A certificate may be in any form, including electronic, and lists attributes such as method, quality, compliance, and tracking. Energy certificates issued under national legislation typically provide evidence of compliance. Electricity producers, suppliers, or consumers use these certificates when required to use a specific type of energy or to qualify for financial support. Qualifying plants often produce electricity from renewable sources.
An Energy Attribute Certificate is a generic form for energy certificates used in electricity production and consumtion. Some specific examples:
- Guarantee of Origin (GO)
- EECS Certificate
- International Renewable Energy Certificate (I-REC Standard)
- Renewable Energy Certificate (REC)
- Renewable Energy Credit
- Tradable Instruments for Global Renewables (TIGR)
- Tradable Renewable Certificate (TRC)
- Tradable Renewable Energy Certificate (TREC)
- Green Tags
- Levy Exemption Certificate (LEC), certificates used in the U.K. to provide energy suppliers with evidence needed to demonstrate to HMRC that electricity supplied to U.K. business customers is exempt from the Climate Change Levy.
- Renewable Obligation (RO) and Renewable Obligation Certificate. The RO is a scheme introduced by OFGEM (UK Office of Gas and Electricity Markets) as the main support mechanism for large scale renewable electricity projects. It places an obligation on UK electricity suppliers to increase the proportion of the electricity they supply from renewable sources. For an energy supplier to meet its Renewable Obligation it must purchase Renewable Obligation Certificates (ROCs). ROCs can be acquired from renewable generators, or from the ROCs market. On the producer’s side, each generator is assigned a certain number of ROCs each period based on the technology used and the amount of electricity it produces.
The European Union created internationally transferable guarantees of origin: It provides proof to consumers of the source of their electricity, as required by Internal Market in Electricity Directive. Electricity suppliers use these guarantees when calculating the proportions of energy sources (fossil fuel, nuclear, etc.) in their supplied energy. Governments use them to calculate the Residual Mix - the blend of electricity sources produced in a country, adjusted for imports and exports.
Directive 2009/28/EC and Directive 2012/27/EC require a guarantee of origin for Renewable Energy and highly-efficient co-generation. The Association of Issuing Bodies uses the European Energy Certificate System to facilitate issuing, using, and transferring of these certificates.
Issues and Challenges
- When energy certificates are tradeable and unbundled from the actual electricity delivery it is possible for an entity to acquire enough certificates to account for all of their purchased electricity. This enables eliminating reported Scope 2 GHG Emissions on sustainability disclosures.
- Directive 2009/72/EC