A closer look into the rise of Guarantees of Origin in the European Union

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Guarantees of Origin (GoOs) are certificates that assure that the origin of electricity is based on renewable energy sources. They were implemented by the European Union in 2001 and are part of a series of efforts to promote decarbonisation development.

Through GoOs, energy suppliers and consumers can prove the origin of the electricity, while supporting the growth of clean energy. To learn more about Guarantees of Origin, read Understanding Guarantees of Origin.

From 2019 to 2023, the volume of transactions of issued GoOs grew from 676 TWh to 987 TWh, representing an increase of 46%.

Graph 1 presents the yearly evolution of all EU members, by technology.

Hydro is still the major contributor of GoOs, followed by wind, which grew 125% in the period. Solar technologies, despite the lower share of GoOs, presented the highest growth rate, increasing almost 250% between 2019 and 2023. Certificates issued for fossil and nuclear by the European Energy Certificate System were also considered for this analysis.

In regards to the volume per country, Graph 2 presents the volumes of certificate transactions issued in 2023.

Norway takes the lead mainly due to the country’s considerable hydro potential, which accounts for almost all the certificates issued. Sweden, the third country in the list, has also a high share of hydro, but wind onshore certificates do play an important role. France, the second country, has the largest volume of wind certificates issued in 2023. 

Despite Germany having the largest installed capacity of renewables between the European countries, it is not a large issuer of GoOs. This happens because renewable generators in Germany participating in any supporting scheme are not allowed to issue Guarantees of Origin, making the country the largest importer of GoOs.

Graph 3 presents the net volume of imports/exports per country.

It is worth noting that Germany largely exceeds the Netherlands, the second-largest net importer. Norway and Sweden, on the other hand, are net exporters, with significant shares of hydro and wind for both countries.
 

Since GoOs are a major component of a PPA,especially in regards to its price, it is essential to keep track of their market developments and its regulatory updates. As the PPA market grows, GoOs follow as a driver pushing their demand upwards and, therefore promoting a competitive market for renewable energy generators. 

Reach out to us to understand how GoOs may correlate with the price of your PPA and its implications.