Europe remains to be by far the largest market for green energy worldwide. According to the now published report from the Association of Issuing Bodies (AIB), 470 terawatt hours’ worth of Guarantees of Origin (GoO) have been cancelled in 2017 within the European trading system EECS. The statistics show an impressive development. Within the last five years, the demand for unbundled renewable energy in Europe has doubled, with a growth rate of nearly 30% in the past year alone.
Although cancellations couldn’t quite keep pace in the second half of the year, the overall number is considerably higher. The second half of 2017 is in fact slightly lower than the same period in 2016 but cancellations within the first half of 2017 easily outweigh the entire year’s total in 2016.
Whilst a part of the significant increase in demand can be attributed to Spain – which is both a major producer and also an important market for GoOs – joining the European Energy Certificate System in spring 2016, the development still shows an 8% increase even with Spain completely discounted from the statistics.
The growing interest in GoOs can be explained by the developing green energy commitment of the private sector. More and more companies are switching to green energy and are procuring GoOs to improve their carbon footprint and reduce their scope 2 emissions. For example, the number of signatories to RE100, a group of companies committed to the common goal of “100% renewable energy”, has grown from 15 in 2015 to 122 today. As RE100 states in its 2017 Annual Report, the collective electricity demand of its members equals over 159 TWh per year and on average the RE100 companies source 32% of their individual demand from renewable sources.
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Taking a closer look, we can see from the AIB statistics that Germany, Spain and Switzerland are currently the markets with the highest demand for GoOs within the European Energy Certificate System. Together, these three countries resemble nearly 50% of all GoO cancellations in 2017.
Moving focus on to generation, it is clear that hydropower is still in a league of its own as a major source of energy, with Norway being by far the largest producer of GoOs. Certificates representing a total of 326 terawatt hours of green electricity generated in hydropower plants have been cancelled in 2017 in the EECS countries. This is an increase of 11% compared to the previous year and equals to 69% of all GoO cancellations.
Whilst cancellations of GoOs from biomass have increased by 30%, it is the development of the solar and wind sectors, which is particularly remarkable. Although still small in relation to hydropower, cancellations of GoOs from wind power have more than doubled compared to the previous year and cancellations from solar power have even increased to 4.5 times the number of the year before, after tripling between 2015 and 2016.
The increase on the demand side is accompanied by an opposite development in production. Issuance of GoOs within the EECS has decreased by 20% as compared to the previous year. It will be interesting to see if and how this influences the development of the market in 2018.