Energy origin guarantees – how do they support the development of green energy?

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Energy Origin Guarantees – What Are They and How Do They Work?

The fact that energy generated comes from renewable sources may be important for both the producer and the consumer for many reasons. Unfortunately, energy itself cannot be labeled, so there arose a need to certify its source. Energy origin guarantees serve as certification for the end consumer that a certain amount of energy fed into the distribution or transmission network was generated from renewable energy sources or as a result of highly efficient cogeneration.

Energy origin guarantees were introduced into European Union law by the RED II Directive. In Poland, this matter is regulated by two acts:

• The Act on Renewable Energy Sources for energy produced through RES (Renewable Energy Sources):
  • electricity
  • biomethane
  • heat or cold
  • renewable hydrogen
  • “ordinary” biogas and agricultural biogas
• The Act on Promoting Electricity from Highly Efficient Combined Heat and Power Generation – for CHP (Combined Heat and Power).

The energy origin guarantee is an electronic record in a special register, the Energy Origin Guarantee Register (RGP), which is managed in Poland by the Commodity Exchange. The documents reflecting the origin guarantee are created when the energy is generated or during the CHP process. They lose their validity when the energy production ceases, or when the certificate is redeemed by the final consumer or after 12 months from issuance.

Polish Energy Origin Guarantees – What Are Their Goals?

The main goal of energy origin guarantees is to give both individual and corporate consumers the choice of which source they will derive energy from. A market participant who pays attention to energy origin guarantees is not only seen as more aware and responsible but also as one who is in line with non-financial ESG (Environmental, Social, Governance) reporting principles. Energy origin guarantees are a very important element of Power Purchase Agreements (PPA), as more and more entrepreneurs want to ensure they are purchasing energy from an entity whose activities do not harm the environment.

The purpose of energy origin guarantees is, on one hand, to encourage producers (energy producers) to develop infrastructure and produce as much green energy as possible. On the other hand, they aim to encourage consumers to choose energy that is environmentally neutral in its production.

Energy Origin Guarantees – How Do They Support Market Development?

Energy origin guarantees support the energy market on a European scale because they are recognized in all member states, as well as in Switzerland and EFTA countries, on a reciprocal basis. This is particularly important for entrepreneurs who operate transnational businesses. In case of doubts regarding the authenticity of a certificate and refusal to recognize it, the entitled entity has the right to file a complaint with the Court of Competition and Consumer Protection.

In light of the direction of EU legislative development, member states should strive for as many energy origin guarantees to circulate as possible. This means that an increasing portion of the total energy supply comes from RES, which is economically desirable, but also crucial from an environmental protection perspective.

How to Obtain an Energy Origin Guarantee in Poland?

The process of applying for an energy origin guarantee is not overly complicated, but it can be time-consuming. Let's take a look at how it works step by step.

Energy origin guarantees are issued upon request by the president of the Energy Regulatory Office (URE) to the producer. The request must be submitted to the operator in the area where the installation is connected. You can find the application form on the URE website. The operator then forwards the application to the URE, which has 30 days to verify it. If there are no objections, the energy origin guarantee is issued within 30 days, and the CHP guarantee is issued within 60 days. After changes to regulations starting in 2024, the verification of produced energy and the content of the application can only be carried out by an accredited entity holding a certificate from the Polish Accreditation Center.

Transferring the energy origin guarantee to the final consumer obliges the producer or another entity with a register account to notify the President of the URE and the Commodity Exchange. This notification requires the Commodity Exchange to update the origin guarantee register. Secondly, it leads to the automatic expiration of the energy origin guarantee.

It should be noted that energy origin guarantees do not confer any property rights, although they can be transferred. They should not be confused with certificates of origin, i.e., green certificates. Unlike origin guarantees, these colored certificates can be traded on the stock exchange. The transfer of an energy origin guarantee and the trading of green certificates occur independently.

Energy Origin Guarantees – Benefits for Consumers and Producers

The benefits of energy origin guarantees can be viewed from the perspective of several market participants.

First, the state creates an incentive to invest in RES outside the system, which brings it closer to achieving long-term energy policy goals. It also gains access to consolidated information about entities producing energy from RES and transaction volumes. Energy producers can count on additional revenue, while suppliers can expand their portfolio with offerings better suited to the needs of different customer groups.

By choosing suppliers who hold energy origin guarantees, entrepreneurs can have a real impact on reducing their carbon footprint and CO2 emissions. They are also taking steps towards achieving the environmental pillar of ESG reporting, thus ensuring compliance in this regard. Meanwhile, consumers can make more conscious choices when selecting an energy supplier, contributing to environmental protection.

From an environmental protection perspective, these benefits are invaluable. The more energy is produced from RES and less from conventional sources, the easier it is to protect biodiversity and safeguard nature from the negative impacts of energy production from non-renewable resources.

Energy origin guarantees can also be an effective marketing tool and legal safeguard. By purchasing one, a company confirms its eco-friendly image and commitment to the environment. More and more consumers consciously choose products or services made with energy derived from RES. If you want to strengthen your business in a subtle yet effective way, purchasing an energy origin guarantee is a good step. Contact us, and we’ll help you design a green path for your business.