Renewables

EPEX SPOT to launch first pan-European guarantees of origin market

EPEX SPOT to launch first pan-European guarantees of origin market

Photo: nattanat23 from Pixabay

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December 1, 2021

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Published:

December 1, 2021

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The European Power Exchange (EPEX SPOT), European Energy Exchange (EEX) and European Commodity Clearing (ECC) have announced the launch of a pan-European market for guarantees of origin (GOs) as part of their efforts to support the energy transition with market-based instruments. All three companies are part of the EEX Group.

The planned guarantees of origin spot auctions will be held once a month and operated by EPEX SPOT, under the exchange’s membership and market rules, EEX Group said.

Clearing and settlement will be conducted by clearing house ECC, while EEX will ensure delivery through its French GO registry.

The launch of the new trading products is envisaged within the second quarter of 2022, subject to successful testing and market readiness, EEX said.

The plan is to held a monthly multilateral auction for GOs from renewable production in selected countries

According to the EEX, the market design of the new pan-European spot auction foresees a monthly multilateral auction for GOs from renewable production in selected countries that are part of the European Energy Certificate System (EECS), as set by the Association of Issuing Bodies (AIB).

“Buyers and sellers will be able to access both specific and generic GOs within one pay-as-clear auction, optimizing market liquidity. Several levels of specificity within three dimensions will be made available: country, technology, and subsidy regime. Indices will be published following each auction,” EEX said.

Guarantees of origin are a tracking instrument that allows the confirmation of the origin of electricity and determines the quantity stemming from renewable production within the total of electricity that flows through the grid. It makes them an indispensable tool to promote the production and consumption of green electricity by ensuring its traceability and enabling investments into renewables.

Efficient GO market will incentivize the production and use of green energy

“Through this launch, EEX Group is not only responding to a market’s need for a stronger and transparent price signal, but it also falls within our efforts to fight climate change through a transition to renewable energy,” said Tobias Paulun, Chief Strategy Officer of EEX.

According to Ralph Danielski, Chief Executive Officer of EPEX SPOT, an efficient GO market will incentivize the production and use of green energy.

“ECC will support the new trading products with its secure and reliable clearing infrastructure and its expertise in settling guarantees of origin,” added Götz Dittrich, Chief Operating Officer of ECC.

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