Guarantees of electricity origin: opportunities for active consumers

“The mechanism of guarantees of origin is an effective tool for decarbonizing the energy sector and the economy, attracting new investments, reducing the financial burden on industrial exporters and developing renewable energy in general,” said Serhii Kravchuk, Director of Electricity Trading and Supply in KNESS, during his speech at the webinar “Guarantees of Origin as a Green Transition Financing Tool.”

Our speaker, together with other industry experts and market participants, discussed the current state of implementing the system of electricity origin guarantees in Ukraine. This topic is quite new, but relevant and important, and certain steps have already been taken in the legislative field – the Law of Ukraine No. 3220-IX and the Cabinet of Ministers’ Resolution No. 227 “On the Introduction of Guarantees of Origin of Electricity Generated from Renewable Energy Sources”, which approved the relevant Procedures, have been adopted. It is planned to launch a platform for trading electricity GoOs and develop a register of GoOs. Therefore, the full implementation of the GoO mechanism is still ongoing. 

Why is it necessary to confirm the electricity origin? 

Serhii Kravchuk outlined the main advantages of the GoO model for an active consumer:

• additional profit for renewable energy producers: even if electricity prices are close to zero (for example, during daytime hours, when solar power plants have the most generation), the producer can keep their power plant running and make a profit from selling the Guarantee of Origin received for electricity generation

• confirming the clean energy consumption is an important advantage for companies that are guided by ESG standards and conduct their business with care for the environment

• expanding export opportunities as a result of confirming that the company produces clean energy products (after the fact of recognizing Ukrainian guarantees of origin in the European market)

• optimization of taxation: thanks to the guarantees of the origin of electricity from renewable energy sources, the amount of CO2 emissions can be “compensated”
• attracting electricity consumers to actively participate in market processes, which will have a positive impact on the formation of fair market relations.

What is the global context for the importance of implementing the GoO?  

 First, Ukraine’s support for the EU’s green course towards achieving climate neutrality goals, in particular, in terms of decarbonizing the economy, requires effective steps. Secondly, the need to abandon cross-subsidization, which is actually a requirement of the EU. 

The event was held within the framework of Ukraine Energy Initiative, organized by the UN Global Compact in Ukraine and ExPro.

We are grateful to the moderators Vitaliy Opryshko and Daria Orlova for creating a platform for discussing the relevant and important topic — Guarantees of Origin.