GO legislation: regulatory framework & compliance requirements

Understanding the legal challenges of GOs

If you’re a renewable energy producer wanting to enter the market of Guarantees of Origin, you’ll need to adhere to strict regulatory requirements, including energy type, regional requirements and whether or not your plant is considered renewable. 

Energy producers that are considered to be producing ‘non-fossil fuels’ can apply for the scheme and applicants are not limited by power plant size. Acceptable sources include:

• Solar

• Biomass

• Biogases

• Wind

• Landfill Gas

• Sewage Treatment Plan Gas

• Hydropower 

• Aerothermal

• Ocean Energy

• Hydrothermal

Avoiding legal pitfalls: best practices and regulatory framework for GO management

The creation and management of Guarantees of Origin can be complex, and as a government-led scheme, it’s important that GOs are managed correctly from a legal perspective. 

To avoid legal pitfalls of Guarantees of Origin, you must keep governmental bodies updated with the correct data and information during the accreditation process and the lifecycle of your renewable project. This is important because if regulators feel that the information provided is inaccurate, they can withdraw the accreditation of your Guarantee of Origin. This can have both a financial and a reputational impact on your future Guarantees of Origin as purchasers may no longer trust the authenticity of your GOs if they are withdrawn.

Energy legislation, compliance requirements and regulatory changes affecting GOs

Guarantees of Origin are an important way for companies to prove to stakeholders that they are investing in renewable energy, but as energy legislation and regulatory requirements become ever more stringent, this may go on to affect the impact of Guarantees of Origin. 

Sustainability reporting 

The EU’s Corporate Sustainability Reporting Directive is predicted to motivate an uptake in businesses acquiring Guarantees of Origin. Companies will be required to provide evidence of its energy procurement, including renewable energy. Businesses will also be required to report emissions from its own power procurement and all of its value chain. Guarantees of Origin will be a key tool to help provide this clarity. 

RE100 

RE100 is a global association of members who have pledged that their businesses will consume only 100% renewable energy prior to 2050. Members include players such as Apple, Microsoft, Google and Facebook. From the start of this year, RE100 only recognises Guarantees of Origin from power plants 14 years or younger to motivate green energy claims, which should motivate investment in younger renewable energy plants. 

Navigating international GOs legal considerations

While Guarantees of Origin are the certification process in the EU, there are other regions across the world that are operating under similar schemes to increase investment in renewable energy. While they’re not a straight clone of Guarantees of Origin and usually don’t transfer over to other areas outside of their certification region, they do tend to use a similar certificate-based verification process. 

International standards: transferring Guarantees of Origin internationally 

Guarantees of Origin can be transferred on an international basis between different countries as long as they are a member of the EU. They must also be a member of the Association of Issuing Bodies (AIB). Some companies within the EU have their own national standards, for example Romania. Countries that are not members of the AIB may have difficulty transferring Guarantees of Origin on an international basis. 

Guarantees of Origin in the USA and Canada 

In the United States, the equivalent of a Guarantee of Origin is a Renewable Energy Certificate (REC). Much like Guarantees of Origin, Renewable Energy Certificates correspond to one megawatt-hour (MWh) of renewable energy and are the verified way to track the source of renewable energy procured via a certificate. Registries, or energy tracking systems, are used to track certificates on a regional basis - there are 10 registries across the USA and Canada. There are limitations on transfer of RECs between registries, for example Texas’ registry allows export but not import of RECs. 

Guarantees of Origin elsewhere in the world 

In other areas of the world, the acquirement of equivalents of Guarantees of Origin has been slower on the uptake. In Southeast Asia, Guarantees of Origin are also known as a Renewable Energy Certificate (REC). Countries taking part in this scheme include Vietnam, Singapore, Indonesia, Brunei Thailand and Cambodia and largely include solar and wind renewable energy. Conversely, other APEC regions that have seen further success with RECs are China, Australia and Japan, though each has a different take on the certification scheme. The latter two, Japan and Australia, have the longest running REC in the APAC region, which began before 2000 for Australia, and in 2000 for Japan and include hydro, biomass, solar, wind, and geothermal renewable energy.