Guarantees of origin, the present and future of renewable energy
25 January 2021 | Trading
The European Union has established the Green Deal as the roadmap to building a sustainable economy for the Union through transformation and the adoption of strategies to mitigate and reduce emissions. One of the main objectives is to achieve carbon neutrality by 2050 and among the series of mechanisms that Member States must implement to achieve these objectives they recommend the Guarantees of Origin as a support system. It is therefore a mechanism that empowers European countries and citizens to achieve a clean and sustainable electricity supply with all the advantages that the EU itself recognises for renewables.
Furthermore, in line with the continued growth in demand, the need for industries to achieve carbon neutrality and the pressure from investors, shareholders and other interest groups, which are increasingly demanding more information and traceability about the origin of the energy consumed by companies, has led to a booming market within Europe.
According to the "Quarterly Report of the Market for Guarantees of Origin in Europe" elaborated by Factor Ideas for change, the accumulated expeditions of the first and second quarter of the year 2020 confirm an increase of the market of a 23% compared to the previous year, with a growth of the installed renewable capacity, where Norway is positioned, once again, as the country with more guarantees issued, followed by Spain, The Netherlands and France, among others.
The Spanish market continues to advance steadily, according to data from the latest "Annual Report of the Market for Guarantees of Origin in Spain", also developed by Factor Ideas for change, showing a notable increase in the number of marketers supplying 100% renewable energy, which has grown by 73% since 2017. Thus, there is a growing number of end customers who demand and value the consumption of green energy.
"In Factor Trading we believe that Guarantees of Origin are an effective and "low cost" asset for the reduction of carbon emissions. Our extensive experience with producers, traders and industrialists, allows us to be the largest national agent in the European market, with a market share of up to 25% in some segments", explains Iñigo Laguna, Key Account Manager and expert in Guarantees of Origin.
Guarantees of Origin have demonstrated to provide traceability with respect to the origin of the energy consumed, allowing industries, companies and final customers to declare that their consumption complies with specific attributes, mainly associated with characteristics of GHG emission neutrality and sustainability. It has also become a more efficient solution for certifying the renewable origin compared to other alternatives such as corporate PPAs or self-consumption of renewable energy on site, limited by the available capacity in the area and the profitability compared to the price of energy acquired by a network.
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Factor Ideas for change
Factor has more than 15 years of experience offering technical consulting services in the areas of climate change adaptation and mitigation, carbon footprint analysis, sustainability, circular economy, renewable energy and carbon markets, amongst other things, undertaken on behalf of governments and international organizations, as well as for over 400 companies, with more than 1,100 projects undertaken within 40+ countries.