Guarantees of origin give control and choice to electricity consumers
Guarantees of origin give control and choice to electricity consumers, writes Dirk Van Evercooren.
Dirk Van Evercooren | Photo credit: AIB
Do you know that over 15 million consumers already have contracts guaranteeing they get renewable electricity? Such contracts are reliable and transparent, as they are backed by Guarantees of Origin (GO), the European instrument used to track electricity from production to consumption.
A fast-growing number of corporates such as Ikea, Google, BMW, BT and Colruyt are buying green electricity in order to become 'zero carbon emitters'. They are sending a clear signal that we need more investment in renewable electricity, if we want to encourage the transition towards a low carbon, sustainable European energy market.
Without GOs, households and businesses would have no say in where their electricity comes from, and would have to accept their supplier's electricity mix.
Nor would it be possible to operate an efficient and reliable market in renewable electricity. Electricity suppliers could claim they are environmentally friendly without verification. But GOs are not only for consumers.
Without them, it would be harder for renewable electricity producers to demonstrate their unique selling proposition and compete with fossil and nuclear production. Only electricity suppliers with renewable production capacity would be able to offer green electricity contracts.
Without GOs, information on energy bills about the source of electricity would be unreliable. Consumers wouldn't know whether their electricity came from fossil, nuclear or renewable sources, preventing them from making an informed choice.
GOs give control and choice to corporate and household electricity consumers. Information empowers consumers to choose their preferred contract: Let's not patronise consumers by saying what they should or shouldn't buy, but they should be held accountable for the consequences of their choice.
Our vision is to make GOs the unique tracking instrument for all sources of electricity, not just renewable electricity - we call this "full disclosure".
While the European Commission's Clean Energy Package does not fully deliver this ambitious vision, it moves things in the right direction. But there are some details that need to be corrected. GOs have the potential to empower consumers far more than is currently the case. They are a key component in Europe's internal energy market, and are needed for consumers to be put in the driver's seat to achieve global leadership in renewables.
However, several proposals raise concerns. In particular, the Renewable Energy Directive requires the cost of support to be offset by income from the sale of supported GOs, by means of compulsory auctioning of GOs for supported renewable energy. We believe that member states should be free to choose how they achieve this, and should not be compelled to implement auctioning.
AIB's detailed analysis of what is good and what needs to be made better is downloadable from our website at www.aib-net.org, along with our proposals to amend the relevant elements in the Clean Energy Package.
Be sure to register for and attend our EUSEW high level policy event, 'Involving consumers in the energy transition' on 22 June.
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