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Renewable investment: maximising the value of Guarantees of Origin

June 16th, 2024
Wind Farm Austria

As more businesses enter an era of corporate consciousness, sustainability - with particular regard to energy consumption - has come centre stage.

Guarantees of Origin provide a method for businesses to procure renewable energy, guaranteed by a certification process approved by the EU. We take a deep dive into Guarantees of Origin and how you can maximise the value of this certification process. 

Corporate sustainability: identifying the benefits of GOs

Guarantees of Origin make it easier to determine your carbon footprint. Accurately monitoring where and when your renewable energy comes from down to the megawatt makes it simpler for you to map your carbon footprint and identify other areas where you can make carbon reductions. 

They can also help with avoiding penalties associated with over-production of carbon emissions. As impending carbon emissions targets approach, along with penalties for over-production, certifying your renewable energy procurement allows you to accurately forecast their carbon emissions and make moves towards reduction. 

Future investors, consumers, and shareholders who align with your sustainability values make your business more appealing to environmentally conscious customers. For more on this, visit the section further into this article called Leveraging GOs for Brand and Reputation Enhancement.

Leveraging Renewable investments for Brand and Reputation Enhancement

Guarantees of Origin can help strengthen from a brand identity perspective as potential consumers and investors or partners continue to choose to align themselves with sustainably-minded businesses:

Transparency of energy procurement of for potential consumers

The purchase power of consumers wanting to spend with carbon conscious businesses is on the increase, as consumers want to know the impact the services or products that they buy have on the environment. Guarantees of Origin provide transparency around your businesses energy procurement, meaning potential consumers can see where the energy used to power their purchase originates, actively promoting your business as a renewable energy investor to carbon conscious consumers. 

Transparency of energy procurement for potential investors or partners

As businesses navigate approaching carbon reduction targets, many have take a carbon conscious approach to their own carbon footprint and portfolio. Managing a carbon conscious portfolio involves monitoring the carbon emissions of all suppliers and potential investments to determine their impact on their own carbon footprints, which Guarantees of Origin allow them to calculate more easily. Carbon emission limits may determine future partnerships and whether potential partners or investments negatively impact their carbon footprint, resulting in them opting to connect with sustainably-minded businesses who, for example, might invest in renewable energy, shown via Guarantees of Origin.

Integrating GOs into corporate sustainability reporting

New legislation from the EU means companies need to share more information around social and environmental risks. The Corporate Sustainability Reporting Directive began with this year’s financial year start in April and is intended to give consumers, stakeholders and investors clarity over environmental factors that might influence their decision to enter business with other companies. 

Businesses must report on their greenhouse gas emissions, water use air pollution, non-renewable energy use and crucially, renewable energy use - which can be quantified through Guarantees of Origin.

Companies that must comply with Corporate Sustainability Reporting Directive currently only include larger businesses, typically with 250 employees or more and with strict turnover thresholds, and as well as listed SMEs.

Market trends: innovative approaches to enhance the value of GOs

While there has been a significant uptake in the use of Guarantees of Origin, innovation is still required to retain the value of Guarantees of Origin operating in a volatile market. Here we take a look at some of the innovative approaches taken to enhance the value of Guarantees of Origin:

Granular Guarantees of Origin

Typically, Guarantees of Origin certify renewable energy from a quantified source, usually relating to yearly compliance targets. Granular Guarantees of Origin provide a closer breakdown about the generating plant, with timestamps as close as half an hour. This allows corporate purchasers to track their renewable energy spending down to the nearest hour or half hour.

Fit-for-55 policy requirements 

A consortium of EU member states has set a target of reducing greenhouse gas emissions by 55% by 2030. The Fit-for-55 policy package will demand a projected 870TWh of annual green energy to the grid, increasing the demand for renewable energy across Europe. The policy package has the potential to generate tens of billions of Euros for the power plants that generate the renewable energy to fulfil this demand. 

Allowing energy consumers to choose their energy source 

One of the most prominent value-added factors of Guarantees of Origins is that they allow consumers to choose their energy source, with an emphasis on the ability to choose a household energy source that is renewable. This adds value for businesses such as utility providers or rental services, which can advertise the option of living in a household powered 100% by renewable energy. Carbon conscious consumers may opt to switch or select energy services based on this factor and Guarantees of Origin allow the supplier to reliably verify to the consumer. 

Case study of using GOs: Gatwick Airport

A member of the RE100, Gatwick Airport wanted to reduce its spend on renewable energy but retain its renewable energy procurement, allowing it to maintain carbon neutrality. It partnered with global energy management company World Kinect to acquire Guarantees of Origin for a new energy mix. This allowed them to:

  • Maintain carbon neutrality: Gatwick Airport wanted to retain the carbon neutrality it had achieved in 2017.

  • Transparency of contract: New contract conditions made the terms of the agreement easier to decipher, reducing transaction costs and saving £90K.

  • New energy mix: The airport switched from 100% biomass to 50% biomass and 50% wind. 

  • Cost benefits: A new renewable energy mix complete with Guarantees of Origin needed to deliver cost benefits to the airport. 

  • Operational stability: 75% of the ground operations carbon footprint is allocated to energy - while the new energy mix needed to deliver cost benefits, operations couldn’t be interrupted by introducing a new energy mix.

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