issuance and matching can be achieved

• Hourly GOs can work within the existing IT systems

Statkraft worked with Tibber to create a hierarchy

Vattenfall and Microsoft pilot an hourly clean energy matching platform

For this project, Vattenfall used Microsoft Azure

M-RETS supporting 24/7 carbon-free energy in North America

As part of Phase 1, M-RETS accomplished the following:

1. Developed technical tools to collect hourly

As corporate buyers increasingly consider the emissions

You might also like