One of the biggest barriers to the development of renewable energy sources, is their financing. There are still questions as to whether businesses can afford to invest in modern energy sources and energy efficiency. But reality, for many reasons, tends to force the conclusion that they can’t afford not to.[MH2]
The decarbonisation plan outlined by the European Union is very ambitious and undoubtedly necessary. But, its implementation requires huge financial outlays and changes in the mentality of Europeans, ergo without a support system for the development of RES.
There are several pillars of the RES financial support system in Poland:
The RES support system is largely based on state intervention and influence. However, in the long run, market mechanisms are one of the more effective ways to introduce and consolidate the desired changes. This is why the certification system is gradually being replaced by an auction system (certificates are to be in place by 2035), but it is still one of the elements of support for the green energy transition.
As I have already mentioned, certificates of energy origin are one of the instruments supporting Polish producers of electricity from RES, such as wind, solar, water, geothermal and biomass. It is a document certifying that electricity comes from these sources.
Its introduction aims to promote the production of green energy, reduce CO2 emissions into the atmosphere and undertake projects to improve energy efficiency.
Certificates of energy origin, also known as certificates, are issued by the President of the Energy Regulatory Office (ERO) at the request of an electricity producer. The application for a certificate of energy origin should be submitted through the local distribution company on whose territory the generating source is located.
What is extremely important, and what constitutes the value of this form of support for generators, is that a certificate of origin of electricity confers property rights. They are tradable and are an exchange commodity. This is done in such a way that after registration, each certificate is transferred by the ERO to the Certificate of Origin Register, which is maintained by the Polish Power Exchange (POLPX). When the energy certificate of origin appears in the registration account in the Register, the energy producer can sell the resulting property rights on the Property Rights Market. Their price is subject to the laws of the market.
The system is structured in such a way that sellers of electricity, gas and heat, who sell to end users, must hold a certain number of certificates. If they do not hold them, are obliged to pay a substitution fee. In this way, funds are raised to support RES.
Certificates of origin for energy are divided according to which renewable source the energy was generated from.
- green - energy from wind, water, sun, geothermal, biomass and co-firing
- blue - the combustion of agricultural biogas
- white - the savings that result from energy efficiency measures
A certificate of energy origin is now granted to those generators who generated energy for the first time in a renewable energy source installation prior to 1 July 2016. This also applies to energy generated during the technological start-up of the installation.
Certificates of energy origin are granted for a further 15 years, but are not granted past 31 December 2035. This period is calculated from the date of the first generation of energy evidenced by the certificate of origin.
Another element in the puzzle of the RES support system is the guarantee of origin. This is issued by the President of the ERO at the request of the generator, based on the Renewable Energy Sources Act of 20 February 2015 (i.e. Journal of Laws of 2020, item 261, as amended).
It is also a document that confirms that the electricity injected into the distribution or transmission network was generated in a renewable source installation. The guarantee of origin specifies how much energy from a renewable source has been fed into the grid for every 1 MWh. The guarantees are transferred to the Register of Guarantees of Origin (RGP).
Amongst other things, the document specifies its expiry date, which is 12 months after the date of completion of the generation of electricity from RES in the installation covered by the guarantee application.
The guarantee of origin should not be confused with the certificate of origin. An important difference is that the guarantee is voluntary. There is no obligation to redeem it.
A second difference is that no property rights arise from it. Most often, the guarantee is purchased by large companies for image purposes.
The third difference is that it can be traded on the European market, so it can be sold not only to companies registered in Poland, but also to branches of foreign companies. What is more, the purchase of the guarantee of origin of energy is independent of its physical delivery.
Both documents are redeemed at the time of delivery to the end user.
Photon Energy, as a seller of energy in accordance with the statutory requirement, purchases an appropriate number of certificates of origin and ensures their redemption. At the request of our customers, we can also purchase guarantees of origin and ensure their redemption.
Energy transition, despite the reduction in the obligation to redeem certificates of origin, is still a colourful transition. Green certificates are still a key source of revenue for many renewable energy producers in Poland and without them, RES development would be difficult. This also applies to guarantees of origin.
So what colour is your electricity?
