Record high demand for guarantees of origin in 2020 in EU

Despite lower power demand due to the COVID-19 pandemic, the demand for guarantees of origin (GO) in Europe rose by 8% last year to a record high.

A guarantee of origin is an electronic document verifying that energy is produced from renewable sources. Guarantees are issued to producers of energy from renewable sources, and they are bought by suppliers or large energy consumers that want to show that they are selling or consuming green energy.

The cancellation of renewable guarantees in the Association of Issuing Bodies (AIB) hub increased by 8% in 2020 to an all-time high of 735.1 TWh, Argus Media reported. It compares to 332.6 TWh for 2015 and 182.4 TWh from 2010.

In November last year, Serbia became the only country outside the EU and EEA to connect with the AIB Hub, enabling imports and exports of the guarantees.

Spain and Germany are the largest users of guarantees

In 2020 there were 761.8 TWh in issued renewable guarantees, after 649.8 TWh in 2019. The result was 367.9 TWh in 2015 and 25.5 TWh in 2010.

For the second year in a row, Spain was the largest user of guarantees, with 175.7TWh, an increase of 15% year on year. Germany holds second place on the list with 110.5 TWh, up by 6% on an annual basis, the article adds.

Both figures jumped despite a decrease in power demand by a few percent.

Estonia and Czech republic posted the highest increase

Estonia registered the sharpest year-on-year increase, canceling 1.54 TWh or 414% more than in 2019, followed by the Czech Republic, where total guarantee demand increased by 129% to 1.4 TWh.

Of note, Spain, Germany, and France are countries in which guarantees are not given to renewable electricity producers if their power plants receive public financial support. The guarantees are retained by the European Union member state to avoid any kind of double compensation to renewable producers.

“The EU Renewables Directive removes the risk of double compensation with guarantees. Not giving them to wind farms that have public financial support is a barrier to power purchase agreements (PPAs). And the directive requires national governments to remove barriers to PPAs,” WindEurope CEO Giles Dickson said.

Guarantees prices decreased in 2020

According to Argus’s assessments, Nordic hydro guarantees for 2020 fell from EUR 0.17/MWh, registered at the start of last year, to just under EUR 0.07/MWh at year-end, while European wind guarantees fell to EUR 0.09/MWh from EUR 0.26/MWh.

European solar guarantees ended 2020 at EUR 0.10/MWh, while European biomass guarantees were the lowest-priced product for most of the year, Argus Media reported.