1. Guarantees of Origin (GOs) are renewable energy tracking certificates. They can be used to identify the type of generation that was used for a certain Megawatthour of electricity. Renewable energy, such as wind, solar, hydro, geothermal or biomass is mostly demanded as a preferred source over conventional production technologies. When 1 MegaWatthour of green electricity is produced, that producer receives 1 certificate. The certificate describes the attributes: the technology of production, which power plant the electricity comes from and other specifications.

2. 1 GO is useable within 12 months. Within that validity time, it can be bought by electricity suppliers or any balancing responsible corporation who want to source their electricity from renewable energy sources.

3. GOs have been created by the European Union and implemented in most european countries as the way to track how a Megawatthour of electricity was produced. 1 GO correspond to 1 MWh. Once consumed, it is “cancelled”, in order to avoid double utilisation of the GO.

4. The GO system works as an accounting system where what is produced is accounted and what is consumed too. In between, the GOs can be exchanged between any company owning an account at the Registry in one of the Member countries.

5. GOs can be exported within the European Economic Area. The Association of Issuing Bodies (AIB) connects all regional and national Registries and keeps the accounting well measured, just like SWIFT for money, which connects the banks to facilitate transfers.

Depending on the registry and the software it implemented, a Guarantee of Origin (GO) will typically contain the following information:

• Volume
• Production Period
• Expiry day
• Type of production
• Country of production
• Renewable or not
• Cogeneration or not
• Power station capacity
• Type of support
• Number of the first GO
• Date of the GO creation

1. Producers: Every company which owns a power generation unit can register at the local Regulator and receive Guarantees of Origin on their account at the Registry. Every MWh produced can claim 1 GO carrying its generation details. It can be used/cancelled by the producer for its own use and claim the attributes, or it can be sold to another company. Producers receive GOs as a tracker of their electricity uploaded on the grid. Producers can:

   1. Sell the GOs to suppliers of electricity who want to acquire a certain type of generation;

   2. Sell the GOs to an intermediate on the market;

   3. Consume/Cancel the GO and claim the attributes for their own portfolio. Consuming a GO is actually named “Cancel” to emphasise that the same GO is not used twice for claiming sourcing attributes. Remember: GOs are similar to an accounting system (see: question 1.d.).

2. Suppliers: companies which procure electricity to businesses and households. The electricity in the portfolio of the supplier can be accompanied by Guarantees of Origin as documentation of the production specifications. We call this information “the attributes” of the supplied electricity.

3. Any other business which owns an account at a Registry. They typically have a Balancing Responsibility Agreement with a power grid or are classified as intermediate. They can consume GOs to support the development of green electricity as well as track that their used electricity is from their preferred source.

Anyone can demand from his supplier to deliver him green energy or switch to a competitor who can. The GOs then serve as documentation of the production specification.

The price of GOs is market-based, with supply and demand for GOs determining it at any given point in time. The total volume of GOs consumed in 2018 was 540 TeraWatthour. This is the equivalent of electricity usage in 150 million households (assuming average consumption is 3500 KWh per household). 540.000.000 GOs have been consumed to identify the origin of electricity. A total of 650 TWh of GOs have been issued in 2018, which is the total of the supply side. Since GOs are a voluntary instrument with few obligations about their use, it is mostly driven by demand. Buyers of GOs have the possibility to choose which GOs to use and this possibility is reflected in the price. Most common are Nordic hydro GOs. For instance, in 2019, the price lied around 0.35 EUR per GO from hydro sources. More specific and/or more rare products can be priced higher, in some cases up to 7.00 EUR per GO (wind produced in the Netherlands). Consumers are free to choose which GOs to obtain since the European Electricity Grid is interconnected. By using GOs to source electricity consumption, one is supporting the continuous development of renewable electricity.

GOs allow to track the origin of electricity and gives a choice to consumers and suppliers to determine where their electricity is coming from. It creates therefore additional value for electricity. By purchasing GOs, the supplier or consumer is able to provide additional information to their authorities on where their electricity is coming from.

Customers in turn can hold their supplier accountable for supplying green electricity. After all, GOs are a tracking and counting system to prove that a certain portion of electricity has been produced and is being supplied.

Among other options, the European Economic Area could have considered Tradable Green Certificates, which differ from GOs by national governments setting a target to be reached for the country in which they are introduced. GOs are a type of tradable green certificates, as both relate to the origin of the produced electricity. However, GOs may be issued independently of government policies and therefore create an extra source of income for producers. This extra income is fully based on market demand instead of government policy.

Feed-in Tariffs are a direct governmental subsidy for the producer per KWh of renewable electricity produced.Though FiT is beneficial for stimulating small-scale projects on a household level, it is driven by governmental policy instead of market supply and demand for renewable energy. It also differs from GOs that FiT does not allow consumers to source their energy consumption.

The main difference between GOs, Tradable green certificates and Feed-in Tariffs lies in the choice that consumers have. GOs are available to anyone and can be redeemed by anyone, whereas TGC and FiT are foremost governmental policy. Subsidies depend on government’s decision. They can be scrapped at any time.

All three systems have the same underlying mechanism and aim: to track the origin of the generated electricity. GOs are the instrument in Europe, RECs in North America and I-REC in a number of other countries across the globe. All three systems rely on the importance to document where electricity is coming from. A consumer buying any of these certificates in the geographic area where they operate, cancels these certificates in order to verify the origin of the electricity that they have consumed. All three certificates are market-based instruments and voluntary.