At the international level, the GCSs have demonstrated to be a robust policy instrument used by countries to increase the share of renewable energy sources in their electricity mix. Among its different characteristics, Green Certificates:· Serve transparently to obligated entities as a means to fulfil their renewable energy targets.· Open a new universe of opportunities for a voluntary demand driven by customers seeking to minimize the environmental externalities linked to their electricity consumption.
· Allow electricity consumers to have access to renewable electricity even in those locations where there is a limited number of generation technology options.· Enables end-consumers to claim the use of renewable electricity at a different time from the moment of generation. · Are accessible in numerous jurisdictions given the current ample diversity of tracking systems. (Environmental Protection Agency, 2010) International experience United Kingdom Renewable Obligations (RO) Currently, Fuel Mix Disclosure regulations in the European Union require all suppliers to disclose Greenhouse Gas (GHG) emissions linked to their power supply. In order to comply with such regulation, European countries use Guarantees of Origin (GOs) to demonstrate where each MWh of electricity has been originated from. Once the grid operator receives the GOs, it removes all claimed generation from identified sources from the overall national electricity GHG emission factor, which results in a ‘residual’ energy mix GHG emissions factor.
In addition to this use, GOs are also of use for a voluntary market eager to produce more environmentally friendly products or services. (World Resources Institute, 2015) In addition to GOs, since 2002 the United Kingdom (UK) also uses Renewable Obligation Certificates (ROCs), which serve as a means to ensure obligated entities with a Renewable Obligation (RO) to count with an additional long-term (e.g. 20 years) fix cash-inflow per unit of renewable electricity output. The objective of the scheme was to get an increasing participation of renewable energy sources in the national electricity matrix. Under this scheme, a ROC serves as a proof that a certain amount of electricity has been generated from a renewable source, therefore, the renewable energy generator has two sources of income, first from the sale of electricity to the wholesale market and an additional one from the sale of ROCs.
Originally, a ROC was equivalent to one megawatt hour (MWh) of eligible renewable output; however, since April 2009, the RO has been banded to provide a differentiated support to distinct renewable technologies, factoring in technology-related costs and market readiness. Additionally, as of 2010, feed-in tariffs (FITs) have served as an incentive for projects of 5 MW of installed capacity or smaller. Currently, the RO is phasing out to be replaced by a new instrument, the Contract for Difference (CfDs) for renewables. The CfDs are a reverse auction system designed to provide project investors with certainty over a low carbon electricity generation potential investment, allowing to fix prices on electricity output and, as a consequence, to reduce risks linked to variations in energy prices.
