The Basics of GOs for Power Producers
Guarantees of Origin can provide an extra revenue stream for power producers, but does this represent a viable opportunity for all power producers? We take a deep dive into the basics of Guarantees of Origin for power producers and the GO issuance process.
What is the purpose of a Guarantee of Origin?
The main purpose of a Guarantee of Origin is transparency for the energy buyer. It proves that the energy generated is 100% from a renewable source and tracks the source back to the specific renewable power plant from which it was generated.
How are Guarantees of Origin measured?
One Guarantee of Origin is equivalent to MWh of energy, and certificates can be issued either with or without the energy generated.
Who issues Guarantees of Origin?
The Gas and Electricity Markets Authority (GEMA) administers Guarantees of Origin on behalf of the government. The Office of Gas and Electricity Markets (Ofgem) undertakes the administrative element of Guarantee of Origin Issuance. Certificates are issued once these two organisations have approved accreditation.
Operational Considerations
Power producers wishing to enter the market for trading and monetization of GOs have to meet certain regulatory requirements:
Who can apply for the scheme
Renewable energy producers in Great Britain and Northern Ireland are able to apply for the scheme, with no limit on size. Power plants must generate renewable energy and be regarded as ‘renewable non-fossil energy sources’. Sources accepted include:
Maximizing Revenue through GOs
If you meet regulatory requirements and are looking to apply for the scheme, it’s worth considering how you might make Guarantees of Origin work for your business. Here we take a look at some key factors to bear in mind to when entering a Guarantee of Origin-led scheme.
Advocate for reducing carbon footprint through Guarantees of Origin
As more businesses become more aware of their corporate conscience, many are focussing on accurately calculated carbon footprints. Energy producers can benefit from this by advocating for reducing carbon footprints via Guarantees of Origin, allowing businesses to accurately track their renewable intake by providing a certified source.
Make sure you keep regulators updated throughout the lifecyle of your project
It’s vital that national regulators are kept updated of any changes to generation alongside mandatory data supply deadlines. If you fail to keep regulators supplied with the required data, they can apply to withdraw accreditation of your Guarantees of Origin - should they no longer be satisfied that generating information is accurate. Not only can this have a direct financial implication for your project, it can also have an indirect financial impact due to trust and reputational damage. Should accreditation of a Guarantee of Origin be withdrawn after the acquisition, an energy buyer may not decide to acquire Guarantees of Origin from that specific energy producer's supply in the future.
Partnering with a utility supplier that promotes green energy credentials
The purchasing power of consumers continues to rise as consumers express a desire to supply their homes with renewable energy. To appeal to these types of consumers, utility providers may promote what’s known as a ‘green tariff’. ‘Green tariffs’ allow utility providers to promote to consumers the verification of their energy from 100% renewable sources, verified through Guarantees of Origin.
Looking Ahead: The Role of Power Producers in Shaping the GO Market
Creating trust and transparency in the GO market
Traditionally, renewable electricity procurement was based mostly on trust. Conversely, Guarantees of Origin allow energy buyers to receive a certified guarantee that the energy they are buying is 100% renewable. This transparency can be passed on through the supply chain, informing the energy buyer’s investors, consumers, and stakeholders.
Appealing to Carbon Conscious Consumers
Recent consumer uptake in renewable energy shows a marked move towards sustainable energy consumption. Increased demand from household consumers to spend more on renewable energy versus traditional fossil fuels shows consumers’ desire to actively use energy generated from green sources.
Generating Extra Income for Legacy Renewable Plants
Legacy Renewable plants may have historically received support from governmental schemes, for example, European wind farm subsidy schemes, but as they reach the end of these support schemes, alternative revenue streams might be desirable. Guarantees of Origin provide this alternative revenue scheme alongside general wholesale electricity for older renewable plants.
