Guarantees of Origin and Disclosure Journal Focus on Austria

Transcription

1 Guarantees of Origin and Disclosure Journal Focus on Austria THE MOOSERBODENDAM, HYDROELECTRIC POWER PLANT NEAR KAPRUN HajnyStudio/Shutterstock.com

2 INTRODUCTION Throughout Europe Guarantees of Origin (GO s) are being used to disclose the origin of electricity to consumers, large and small. GO s are tradeable electronic certificates. As electrons on the powergrid are not traceable there is no option to have a physical tracing system in place. Therefore a GO system is the only viable option to give consumers greater control over the source of the energy that they procure. This paper about Guarantees of Origin and Disclosure will focus on the current GO-market in Austria. An interesting case because a mandatory system of full disclosure has been in place in Austria since Full disclosure means that the origin of every MWh of electricity has to be declared by using GO s, not only with regards to renewable energy but for all energy sources. In doing so Austria has led the way in Europe and has by now been delivering first examples of what it means for markets and prices in practice when a regulatory regime in connection to a full disclosure approach will be applied. In this report we will look at the regulatory regime, present key figures regarding the number of GO s that are being produced, used and traded and the specific market characteristics within Austria as well as some price information as far as publicly available. 1. RadioKafka/Shutterstock.com SOLARPANELS AT ZWENTENDORF

3 FULL DISCLOSURE, RESIDUAL MIX AND RENEWABLES SHARE THE AUSTRIAN ELECTRICITY ACT 2010 SETS THE FRAMEWORK FOR A SYSTEM OF ELECTRICITY DISCLOSURE, IN WHICH FULL DISCLOSURE BASED ON GO S IS INTRODUCED. THE COMPE- TENT AUTHORITY FOR AUSTRIA TO DEAL WITH ALL REGULA- TIONS REGARDING GO S AND DISCLOSURE IS E- CONTROL. Within the current Austrian situation certificates (GO s) are being issued and used for all energy sources, contrary to most European countries (with some notable exceptions like Sweden and Switzerland) where Guarantees of Origin are solely being issued and used for disclosure of renewable energy. In Austria every producer will in principle receive certificates for their total production, also when e.g. a MWh has been produced by burning hard coal. And each MWh that will be supplied to a consumer has to be connected to a GO for disclosure purposes, stating that the origin of a MWh has been either a renewable or a non-renewable energy source (including the exact energy source). GO s can in principle be freely exported and imported from and to Austria as it is fully integrated into the common European market for GO s. Albeit there is a large standing domestic demand due to the new disclosure regulations that suppliers are obliged to meet, if the price is right GO s can flow in and out of Austria during the year. One exception applies regarding export: GO s issued for renewable electricity which has received support in Austria cannot be exported (they can only be tradedwithin Austria, after they have been issued and distributed to Austrian suppliers). Regarding imports of GO s issued outside of Austria it should be noted that only GO s coming from a country in which a disclosure regime has been set up, according to the current EU regulations and thereby effectively avoiding double counting, are being accepted by the Austrian regulator for disclosure purposes. IN A NUTSHELL EU-DIRECTIVE 2009/28 Guarantees of Origin are being implemented nowadays in all but a few European countries based on an obligation to issue Guarantees of Origin to producers of renewable energy within the current EU-directive on the promotion of Renewable Energy Sources (EU2009/28). The purpose of GO s has been clearly defined as proving to final customers the share or quantity of energy from renewable sources in an energy supplier s energy mix. Based on the clear linkage between disclosure of renewable energy sources and GO s, within most European countries only GO s can nowadays be used to make such a claim. IN SHORT: THE TOTAL SUPPLY OF ELECTRICITY TO AUSTRIAN CUSTOMERS HAS TO BE DISCLOSED USING AN EQUIVALENT AMOUNT OF GO S THAT HAS BEEN PURCHASED BY AUSTRIAN SUPPLIERS AND THAT WILL BE CANCELLED ACCORDINGLY. Since January 2015 the former temporary exemptions for large consumers have expired; every MWh supplied in Austria now has to be matched with a GO. A notable exception however does apply still for the following situation: Non-renewable energy produced by facilities with a production capacity <100kw cannot receive a certificate (GO), and as such there will always be a small discrepancy between production volumes and supplied volumes of Austrian origin. In principle this approach relieves Austria from having to deal with any usage of a residual mix (using an average mix to disclose supply that has not been substantiated by GO s). In practice the latest available figures for Austria does substantiate that the system has reached almost 100% coverage of the supply by GO s, however as current regulations allow suppliers to choose between calendar or financial year when disclosing fully based on GO s there was some overlap with the obligation to implement full disclosure and the end of fiscal years. (For more details on proportions please see the paragraph Market characteristics and prices.) 2.

4 MANDATORY DISCLOSURE RULES AND REGULATIONS The information that should be part of all disclosure statements has been clearly set and regulations state that any voluntarily added additional information regarding the supplied energy and/or its environmental consequences should not be mixed with the obligatory set of information items to avoid any confusing for consumers and to enhance comparability. Disclosure of energy sources has to be communicated to customers using a table, splitting energy supplied into the different sources (in percentages) and additionally directly connected to a consumers bill using a diagram. Additionally to the current European regulations the information to customers has to include also a breakdown into percentages of the energy that has been imported, detailing from which other European countries exactly. Also, additionally to the usual European disclosure requirements, there is an option for suppliers to voluntarily disclose towards their customers: Which percentage of the GO purchased has been purchased in connection with the physical energy produced by the same producer, Whether or not the supplier deals exclusively with producers and or traders that deal exclusively with renewable energy production. BELOW YOU SEE AN EXAMPLE OF THE OBLIGATORY DIAGRAM FOR DISCLOSING ENERGY TO CONSUMERS. STROMKENNZEICHNUNG GEM 78 ABS. 1 UND 2 ELWOG 2010 UND STROMKENNZEICHNUNGS-VO 2011 FÜR DEN ZEITRAUM BIS UMWELTAUSWIRKUNGEN CO2-EMISSIONEN RADIOAKTIVER ABFALL ENERGIETRÄGER WASSERKRAFT BIOMASSE BIOGAS SONSTIGE ÖKOENERGIE WINDENERGIE SONNENENERGIE ERDGAS KOHLE 108,78 G/KWH 0,00 G/KWH VERSORGERMIX 63% 5% 2% O,9% 8% 1,5% 14,5% 5,1% DIE EINGESETZEN NACHWEISE STAMMEN ZU 60% AUS ÖSTERREICH UND ZU 40% AUS SLOWENIEN. FREIWILLIGE ZUSATZANGABEN: 100% DER FÜR DIE STROMKENNZEICHNUNG VERWENDETEN HERKUNFTSNACHWEISE WURDEN GEMEINSAM MIT DER ELEKTRISCHEN ENERGIE ENWORBEN 3. IN A NUTSHELL EU-DIRECTIVE 2012/72 Electricity Disclosure in Europe is based on an obligation to implement such procedures as has been laid down within the current EU-directive concerning common rules for the internal energy market (EU 2009/72). Within article 3 (subpara.9) of this Directive it is stated (in short) that energy suppliers shall [make] available to final customers ( ) the contribution of each energy source to the overall fuel mix of the supplier over the preceding year in a comprehensible and ( ) clearly comparable manner. In most countries statements on renewable sources can only be made through cancelling a corresponding amount of GO s. Regarding other energy sources, whether it s nuclear or fossil sources, the current European Framework does not specify any other obligations. Therefore we see many different approaches throughout Europe to deal with this issue nowadays. This non-alignment leads to non-comparable outcomes regarding non renewable energy sources and also to differing conditions for market participants that operate cross border

5 MARKET CHARACTERISTICS AND PRICES Like in other countries most of the trading in GO s takes place directly between buyer and seller. It has to be noted however that in Austria only suppliers can cancel GOs for customers (no matter which size). Therefore large power intensive industry, that is able to trade e.g. directly on the wholesale market for physical electricity always needs a supplier to cancel the GOs for them at the E-Control registry. The existing marketplaces, including EEX (which offers an Alpine Hydro product as well as a Nordic Hydro product) and EXAA (which offers a product that links purchases of GO s to the purchase of a physical amount of electricity), seem to cater for a small part of the total market volume only. Prices are generally prone to differ according to delivery date and expiry date of the GO s involved. Albeit a large part of the (renewable) energy GO s used for disclosure in Austria have been homemade there is still a rather significant import of GO s from other European countries, most notably from Norway. In 2016 (according to AIB figures) about 22mln GO s have been imported into Austria (please note that the export figure also amounts to 13,5mln GO s, effectively leading to a nett import of 8,5mln GO s). Therefore it can be stated that Austrian prices are bound into the European Market place. Within Austrian disclosure regulations a supplier can choose to structure his disclosure along the lines of the calendar year or alternatively along the lines of the financial year. (However only a minor part of the suppliers chose to opt for the latter.) As this leads to different cut-off dates this might however lead to minor deviations of the market price. Another indication that the Austrian market is well connected to the European Market and does not show a significantly different pricing structure is the open criticism of the Austrian association for small scale hydropower, claiming that the prices for imported GO s (mostly large scale hydropower) are (quote) low, to the extent that the revenues of selling GO s (for prices that are quoted to be between 15 and 25 Eurocents per MWh) are not nearly enough to earn them a profitable premium through GO s. Therefore this organisation calls for allowing only domestically sourced GO s to be used for electricity disclosure. In some countries nowadays different prices are also being paid for certain niche products, e.g. for domestically produced wind power or for GO s out of newly built (so-called additional ) production sites. Looking at the overall marketshare of (domestic as well as imported) hydro power in Austria there is no evidence that currently there is already a well-established market in Austria for these types of products. IN A NUTSHELL GO S? HOW DOES THAT WORK? The purpose of GO s is to effectively avoid double counting of (renewable) electricity as to properly inform consumers about the origin of the electricity they consumed. For that reason on request of a producer one GO is being issued by official (usually government appointed) bodies, using a controlled process, for every MWh of (renewable) energy that is being produced. These certificates can be (internationally) traded between market participants and in the end have to be cancelled by a supplier that wants to make a green claim towards his customers. As there are never more GO s than the amount of MWh that has been actually produced using a specific fuel source and as GO s can only be used (cancelled) once double selling or double counting can be banned. Clear rules regarding the processes and regarding the information that is contained within a GO have been laid down within the so-called EECS Standard, governed by the official GO issuing bodies within Europe working together in the Association of Issuing Bodies (AIB). Albeit GO s have been introduced originally to avoid double counting of renewable energy, they can in theory be issued for every possible energy source using the exact same process, thereby diminishing the amount of statistical uncertainty and allowing for a trustworthy disclosure 4.

6 DISCLOSURE IN A NUTSHELL DISCLOSURE? HOW DOES THAT WORK? You have read about how GO s work and what the current European regulations state? When it comes to disclosing renewable energy in most countries the situation is relatively straightforward: a consumer can claim he has purchased and a supplier can claim he has sold renewable energy only when an according amount of GO s has been cancelled by him for that specific customer. This information flows into the disclosure statements that any supplier has to make available on a regular basis to its customers. Regular audits are being performed by energy market regulators to check whether every market participant has played by the rules. But how does this work for other energy sources, in the absence of GO s? That s another cup of tea One can say in most cases one reverts to a best guess approach. What happens in practice (in short) is that one takes the average national production figures, correcting them for imports and exports of energy and GO s and taking also into account the average national production figures of all the other countries involved in your country s international electricity trading. In the end of that process one ends up with some figures including the corrected average for (non)renewable energy sources. Now frankly this is being dealt with in the best possible way, doing some hard accounting to get to the so-called European residual mix as to allow for the best possible approximation in the absence of clear evidence for the untracked electricity, but still: it s an average figure with some (difficult to explain) corrections using other average figures For that reason the Association of Issuing Bodies (the European association of competent authorities for GO s) supports the issuance and usage of GO s for all energy sources, as to grant consumers an easier to understand and comparable disclosure statement and to give consumers greater control over the source of energy that they procure. LuboslavTiles/Shutterstock.com WINDTURBINES AND VINEYARDS NEARBY THE VILLAGE OF BERG

7 FACTSHEET AVERAGE AUSTRIAN SUPPLIER MIX 2015 (general figures): AUSTRIAN GO STATISTICS MWH (MILLIONS) KNOWN RENEWABLE ENERGY SOURCES 86,73% KNOWN FOSSIL ENERGY SOURCES 12,89% KNOWN PRIMARY ENERGY SOURCES (OTHERS) 0,38% KNOWN NUCLEAR ENERGY 0,00% Source: E-Control Editorial Note: these percentages relate to the energy supplied in Austria disclosed on the basis of cancelled domestic and imported GO s. AUSTRIA CANCELLED GO IN AUSTRIA PER COUNTRY 2015 AUSTRIA DENMARK GERMANY NETHERLANDS NORWAY SLOVENIA SWEDEN SWITZERLAND FINLAND FRANCE ITALY SUM AUSTRIAN ELECTRICITY DISCLOSURE MIX, DETAILED APPROXIMATION 2015 DISCLOSURE STATISTIC % 65.24% 0.44% 0.21% 1.05% 23.98% 0.66% 2.57% 0.34% 2.26% 3.12% 0.12% % JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017 ISSUING 2017 CANCELLATION 2017 IMPORTS 2017 EXPORTS 2016 ISSUING 2016 CANCELLATION 2016 IMPORTS 2016 EXPORTS BIOGAS NATURAL GAS COAL NUCLEAR POWER SOLAR POWER OTHER HYDRO POWER WIND POWER GEOTHERMAL POWER LANDFILL GAS AND GAS FROM PURIFICATION PLANTS 0,95% 9,46% 3,42% 0,00% 0,95% 0,38% 72,62% 8,32% 0,95% 0,01% 6. Source: Association of Issuing Bodies, June 2017 MINERAL OIL/MINERAL OIL PRODUCTS 0,03%

8 MORE READING Elektrizitätswirtschafts- und -organisations Gesetz (ElWOG) Ökostromgesetz Verordnung der E-Control über die Regelungen zur Stromkennzeichnung und zur Ausweisung der Herkunft nach Primärenergieträgern (Stromkennzeichnungsverordnung): Disclosure report 2016 Summary in English (E-control) CREDITS Guarantees of Origin and Disclosure Journal No.1. Austria / June 2017 This first issue of Guarantee of Origin and Disclosure Journal has been commissioned by: EnergiNorge Publisher and proprietor Communicating Sustainability Dorpsplein ZL Weurt The Netherlands Tel: +31 (0) info@communicating-sustainability.eu Editorial responsibility: Michael Lenzen Communicating Sustainability Twitter: Graphic design: Anblick Imagobureau Statistical data: E-Control and Association of Issuing Bodies Text: Communicating Sustainability Communicating Sustainability 2017 Images: Used under license of Shutterstock.com This publication is copyright protected. All rights reserved, including those to translation, performance, use of charts and tables, broadcasting, microfilming or reproduction by other means, or electronic storage, and commercial exploitation, including extracts. Misprints and errors excepted. Editorial deadline: june 26th 2017