Many electricity providers today promise 100% renewable energy, especially in Germany. The companies also claim to operate in a climate-neutral manner and use clean electricity. But what is really behind it? (Golem, November 29, 2023)
Electricity cannot be directly identified once it is fed into the grid. It is impossible to allocate electricity from a specific source to subscribers on the same network. Green electricity customers typically pay for green electricity that will be fed into the grid elsewhere. However, there is another way electricity providers and businesses can make their electricity “green”: using guarantees of origin for renewable energy.
These guarantees of origin are provided in the EU Renewable Energy Directive. They separate the sale of physical electricity from the “characteristics” of the electricity, i.e. how it is generated. Example: The German electricity supplier uses a standard mix of electricity. The foreign supplier only operates hydropower plants and sells certificates of origin to the German supplier. This means they can claim to only provide green electricity.
In this system, green electricity is counted twice: by the companies that buy it and by the companies that buy certificates of origin. This leads to double counting, which occurs on a large scale.
Iceland: The mysterious trade in virtual green electricity and its implications
Iceland, although not a member of the European Union, has implemented the EU Renewable Energy Directive and participates in the Electricity Guarantees Scheme. Icelandic energy producers can almost sell green electricity abroad, even though the country has a self-sufficient electricity grid and no coal or nuclear power plants.
However, electricity customers in Iceland see coal and nuclear in their electricity bills, even though they already get hydropower. State-owned electricity producer Landsvirkjun earns about 7 million euros a year from selling guarantees of origin.
Iceland is a leader in renewable energy, with more than 99 percent hydroelectric and geothermal power. The country has attracted energy-intensive industries, including aluminum smelters. Despite a decline in electricity production of about 19 terawatt-hours, Iceland issues 14 terawatt-hours of certificates of origin, which are used elsewhere to make electricity nearly green. All three aluminum producers in Iceland advertise the use of 100% renewable energy, although they do not obtain any certificates of origin. The largest electricity supplier, Landsvirkjun, offers certificates of origin that aluminum companies do not buy.
The Association of Issuing Bodies (AIB), responsible for guarantees of origin in participating countries, is aware of the problem but considers it legal. The situation has improved, but some small consumers can now provide proof of origin.
It is difficult to determine the extent of the problem because the system is not transparent. The Asian Investment Bank only publishes statistical data on electricity imports and exports. The companies purchasing certificates of origin remain anonymous. In general, it can be seen that the guarantees of origin system leads to green electricity being counted several times without taking the physical reality of electricity distribution into account. There is a lack of clear legal regulations.
Last updated on December 20, 2023 at 11:32 pm. We would like to point out that the prices shown here may have changed in the meantime. All statements are made without warranty.
Last updated on December 20, 2023 at 11:32 pm. We would like to point out that the prices shown here may have changed in the meantime. All statements are made without warranty.
Last updated on December 20, 2023 at 11:32 pm. We would like to point out that the prices shown here may have changed in the meantime. All statements are made without warranty.
