GOs - Challenges for specific energy carriers

In Germany, renewable power whose generation is subsidised by the Renewable Energy Act (Erneuerbare-Energien-Gesetz, EEG) is not eligible for guarantees of origin: The renewable property of the subsidised electricity is distributed among all payers of the EEG surcharge. Since changing the financial basis of the EEG is currently being discussed, the question arises to what extent the ban on issuing GOs should be dropped for new plants, for which GOs could then constitute a further market-based remuneration component, complementing electricity market revenues.

Should major power consumers be allowed to independently acquire and cancel GOs?
This option may be of particular interest to large commercial and industrial consumers as long-term power supply contracts from new plants (PPAs) are gaining in importance. Many such companies would like to be able to design and balance their own power supply without having to rely on a utility company. The consequences for the legally regulated electricity labelling and the underlying balancing of green electricity quantities are shown as an overview.

… especially if they are defined as consumers in regulatory terms. Power storage plants are set to become an even more important pillar of the energy supply. The balancing of inbound and outbound electricity, taking losses into account, requires a further development of the rules for electricity GOs. The same applies to grid losses, which so far cannot be assigned a green electricity property either. This can cause systematic distortions as the share of renewable power in the electricity mix increases. Storage and grid losses are also relevant for gas and heat supply systems, so consistent solution options are being investigated across sectors.

Renewable power that is consumed at the site of generation is currently not eligible for GOs. Companies in particular have an interest in integrating such power into their CO2 accounting. In the case of charging stations for e-vehicles, no GOs can be generated from directly connected generation plants (mostly PV). Proof of green electricity is often a prerequisite for eligibility for public funds.

… because the renewable power plant was switched off by the grid operator as a redispatch or feed-in management measure. This problem already concerns the parties in PPA contracts today and will increase with the new regulation on redispatch practice according to §§ 13, 13a, 14 of the German Energy Industry Act, which has come into force in October 2021.

While the EEG provided strong growth impulses for biomethane for many years, recently there has been stagnation. However, the stricter greenhouse gas reduction targets for the transport sector could provide new impetus for using biomethane as a fuel. The ambitious targets for renewable hydrogen set by the Renewable Energy Directive and the hydrogen strategy of the German government will be analysed. The new GOs for renewable gases envisaged by the Renewable Energy Directive will deeply affect the German market for green gases. The project aims to give stakeholders orientation regarding the new opportunities and challenges arising from this.

The RED offers a new system for drawing energy from the electricity grid. Synthetic liquid fuels may only qualify as renewable “provided that the electricity concerned has been supplied without taking electricity from the grid.” While a connection of the plant to the electricity grid is possible, the purchase of GOs does not suffice for verification; among other requirements, a temporal and spatial connection between the renewable electricity generation and fuel production must be proven. The GO4Industry project is investigating the challenges this poses for the verification system.