Overview of existing green power labelling schemes · Green certificates represent the...

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Overview of existing green power labelling schemes

WP 1 report from the CLEAN-E project

A report prepared as part of the EIE project „Clean Energy Network for Europe (CLEAN-E)”

September 2006

Written by Heikki Willstedt ([email protected]), WWF Spain Veit Bürger ([email protected]), Öko-Institut

With contributions from

Dominik Seebach (Öko-Institut), Heidi Adensam and Markus Meissner (Ös-terreichisches Ökologie Institut), Johan Kling (Swedish Society for Nature Conservation), Louis von Moos (VUE), Evangelina Nucete (WWF Spain), Samantha Ölz and Mark Draek (IT Power), Gianluca Ruggieri (eERG Poli-tecnico di Milano), Sirka Tepponen (Finnish Association for Nature Conser-

vation), Ascanio Vitale and Matteo Leonardi (WWF Italy)

mailto:[email protected]


The project "Clean Energy Network for Europe (CLEAN-E)" is supported by the Euro-pean Commission through the EIE programme (contract no. EIE/04/136/S07.38593).

The sole responsibility for the content of this report lies with the authors. It does not represent the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.

© September 2006

The CLEAN-E project consortium:

Öko-Institut (Coordination)

Inter-University Research Centre for Technology, Work and Culture (IFZ)

IT Power Ltd.

Politecnico di Milano, Dipartimento di Energetica (eERG)

WWF European Policy Office (WWF EPO)

WWF/Adena WWF Italy

Comité de Liaison Energies Renouvelables (CLER)

Swedish Society for Nature Conservation (SSNC)

Österreichisches Ökologie-Institut für angewandte Umweltforschung (ÖÖI)

Ecofys

Subcontractors:

Eidgenössische Anstalt für Wasserversorgung, Abwasserreinigung und Gewässerschutz (EAWAG)

Verein für umweltgerechte Elektrizität (VUE)

CLEAN-E Overview of Green Power Labelling Schemes

The CLEAN-E project Quality labels which define a minimum standard for green electricity products assist consumers to verify the ecological performance of green products. National labelling programmes which have emerged in some European countries are important and power-ful instruments to strengthen consumer confidence in the voluntary green electricity market.

Objectives

The CLEAN-E project will accompany the establishment of new and the improvement of existing green electricity product labels in selected EU Member States. In this regard the CLEAN-E project will support the efforts of the European Green Electricity Net-work Eugene1, a non-profit approach which has set up a minimum standard for green electricity labelling schemes. The Eugene Standard will serve as the major point of ori-entation throughout the project.

The establishment of new labels will be accompanied by a wide range of activities. This includes the development of ecological minimum standards for the two key renewable technologies hydropower and biomass. The project also investigates the feasibility of widening the scope of green power labelling towards the integration of energy effi-ciency as well as renewable heat. CLEAN-E analyses the interface of green power la-bels with RES related policies on the national and the EU level including the Guarantee of Origin for renewable electricity and Electricity Disclosure. Furthermore, the project will include a wide range of activities aimed at disseminating and sharing best practices for green power procurement.

Expected key results

• New green power labelling schemes in France, Italy and Spain including the estab-lishment of sound labelling structures and the development of label criteria. Existing labels (e.g. in Sweden and Austria) are intended to be improved towards a harmo-nised European standard.

• Guidelines how to implement ecological minimum standards for hydropower and biomass in the scope of green power labels.

• Procedures and methodologies how to integrate measures in the field of energy effi-ciency and RES-H into the scope of green power labelling schemes.

• Guidelines how to integrate new policies on the EU and Member States' level (e.g. Guarantee of Origin, Electricity Disclosure) and private sector initiatives (such as RECS) in green power labelling schemes.

1 Eugene (www.eugenestandard.org) is an independent network bringing together non-profit organisa-

tions such as national labelling bodies, experts from environmental and consumers organisations, and research institutes. The Eugene network pursues no commercial interest. Some of the Eugene activi-ties have been partly funded by the EU Commission (DG Environment).

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Overview of Green Power Labelling Schemes CLEAN-E

Contents

Glossary ............................................................................................................................7

1 Introduction.............................................................................................................15

2 Green Electricity Labelling Schemes ....................................................................17 2.1 Definition of labels and other green electricity products .............................17

2.1.1 Type I: Environmental labels or eco-labelling............................................. 17 2.1.2 Type II: Environmental claims ..................................................................... 18 2.1.3 Type III: Environmental product declared electricity.................................. 18

2.2 Types of products .........................................................................................19 2.2.1 Consumption based products ....................................................................... 19 2.2.2 Investment based products ........................................................................... 19 2.2.3 Contribution based products ........................................................................ 20

2.3 The analysed labels.......................................................................................21

3 Main issues defining green electricity eco-labels .................................................22 3.1 Eligibility criteria..........................................................................................22 3.2 Additionality.................................................................................................26 3.3 Administration of the Labelling Schemes ....................................................28

4 Market impact of the analysed labels ...................................................................30

5 Compatibility with the Eugene Labelling Standard............................................31

6 Conclusions..............................................................................................................32

7 Overview of existing and intended green power labelling schemes ...................33 7.1 AUSTRIA.....................................................................................................33

7.1.1 Introduction.................................................................................................. 33 7.1.2 Green electricity product labels ................................................................... 35

7.2 DENMARK ..................................................................................................39 7.2.1 Introduction.................................................................................................. 39 7.2.2 Green electricity product labels ................................................................... 40

7.3 ESTONIA .....................................................................................................41 7.3.1 Introduction.................................................................................................. 41 7.3.2 Green electricity product labels ................................................................... 41

7.4 FINLAND.....................................................................................................43 7.4.1 Introduction.................................................................................................. 43 7.4.2 Green electricity product labels ................................................................... 46

7.5 GERMANY ..................................................................................................49 7.5.1 Introduction.................................................................................................. 49 7.5.2 Green electricity product labels ................................................................... 52

7.6 ITALY ..........................................................................................................68 7.6.1 Introduction.................................................................................................. 68 7.6.2 Green electricity product labels ................................................................... 69

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7.7 THE NETHERLANDS ................................................................................73 7.7.1 Introduction.................................................................................................. 73 7.7.2 Green electricity product labels ................................................................... 77

7.8 SLOVENIA ..................................................................................................87 7.8.1 Introduction.................................................................................................. 87 7.8.2 Green electricity product labels ................................................................... 88

7.9 SPAIN...........................................................................................................90 7.9.1 Introduction.................................................................................................. 90 7.9.2 Green electricity product labels ................................................................... 93 7.9.3 Green electricity tariffs................................................................................. 93

7.10 SWEDEN......................................................................................................98 7.10.1 Introduction.................................................................................................. 98 7.10.2 Green electricity product labels ................................................................. 100

7.11 UNITED KINGDOM .................................................................................109 7.11.1 Introduction................................................................................................ 109 7.11.2 Green electricity product labels ................................................................. 114

7.12 AUSTRALIA..............................................................................................126 7.12.1 Introduction................................................................................................ 126 7.12.2 Green electricity product labels ................................................................. 126

7.13 NORWAY ..................................................................................................132 7.13.1 Introduction................................................................................................ 132 7.13.2 Green electricity product labels ................................................................. 133

7.14 SWITZERLAND........................................................................................134 7.14.1 Introduction................................................................................................ 134 7.14.2 Green electricity product labels ................................................................. 135

7.15 USA ...........................................................................................................144 7.15.1 Introduction................................................................................................ 144 7.15.2 Green electricity product labels ................................................................. 145

8 Bibliography ..........................................................................................................150

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List of Figures

Figure 1: Share of renewable electricity (%) in European countries with green electricity labels (2003) ................................................................................25

Figure 2: Market potential of green power ..................................................................30 Figure 3: Austria - Total electricity supply in Austria 2004 by energy source............33 Figure 4: Austria - Electricity price composition, 2004...............................................35 Figure 5: Germany - Flow chart of the allocation mechanism of the German

Renewable Energy Law................................................................................51 Figure 6: Spain - Sketch of the Spanish power market operation and economical

retribution modalities....................................................................................91

List of Tables

Table 1: Characteristics of the analysed labels...........................................................21 Table 2: National legal framework and eligibility criteria of the analysed labels......23 Table 3: Criteria for the different technologies under the eco-labels .........................24 Table 4: Use of certificates and Guarantees of Origin by the different labels ...........29 Table 5: Compatibility of the analysed green electricity labels with the Eugene

Standard ........................................................................................................31 Table 6: Austria - Labelling fee (Umweltzeichen –Grüner Strom) ............................38 Table 7: Italy - Fees for each client typology (100% Energia)...................................70 Table 8: UK - Key design elements of UK quota obligation system. ......................111 Table 9: USA - Estimated Green Power Customers and Sales by Market

Segment (2003)...........................................................................................144 Table 10: USA - Cumulative Number of Customers Purchasing Green-e

Certified Power...........................................................................................148 Table 11: USA - Annual Sales of Green-e Certified Green Energy in

Competitive Markets (millions of kWh) ....................................................149

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Glossary

Additionality: In the context of green electricity labelling additionality is the key con-cepts in order to ensure that the voluntary green electricity market contributes to in-creasing sustainability in the electricity sector. Additionality is given when a green elec-tricity product leads to an extra environmental benefit compared to a baseline defined by the development in the electricity market which would have occurred under the cur-rent market conditions and the existing legal framework. For instance additionality can be reached by initiating the installation of new RES plants or by improving the envi-ronmental performance of existing plants.

Bilateral contract: A direct contract between two market participants (e.g. power pro-ducer, supplier, trader) outside of a centralised power pool or power exchange.

Certificate: The term is used twofold: (I) The successful certification of information is indicated by a certificate. This is an official document issued by the certifying body. In the context of green electricity labelling a certificate indicates that a certain product meets the standards applied by a label. (II) Certificates can also stand for a standardised official record proving that a specified amount of electricity has been generated from specific sources. Certificates are well known from the renewable electricity market. Green certificates represent the environmental value of renewable electricity produc-tion. The certificates can be traded separately from the energy produced. By that, the certificates get an own monetary value.

Certification: The process of verifying specific information on products by independ-ent bodies. Certification provides a guarantee that a particular company or product have been tested and that they meet the specified requirements, e.g. set forth by a green power label.

Cogeneration (or Combined Heat and Power, CHP): A CHP plant is an installation where there is simultaneous generation of usable heat and power (usually electricity) in a single process. The term CHP is synonymous with 'co-generation'. Electricity genera-tion from CHP plants with an inherent non-CHP component (e.g. many district heating plants with steam turbines are operated in condensing mode in summer time emitting a large portion of the residual thermal energy into the environment) needs to be divided up into a CHP mode and a condensing mode.

Double counting: Occurs when the attributes of the electricity generated (e.g. benefits from renewable sources) are sold or accounted for more than once.

EECS: The European Energy Certificate System (EECS) provides a standard for the use and transfer of Guarantees of Origins for renewable electricity following Directive 2001/77/EC. The EECS standard is developed by the Association of Issuing Bodies (AIB).

Electricity Disclosure: The fundamental idea behind electricity disclosure is to provide consumers with information about the electricity which they buy, e.g. information about

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the supplier's fuel mix or the related environmental impact associated with electricity generation. The concept of Electricity Disclosure has been introduced in the European electricity market by the revised Electricity Directive 2003/54/EC concerning common rules for the internal market in electricity.

Electricity product: An electricity product has particular properties distinct from a supplier’s overall supply mix and is often marketed and sold to consumers on the basis of these properties e.g. green electricity products, no nuclear content products, etc.

Eligibility: In the context of green electricity labelling eligibility criteria define which energy sources and technologies are in principle eligible, which ecological standards eligible power plants have to comply with and which technologies are entirely excluded in the scope of the scheme.

Eugene: The European Green Electricity Network (www.eugenstandard.org) is an in-dependent network bringing together non-profit organisations such as national labelling bodies, experts from environmental and consumers organisations, and research insti-tutes.

Eugene Standard: Eugene has developed a meta-standard for green electricity to which national green electricity labels can be accredited. The three main elements of the standard comprise Eligibility, Additionality and Independent Third Party Verification.

Feed-in system: A primary support instrument used in European countries in which a fixed price is paid for renewable electricity which has been fed into the public grid. Of-ten different price levels are specified for different types of renewable electricity tech-nologies, depending on their level of market penetration and their stage of market de-velopment. An obligation is set on network operators or supply companies to purchase all renewable electricity supplied to the grid at these fixed tariffs. The costs are usually passed on to the final consumers by means of a levy on the network tariff or a supple-ment to the electricity tariff.

Green Electricity: There is no common definition of this term. In many cases green electricity is understood as electricity from renewable energy facilities that have a low impact on the environment. There are varying opinions about what type of electricity should count as green and the criteria can vary from country to country. In some coun-tries “Green Electricity” might be generated from non-renewable sources, too, e.g. by highly efficient CHP plants. A term used similarly to “Green Electricity” is “Green Power”. In practical terms there is no difference between “Green Power” and “Green Electricity”.

Green Electricity Labels: Green Electricity Labels usually define minimum standards for products and are normally based on subjective criteria of the issuing organization (e.g. environmental or consumer organizations). To get the permission to carry a respec-tive label, a product must fulfil these minimum standard. Normally it is subject to an independent audit verifying the quality of the product. Auditing may be offered by offi-cial bodies (e.g. government agencies) or by non-governmental organisations.

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Green Tariffs: This term can be regarded as synonym for "Green Product". It is used to distinguish between green electricity offers in regulated markets from offers in liberal-ised markets.

Guarantee of origin (GoO): A Guarantee of Origin for renewable electricity is a document proving that a certain volume of electricity has been produced from renew-able sources. Guarantee of Origin have been implemented by the Directive on the pro-motion of electricity produced from renewable energy sources in the internal electricity market (Directive 2001/77/EC). Member States are required establish appropriate GoO systems which allow producers of renewable electricity to request such a GoO. GoO have to specify the energy source from which the electricity was produced, the dates and places of production, and in the case of hydroelectric installations, indicate the capacity.

Label: A seal put on a product to provide specific information to the customer. In the context of product labelling it indicates that a product fulfils the criteria applied by the label. Instead of deciding on multiple different criteria the customer may rely on the label and the specific criteria standing behind the label.

Portfolio: The collection of generation attributes all owned by the same company or supplier.

RECS: The Renewable Energy Certificate System (www.recs.org) is a certificate sys-tem established for the voluntary green electricity market. RESC is administered by the Association of Issuing Bodies (AIB) and has recently be further developed to the EECS System which is aimed at providing a common standard for the issue, transfer and re-demption of Guarantees of Origins for renewable electricity.

Renewable Energy: In general, the term renewable energy refers to ‘energy obtained from persistent and continuing flows of energy occurring in the environment’. EU Member States have historically taken differing approaches to defining which technolo-gies are classified as being renewable. This is an issue particularly regarding sources linked to wastes and to large hydropower plants. Likewise categorisation of the many forms of agricultural ‘biomass’ and ‘biofuels’ may vary between countries. These deci-sions have partly been dependent on government policy objectives and public percep-tions in each given country. A commonly accepted definition is provided by the Direc-tive on the promotion of electricity produced from renewable energy sources in the in-ternal electricity market (Directive 2001/77/EC).

Supplier: Entity that sells electricity to final customers.

Switching: The process of changing electricity supplier (i.e. electricity company) or to a different electricity product or tariff of the default supplier.

Tariff: A tariff is the price or schedule of prices, contractual terms and conditions for a defined service or set of services.

Transmission System Operator (TSO): Entity responsible for the secure an reliable operation of the transmission grid and taking care for the provision of system services (e.g. balancing power).

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Executive Summary

In view of climate policy targets and the enhancement of supply security the EU and its Member States have set ambitious targets for increasing the share of renewables (Direc-tive 2001/77/EC). Government support schemes for renewable electricity (RES-E) gen-eration have been demonstrated to be effective in some Member States, but achieving the targets is still a long way to go.

Market analyses indicate that green electricity products can be a tool to support further development of renewable energy sources, as opinion polls (such as Eurobarometer), consistently indicate public preference for renewable energy sources. The ongoing elec-tricity market liberalisation has also created further incentives for energy suppliers to offer RES-E products.

In the framework of the CLEAN-E project, the objective of this document is twofold:

• To provide information on existing green power labelling schemes in countries in which green power labelling has been underway for several years and those in which a green power labelling scheme is envisaged.

• To assess the current and potential impact of existing labelling schemes on the de-velopment of renewable electricity generation in the respective countries.

Green Electricity Labelling Schemes

Green electricity quality labels have been in place in the European Union since 1990. Of the fifteen European Union (EU) and non-EU countries analysed here, four had no country specific quality label. Germany has three quality labels with slightly different criteria.

Definition of labels and other green electricity products

There is no widely accepted definition of 'green electricity' despite there being a number of different products on the market. Many countries have established legal definitions on which energy is to be considered renewable, however a common definition for green electricity is lacking in most legislations.

A general classification of labelling, environmental declarations and environmental claims can be found within the ISO-standards. The following classification is partly based on the ISO system:

• Environmental labels or eco-labelling: Environmental labels or ecolabels are volun-tary systems operated by a third party organisation, which allows the use of a spe-cific environmental label on products (e.g. electricity products) that comply with cer-tain ecological criteria.

• Environmental claims: An environmental claim is a statement, graphic or a symbol that indicates a specific environmental aspect of a product; commonly to indicate less environmental impact compared to a standard product. In the case of electricity, such products are usually fed by production-declared electricity such as wind or hydro-power, commonly with its own brand.

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• Environmental product declaration: Similar to labels, Environmental Declarations provide standardised information about the environmental impact of a product, how-ever the actual assessment of the product is left to the consumer.

Types of products

There are two basic types of green electricity products:

Consumption based products (often referred to as supply model): Green electricity cus-tomers are supplied with electricity generated by environmentally sound facilities. The supplier needs to prove periodically that he has acquired property rights on environ-mental attributes associated to eligible green electricity generation which correspond to the amount of electricity supplied to green customers. The determining factor in this regard is the contractual supply of electricity from eligible sources. Environmental benefits accrue from the characteristics of the supplied electricity.

Contribution based products (often referred to as fund model): Under contribution based green electricity schemes, a green supplier charges a premium on top of the sup-ply of electricity which might either come from conventional or from renewable sources. The premiums build a fund which is invested in expanding eligible green en-ergy capacity.

The analysed labels

The document analyses the following green electricity labels operating in eleven different countries:

• Umweltzeichen Richtlinie UZ 46 Grüner Strom (AUT) • Bra Miljöval (SWE, DK, NOR) • Norppa (FIN) • ok-power (GER) • Grüner Strom Label (GER) • TÜV Labels (GER) • Bollino Verde (ITA) • Milieukeur groene elektriciteit (NL) • Naturemade (CH) • Green-e (USA) • Green Power (AUS)

Most of the labels are based on consumption products. The two German ecolabels ok-power and Grüner Strom Label accept also contribution based products.

Main issues defining green electricity labels

1. Eligibility

Different to green electricity generation stimulated by public support instruments green electricity products offered on the voluntary market underlie market processes which are mainly determined by the demand side (consumers). For that reason green electric-

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ity suppliers (but also green electricity labels) need to take into account the diverse con-sumer expectations towards different green energy sources when designing new prod-ucts. Eligibility criteria have to be applied as to reflect what green electricity consumers perceive to be green.

Generally, all kinds of renewable energy are seen as possible sources but labels with broader requirements also include high efficient fossil generation (such as high efficient gas-fired CHP), whereas in most cases renewable energy technologies are exclusively eligible within the premium levels of the respective labelling systems.

The first requirement for sources of green electricity generation for eco-labels to be eligible is to fully comply with all legal requirements that they have or will have to meet within the given national (and in some cases European and international) legal frame-work. In addition most labels apply additional requirements devised to reduce the envi-ronmental impact of specific renewable energy sources (such as hydropower or bio-mass) or technologies as to reflect what consumers expect from different technologies.

2. Additionality

The rationale behind the concept of additionality is that consumers who are generally willing to pay a supplement in order to be supplied by green electricity expect to con-tribute to the expansion of renewable electricity generation or the improvement of the environmental performance of renewable power plants above what is already stimulated or mandated by the legal framework (including public support regulations).

Additionality is given where the ecolabelled electricity product results in an improve-ment for the environment, additional to the baseline of ‘business-as-usual’. The cus-tomer pays a premium for this “additionality”.

Among existing labelling schemes several concepts of ensuring additionality of eco-labelled green electricity products are applied:

• By expanding the green power generation over and above the baseline defined by existing sources and public support.

• By lessening the environmental impact of existing green power plants (e.g. hydro-power or biomass plants), additional to standard legislation.

• The combination of both additionality concepts is also possible which means new plants and existing plants with improved environmental performance contribute to additionality.

Administration of the Labelling Schemes

For the purposes of this study the interaction between existing green electricity labels and existing EU, national or international schemes for certification of green electricity has been analysed. This mainly applies to the Guarantee of Origin for RES-E (resulting from EU Directive 2001/77/EC) and the certificates deriving from the RECS system.

In principle the information contained within RECS certificates or the GoO (disregard-ing as to whether a GoO is being issued in the scope of the EECS system) could be used

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as assisting tracking tool for green electricity labels. Currently only two labels accept GoO as proof of origin which is mainly due to the poor implementation design many Member States have chosen for their national GoO systems. RECS certificates are ac-cepted by some of the labels but in most cases additional information about the specific plant which is represented by the certificate is required as RECS certificates do not pro-vide all information necessary to prove compliance with label criteria.

Market impact of the analysed labels

Although there is a great potential to increase the amount of labelled green electricity sold in the market, the main driver for the expansion of renewables in the electricity sector are the existing public support frameworks applied by governments.

Apart from the Netherlands (were actually more green electricity is sold than it is na-tionally produced) and Sweden, in most countries the share of ecolabelled electricity is below 5% of the total renewable electricity generation. Thus there is still potential to increase the amount of labelled green electricity in the market, even when comprehen-sive additionality standards have to be met.

Compatibility with the Eugene Labelling Standard

The Eugene organisation (European Green Electricity Network) has developed a meta-standard for green electricity to which national green electricity labels can be accred-ited. The main differences between the non-Eugene accredited labels and the Eugene Standard are to be found in the field of “additionality” and in the eligibility criteria for hydropower and biomass.

Conclusions

• The criteria that most clearly set apart labels are the ones related to additionality and to hydro and biomass power plants. In this context legislation regulating public sup-port to renewables is an important factor shaping the design of a label.

• Most green electricity labels do not include criteria about additionality. Rising de-mand for products certified by labels with no additionality requirement do not auto-matically lead to an expansion of RES-E generation above what is initiated by pub-lic support.

• In countries with comprehensive public support for RES-E (e.g. through feed-in systems or obligation schemes) green electricity labels are not designed to compete with these systems but have a complementary role more focused on facilitating the financial viability of less mature RES-E technologies like solar PV or biomass, of energy sources out of the scope of the respective support instruments and on im-proving the environmental performance of existing plants, specially hydropower plants.

• Due to the high margin existing between potential sales of green electricity and ac-tual sales of eco-labelled green electricity, for the time being most labels can be

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broadly considered as marketing and awareness raising tools or an instrument to prove the origin or composition of a green electricity product.

• The potential and synergies of fully integrating Guarantees of Origin and/or RECS certificates in the scope of green electricity labels has not been fully exploited yet; in the case of GoO mostly because of the design Member Stats have chosen for their national GoO systems; in the case of RECS as RECS does not provide all informa-tion required to prove compliance with the criteria of many labels.

• Most green electricity labels, other than those accredited under Eugene, would need to introduce additionality and complementary hydropower and biomass criteria in order to be fully compatible with the Eugene Standard.

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1 Introduction

In view of climate policy targets and the enhancement of supply security the EU and its Member States have set ambitious targets for increasing the share of renewables (Direc-tive 2001/77/EC). Government support schemes for renewable electricity (RES-E) gen-eration have been demonstrated to be effective in some Member States, but achieving the targets is still a long way to go.

At the same time, opinion polls such as Eurobarometer1 consistently indicate public preference for renewable energy sources. Market analyses indicate that the potential market for RES-E goes beyond the small niche that it has occupied thus far. Apart from consumer demand the ongoing electricity market liberalisation has created the incentive for energy suppliers to offer RES-E products.

Unfortunately many green products do not represent a real improvement for the envi-ronment as they fail to generate additional environmental and climate benefits (envi-ronmental additionality). Only those green products can claim environmental addition-ality which ensure that customer contributions for RES-E result in new RES-E power plants. The investments in new plants must be over and above the baseline which is defined by existing RES-E power plants and the effects of public support schemes. Quality labels which define a minimum standard for green electricity products (like in the case of additionality as described above) assist consumers to verify the ecological performance of these products. In this regard national labelling programmes have emerged in some European countries as important vehicles.

In order to keep and strengthen consumer confidence in the green power market, the CLEAN-E project aims at initiating and accompanying the establishment of new green electricity product labels across selected EU Member States. In this regard the CLEAN-E project will support the efforts of the European Green Electricity Network Eugene2, a non-profit approach which aims at setting up the development and promotion of a har-monised green electricity standard across Europe. The Eugene network has agreed on a common European standard for green electricity (the “Eugene Standard”) which now needs to be disseminated throughout Europe.

The objective of this document is twofold:

1. Provide information on existing and envisaged green power labelling schemes in countries in which green power labelling has been underway for several years and those in which a green power labelling scheme is envisaged. The overview includes the different eligibility criteria and the description (and quantification where appli-cable) of the environmental additionality standard set up by the respective labelling

1 The Eurobarometer survey was carried out via face-to-face interviews with 29,430 people in October

and November 2005. The survey covers all 25 EU member countries, Bulgaria, Croatia, Romania, Turkey and Northern Cyprus (Turkish community). Special Eurobarometer 247.

2 Eugene (www.greenelectricitynetwork.org) is an independent network bringing together non-profit organisations such as national labelling bodies, experts from environmental and consumers organisa-tions, and research institutes. The Eugene network pursues no commercial interest. The establishment of Eugene has been partly funded by the Commission.

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schemes. Special attention is focused on the interaction with the existing policy framework of the respective country; especially mandatory renewable energy sup-port schemes (such as feed-in tariffs or renewable obligations) and the way the Guarantee of Origin (as required under Directive 2001/77/EC) has been integrated so far.

2. It will assess the impact of existing labelling schemes on the development of renew-able electricity generation in the respective countries. In this regard the assessment takes into account the market conditions and the policy framework in the respective countries. The assessment provides an insight into the question which types of label-ling schemes and labelling standards are effective in initiating new RES generation based on voluntary demand.

This handbook is addressed to national stakeholders (RES-E generators and associa-tions, electricity suppliers, electricity consumers, environmental and consumers organi-sations) and to a certain extent policy makers in EU Member States.

The scope of this document is focused on independently assessed labelling schemes. These schemes are operated by organisations (labelling bodies) which do not pursue any economical interest in the green power market. In addition these labelling schemes en-sure that labelled products have to undergo an independent third party verification in order to asses compliance with the label criteria. Self-certified “labels” or products (this comprises e.g. product minimum standards which are set up by a green electricity sup-plier) are also described in the document in exceptional cases (e.g. for Spain, one of the target countries for CLEAN-E in which no label has been set up yet) but are not taken into account in the cross analysis of the different labels existing at national level.

All data provided in this report reflect the status of mid 2005.

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2 Green Electricity Labelling Schemes

2.1 Definition of labels and other green electricity products

There is no widely accepted nomenclature of electricity products despite there being a number of different products on the market. A general classification of labelling, envi-ronmental declarations and environmental claims can be found within the ISO-standards. The following classification is partly based on the ISO system.3

2.1.1 Type I: Environmental labels or eco-labelling

Environmental labels or ecolabels are voluntary systems operated by a third party or-ganisation, which allows the use of a specific environmental label on products that com-ply with certain ecological criteria in order to differentiate these products within the same product group, like electricity. The overall goal of environmental labels is to en-courage the demand and the supply of those products and services that have less envi-ronmental impact, through communication of verifiable and accurate information on the environmental aspects of products and services, thereby stimulating the market to im-prove its environmental performance.

The labelling body must be a third party, meaning a person or body that is recognized as being independent of the supplier ("first party") and purchaser ("second party") inter-ests. The labelling body establishes environmental criteria assessing the environmental performance of the product during its life cycle. The aim is to differentiate environmen-tally more sound products from others in the same product category, based on a measur-able difference in environmental impact. Once the environmental criteria are estab-lished, all products which fulfil these criteria may be eligible to use the label and can apply for it. It is important that environmental labels should demonstrate transparency through all stages in order to achieve credibility among the consumers.

On the electricity market there are many labels but not all of them comply with the prin-ciples of ISO 14024. In Europe, several environmental labels are members of the Eugene network that has also added further definitions on eco-labelled electricity such as eligibility criteria and additionality. Furthermore there are some green products which fulfil a product standard which has been set up by the respective product sup-plier. Although such products use in many cases independent third party auditing in order to verify compliance with this minimum standard this concept can not be claimed as an environmental label or eco-label since the labelling criteria have not been estab-lished independent from market interests and since the minimum standard is operated by the supplier itself and not by an independent third party labelling body.

In many cases, non-profit NGOs are the organisations behind the labels. These organi-sations may not necessarily always agree with the requirements of the ISO 14024 stan-dard.

3 ISO 14020:2000: Environmental labels and declarations -- General principles

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2.1.2 Type II: Environmental claims

Many green electricity products on the European electricity market can be categorised as Type II labels or Environmental Claims. An environmental claim is a statement, graphic or a symbol that indicate an environmental aspect of the product; commonly to indicate less environmental impact compared to a standard product. In case of electric-ity, these products are usually production-declared electricity such as wind or hydro-power, commonly with its own brand. By adding statements like Green electricity, Ecoelectricity or even 100% hydropower, the supplier aims to convince the consumer that the offered product has a lower environmental impact compared to system power. In these cases, the consumer has to trust the supplier that the self-made environmental claim is correct.

Electricity has also a second dimension compared to other consumer products. Electric-ity is itself an immaterial product and may be regarded as a service from the supplier to feed in the same amount of electricity to the grid as consumed by the consumer. Also in this case, the consumer has to trust the supplier that there is a balance between the sup-ply contract and production, and that the specific production is not used for other envi-ronmental claims to other consumers.

In most countries, there is no specific law dealing with environmental claims on elec-tricity products. The legal restrictions are however specified in national marketing laws which are usually quite unspecific and only clarified in court cases. The national laws usually comply with the guidelines by International Chamber of Commerce (ICC).

There are also a number of electricity products on the market which are not substanti-ated or verified by auditing. In some cases the self-made environmental claim is directly misleading. Some guidelines on environmental claims may be found in the Guidelines for Making and Assessing Environmental Claims (report no.67/94/22/1/00281) by the EU Commission and the codex by the International Chamber of Commerce, ICC Inter-national Code of Environmental Advertising.

2.1.3 Type III: Environmental product declared electricity

Environmental product declared electricity (EPD) is a product with quantified environ-mental data with pre-set categories of parameters based on life-cycle assessment but not excluding additional environmental information. This means that the consumer will have a large amount of information about the environmental impact during the entire life-cycle of the product. The intention is similar to Type I Environmental labels, that the information will encourage the demand for and supply of those products and ser-vices that cause less environmental impact, thereby stimulating the potential for market-driven continuous environmental improvement with less environmental impact.

However there are several differences between Environmental labels and Environmental declarations. In case of Environmental labels the information to the consumer is binary, either the product fulfils the pre-set criteria of the label or not. The actual judgement if the product has less environmental impact compared to a standard product is performed by the labelling body through the criteria and labelling procedure. The consumer has to

18


trust the organisation behind the label to do the proper judgements. Environmental dec-larations, on the other hand, provide standardised information about the environmental impact but leave the actual judgement whether the product has less impact to the con-sumer.

An important aspect of environmental labels is to verify the eligibility and the balance between sales and production of the labelled product. In case of EPD there is only a third party verification of the information itself but not regarding the balance. Therefore the EPD-label may not automatically be regarded as a Guarantee of Origin.

2.2 Types of products

2.2.1 Consumption based products

Under consumption based products4, green electricity customers are supplied with elec-tricity generated by environmentally sound facilities. The supplier company ensures with legal agreements (supply contract) that the electricity is delivered through the elec-tricity grid from the production facility to the customer. Obviously it is not possible to ensure that physically the Green electrons produced by the environmentally sound facil-ity are going to the specific customers of the green product since electrons follows physical principles rather than legal or economic rules. Thus, certification can not prove the delivery of green electrons.

In order to establish the certification of consumption based green electricity it is neces-sary that the supplier can prove that it has acquired the property rights on environmen-tally sound generated electricity in the same amount as he had supplied to his green customers. Also, the supplying company must prove that it owns legal rights to trans-port this electricity from the generation facilities to all of his customers.

Another important issue related to this type of product is the concept of synchronicity of production and consumption of the green electricity that is sold. Many certification sys-tems demand prove of the balanced volumes of production and consumption only on an annual basis. This means the quantity marketed as green electricity in a specific year must be the same as the amount produced by eligible power plants. Other concepts re-quire balanced production and consumption for shorter periods than one year or even total synchronicity.

Due to the characteristics described above it is only possible to supply consumption-based green electricity in liberalised markets. National legislation needs to empower customers to choose among different electricity suppliers in order to be able to purchase consumption based green electricity.

2.2.2 Investment based products

Under investment based green electricity, customers gain property rights on environ-mentally sound power plants. Their mostly one-off payment is an investment rather than 4 This model is also often referred to as "supply model".

19


a price for electricity. Usually, the investor receives part of the profits resulting from selling the produced electricity and/or receives for its own consumption part of the elec-tricity produced by the facility.

Thus, under this approach, certification has to focus on the environmental soundness of the plant. With obtaining ownership of a plant, the investor shares all risk connected to the operation of the plant, as well.

2.2.3 Contribution based products

Under contribution based green electricity schemes5, the customer contributes money to a green power supplier in order to support further development of green energy installa-tions. In many cases, contribution based products are marketed as a bundle together with conventional electricity. In this case the customer receives conventional electricity and pays a surcharge that will be used as a donation for new renewable facilities. Like with consumption based products, customers will receive electricity and will usually pay on a regular basis. However, compared to consumption based products, there are two major differences:

• The customer does not acquire any property rights on green electricity. His property rights only cover conventional electricity.

• There are no legal agreements concerning the delivery of the green electricity through the electricity grid from the power plant to the customer. Thus, the company needs not necessarily supply electricity physically or economically.

As an alternative fund models can also be combined with supply offerings. In this case an electricity company is supplying its customers with green electricity (consumption based part of the product) and is, at the same time, investing a certain premium in the development of new green energy plants (contribution based part of the product).

5 This model is also often referred to as "fund model".

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2.3 The analysed labels

The following table classifies the labels covered by this study according to their charac-teristics as products:

Table 1: Characteristics of the analysed labels

Label Consumption based products

Contribution based products

Umweltzeichen Richtlinie UZ 46 Grüner Strom (AUT)

Bra Miljöval (SWE)

Norppa (FIN)

ok-power (GER)

Grüner Strom Label (GER)

Bollino Verde (ITA) Milieukeur groene elektriciteit (NL)

*

Naturemade (SWI)

Green-e (USA) Green Power Programme (AUS)

*There are currently no investment offerings in the Netherlands, the label itself does not differentiate between the two models.

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3 Main issues defining green electricity eco-labels

3.1 Eligibility criteria

Eligibility criteria define which energy sources and technologies are in principle eligi-ble, which ecological standards eligible power plants have to comply with and which technologies are entirely excluded in the scope of the scheme.

When it comes to green electricity, generally, all kinds of renewable energy are seen as possible sources but labels with lower requirements also include high efficient fossil generation, whereas renewable energy technologies are exclusively eligible within the premium levels of the labelling system.

For instance in countries in which a significant share of total electricity consumption is deriving from coal-fired power plants highly efficient fossil burning CHP plants are regarded as efficient means to reducing GHG emissions in the electricity sector.6 Here green electricity labels (like the German ok-power label, see section 7.5.2.1) might ac-cept fossil CHP plants to be eligible to labelled products, at least under certain restric-tions.7

Table 2 gives an overview of the existing analysed labels, the national regulatory condi-tions they are functioning under, and their eligibility criteria. A detailed description of the respective labels is provided by the country reports in section 7.

Power Sources

Generally the first requirement for sources of green electricity generation for eco-labels to be eligible is to fully comply with all legal requirements that they have or will have to meet within the given national (and in some cases European and international) legal framework. In most of the labels additional requirements devised to reduce the impacts of the renewable generating technologies are included. Table 3 summarises the re-quirements for each label:

6 Compared to the separate production of power and heat, CHP can significantly reduce the fuel input

to a power plant thus lessening the environmental impact related to burning fossil fuels. 7 For definition of eligible fossil CHP, some labelling schemes (as the Eugene Standard) require a re-

striction to natural gas, a certain overall capacity factor (e.g. 85 %) on an annual basis taking into ac-count power and heat production and CHP is eligible only up to a maximum limit of 50% of any con-sumption-based green electricity product. And only that part of electricity generation from natural gas-fuelled cogeneration is eligible, which is related to maximum heat production ("back pressure" operation).

22


Table 2: National legal framework and eligibility criteria of the analysed labels

Eligibility Criteria

Label Coun-try

National Frame-work conditions

for RES-E

Eligibility of plants receiving subsidies

under feed-in-systems or indirectly through an obliga-

tion scheme

Share of RES-E consumption of total electricity in 2004 (2010

target for coun-try)

Only RES-

E

Also fossil CHP

Umweltzeichen Richtlinie UZ 46 Grüner Strom

(AUT) Feed-In Tariffs for RES-E

(product should not be 100% from subsi-dized plants)

58.55% (78.10%) ☺

Bra Miljöval (SWE) Obligation scheme (eligible for supply offerings) 46.68% (60.00%) ☺

Norppa (FIN)

State aid granted on discretionary basis. Up to 40% in RES Projects. Tax subsidy for RES-E under 1 MW

(eligible for supply offerings) 28.76% (31.50%)

ok-power (GER) Feed-In Tariffs for RES-E

X eligible for supply offerings (but no con-tributions to addition-ality)

For fund offerings

Grüner Strom Label (GER) Feed-In Tariffs for

RES-E For fund offerings

9.86% (12.50%)

☺

Bollino Verde (ITA) Obligation scheme (eligible for supply offerings) 15.55% (25.00%) ☺

Milieukeur groene elektric-iteit

(NL) Bonus system (based on GoO) 4.75% (9.00%) ☺

Naturemade (SWI) Limited Feed-in Tariff for small scale producers

Distributor has to commit to “no double counting and selling of renewable benefit”

N/A ☺

Green-e (USA) N/A, depending on State legislation

X Not eligible in those States were RES is supported under quota systems

N/A

Green Power Programme (AUS) Obligation scheme X Not eligible N/A ☺

☺ = only RES-E are eligible = also CHP is eligible

* = in contribution based products CHP is eligible

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Table 3: Criteria for the different technologies under the eco-labels

Label Geothermal, wind, solar Hydro Biomass Fossil Cogenera-

tion

Umweltzeichen Richt-linie UZ 46 Grüner Strom (AUT)

Set out for different types of installations (run of river, storage, pumped storage)

Primary, secondary, agricultural, forestry all eligible, not sludge or landfill gas

Not eligible

Bra Miljöval (SWE)

Wind power, with additional criteria on loca-tion and decom-missioning

Plants until end 1995 eligible with criteria Maximum 95% of product.

Not GMOs, FSC-labelled forest fuels, waste biomass only if more than 90% biomass and free from dangerous substances

Norppa (FIN)

An audit of the plant and an action plan to reduce ecological impacts are compul-sory

Primary, secondary, agricultural, FSC-labelled forestry all eligible, sewage and biogas also

ok-power (GER)

From re-commissioned or upgraded pants or from new run-of-river plants

Primary, secondary, agricultural, forestry all eligible if certified, not sludge or landfill gas

Only from high efficient gas-fired CHP; Allowed, up to 50% of the product with emission limits


PV<5 MW <5MW plants <20MW

Bollino Verde (ITA) Run-of-river under 50 MW. Maximum of 20%

<30 MW Not allowed

Milieukeur groene elektriciteit (NL)

Max 15 MW plus additional require-ments

Minimum installation standards (also on emis-sions) above national regulations

Not allowed. Co-firing possible with strict stan-dards.

Naturemade (SWI) EAWAG Greenhydro criteria

Organic waste, wood and agricultural biogas allowed

Not allowed

Green-e (USA) <30 MW or Low Impact certified

At least 50% of the product is from RES-E

Green Power Pro-gramme (AUS)

New plants with large scale impacts not eligible

Primary, secondary, agricultural, forestry if certified, all eligible, not sludge or landfill gas

Not allowed. Co-firing possible

= Only legal compliance

As can be concluded from this table and Figure 1 below, there is a clear relationship between the maturity and development of a technology and the development of strin-gent criteria for a technology to be eligible to be eco-labelled. Hydropower and biomass plants are the ones that have to fulfil in most cases criteria over and above national leg-

24


islation. This fact is also related to the issue of additionality as will be described in sec-tion 3.2.

Figure 1: Share of renewable electricity (%) in European countries with green electricity labels (2003)

010203040506070

Austria

Finland

German

yIta

ly

Sweden

Netherl

ands

Switzerl

and

Hydro Wind Biomass and renewable wastes Other sources Solar Geothermal

Source: IEA Statistics

Analysis by technology

a) Geothermal: Due to the lack of development of this type of resource in most of the analysed countries (with the exception of Italy, with 95% of EU capacity, and Aus-tria and Germany with small developments) normally there are no specific criteria over and above national legislation requirements.

b) Wind: This technology has reached in most countries its maturity. With over 34.366 MW installed in the EU by the end of 2004 (of which 16.629 MW in Germany), its importance in the electrical market is starting to be comparable with more estab-lished RES-E technologies like hydropower. Resulting from this criticism at local or regional level is arising mostly because of the impact that the rapid deployment of the wind sector is having on the landscape and protected areas. Therefore, even if the impacts on the environment are much lower than for conventional technologies, some labels are starting to develop criteria for this type of plants that are over and above national legislation requirements. This would be the case of the Swedish Bra Miljöval label.

In the rest of labels there are no specific criteria over and above national legislation requirements.

c) Solar electric: Due to its low deployment in most of the analysed countries (with the exception of Germany with 78% of total EU capacity in 2004) and low impact on the environment once installed, this technology has no specific criteria over and

25


above national legislation. In fact, some labels include requirements to include a certain amount of solar in the eco-labelled product.

d) Hydropower: As it is the oldest renewable technology for electricity generation, and in some countries even the leading technology in the electrical market (Sweden, Austria, Switzerland), under most labels hydropower plants are eligible only if they fulfil basic ecological requirements at local scale, so that the river system’s principal ecological functions are preserved. In addition eligible power plant might be re-quired to invest a fixed payment per kilowatt hour of green electricity sold, for re-storing, protecting or upgrading the environment in the catchment area used by the plant in question. Furthermore green power labels might apply specific rules for new or expanded power plants. A detailed discussion of such hydropower criteria is provided by a report on hydropower criteria which has also been produced in the scope of the CLEAN-E project (Markard/Vollenweider 2005).

In some countries the only requirement for hydropower plants is not to exceed a certain size of installed power, as it is considered that bigger plants have a more sig-nificant impact on the environment than small power plants and also, are quite fi-nancially viable in most cases.

e) Biomass: Together with hydropower, biomass sources have, in many of the ana-lysed labels, the most developed criteria exceeding national legislation, specially in those countries with important biomass resources as Finland and Sweden. Normally primary and secondary biomass is eligible, while urban biomass waste and sewage gas might not be eligible in some cases. And in most cases incineration of non-separated waste is not eligible.

A detailed overview of such biomass criteria as applied by existing green power la-bels is provided by the report on biomass criteria which has also been produced in the scope of the CLEAN-E project (Öhme 2006).

f) Natural gas-fired cogeneration (supply offerings only): Some of the labels accept natural gas-fired CHP up to a maximum limit of 50% of a consumption-based green electricity product. Generally, only that part of electricity generation from natural gas-fuelled cogeneration is eligible, which is related to heat production. The co-generation part must have, in most cases, an energy conversion efficiency of at least 85%, over the average of the year. The eligible cogeneration plant must also comply with stringent air emissions quality criteria.

3.2 Additionality

The green electricity market can be regarded as voluntary support mechanism for re-newable energy. For that reason consumers that switch green electricity products expect a positive effect on the environment which results from their purchase decision. In order to ensure this effect, several green power labels apply the concept of additionality. Ad-ditionality is given where the green product results in an improvement for the environ-ment, additional to the baseline of ‘business-as-usual’. For instance, this can be ensured by the expansion of green power generation over and above the baseline defined by

26


existing sources and public support (In this cases “additionality” is defined by the part of the eco-labelled green electricity product that comes from “new” plants.). If green electricity products would exclusively be fed by electricity generation from existing old plants, then the effect of the decision of the green customer is simply to decrease the renewable content in the electricity supplied to other customers: The "green" customer would receive the "green" part of a suppliers portfolio, the "normal" customers would receive the residual.

Due to the national systems that support RES-E, in many of the analysed countries it would not be acceptable for consumers to pay a premium for electricity generated from plants that have received, or are receiving, public funding, since these plants have al-ready been funded through their taxes or their electricity bills. Thus, for several of the green electricity labels, additionality is ensured for consumption based tariffs if the electricity generated is over and above the required to meet existing legal obligations (e.g. the quota put on all electricity suppliers in the scope of an obligation scheme) , or does not receive any state subsidies (e.g. under a feed-in tariff system).

Additionality could also be created by lessening the environmental impact of existing green power plants (e.g. hydropower or biomass plants), additional to standard legisla-tion. In this respect some labels (e.g. the Swiss label Naturemade star, see section 7.14) focus additionality on the improvement of the environmental performance of those plants which contribute to a labelled green electricity product.

The combination of both additionality concepts is also possible which means new plants and existing plants with improved environmental performance contribute to additional-ity. The issue of whether new or old plants are eligible for labelling is very much de-pendent on the status of renewable electricity generation in each country and on the dominating technology. Countries with already high shares of renewable energies, mostly hydropower, (e.g. Austria, Sweden, Switzerland) are tending to improve the environmental performance of existing plants rather than focusing on building up new facilities. In contrast, in countries with low shares of renewable electricity production, labels are mainly designed with the objective to improve the environmental perform-ance of the overall electricity system by raising the share of renewable energies.

It is important to mention that existing facilities are very important for the development of the green electricity market. During the start-up phase of the market, only existing plants can supply green electricity. Existing plants are also important for a competitive pricing of green electricity since existing plants like large hydropower plants are able to generate green electricity with low prices. However, it is arguable that these plants do not need special support by green electricity marketing to survive on the electricity mar-ket, whereas new plants do need additional support.

For the design of criteria for new / old plants the following variables apply:

(a) the definition of what is old, what is new .

(b) the share of new plants

27


The elections between these variables are interdependent. A required share of x % new plants is only viable with a definition of new plants which is based on a specific date e.g. the introduction date of the label or the date of the liberalisation of the electrical market (wholesale or retail market).

The issue of additionality is the main differentiating characteristic between the analysed labels and clearly creates two categories of labels with two more or less clear objec-tives: labels without additionality requirements can be broadly seen as Guarantee of origin which is mainly intending to be an environmental marketing tool for the promo-tion of green electricity sales and to raise awareness among consumers on renewables, while labels with “additionality” requirements have also the objective to increase the amount of RES-E put on the market or environmental the performance of existing power plants.

For a comparative table regarding additionality requirements consult Table 5 in section 5 regarding the compatibility of the different labels with the Eugene Standard.

3.3 Administration of the Labelling Schemes

Each labelling scheme has its own system for the administration of the label which to a certain extent is depending on national legislation. For the purposes of this study the interaction between the labels and existing EU, national or international schemes for certification of green electricity has been analysed. This comprises an analysis to which extent and how the Guarantee of Origin for RES-E (resulting from EU Directive 2001/77/EC) and/or the certificates deriving from the EECS/RECS8 system have been incorporated by the analysed labels. For other, more specific details of the administra-tion of each label please consult the country reports in section 7.

According to European Union legislation on electricity from renewable sources (2001/77/EC) all Member States have to put in place, by 27 October 2003, a system to guarantee the origin of electricity from renewable sources. Under the Directive the issu-ing of a Guarantee of Origin, on request, that specifies the energy source, date and place of production, and (for hydropower) the capacity of the installation, has the purpose of enabling producers of RES-E to demonstrate that the electricity they sell is from renew-able sources.

In theory and under the provision of a comprehensive implementation, a Guarantee of Origin (the same applies to a RECS certificate) could be used as tracking tool in the scope of a green electricity label. In practice, given that many Member States did only a minimum compliance implementation when setting up their GoO system several prob-lems arise from the interface between labelling schemes and the respective GoO sys-tems. A detailed discussion of this interface including an assessment of potential syner-

8 In this context it has to be noted that EECS certificates represent Guarantees of Origin. The EECS

system aims at providing a common standard for the issue, transfer and redemption of Guarantees of Origins. The EECS system has been developed by the Association of Issuing Bodies as a further de-velopment of the RECS system.

28


gies will be provided by the WP5 report in the scope of the CLEAN-E project (Ölz et al. 2006).

Table 4 shows to which extent and under which circumstances currently Guarantees of Origin and RECS certificates have been integrated in the scope of the analysed green electricity labels. At the moment, only two labels accept GoO as proof of origin, but this situation is mostly due to the implementation design many Member States have chosen for their national GoO systems (see above). RECS is accepted by some of the labels but the information contained in the certificates is not sufficient.

Table 4: Use of certificates and Guarantees of Origin by the different labels

Label Use of Guarantees of Origin Use of RECS certificates Umweltzeichen Richtlinie UZ 46 Grüner Strom (AUT)

Must be submitted for every final consumption of RES-E Not eligible

Bra Miljöval (SWE) Not used Can be used as proof of origin but for some technologies addi-tional information is required

Norppa (FIN) N/A Not eligible

ok-power (GER)

Not accepted as sole proof of origin but in order to avoid dou-ble counting: Submission of GoO or Confirma-tion of the plant operator that no GoO has been issued for the re-spective electricity volume

Can be used as proof of origin but in most cases additional plant specific information is required

Grüner Strom Label(GER) not relevant (pure fund model) not relevant (pure fund model)

Bollino Verde (ITA) Not eligible Can be used.

Milieukeur groene elek-triciteit (NL)

GoO are the sole proof or renew-able origin for green electricity offerings under Dutch law (does also apply to imports).

Not relevant

Naturemade (SWI) N/A Can be used as proof of origin but for some technologies addi-tional information is required

Green-e (USA) N/A N/A

Green Power Programme (AUS) N/A N/A

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4 Market impact of the analysed labels

The following table shows the principle market potential of green electricity and the actual amount of eco-labelled green electricity.

Figure 2: Market potential of green power

2186 400 690 67

65003665

3060

10000

20000

30000

40000

50000

60000

70000

80000

Austria Finland Germany* Italy Sweden Netherlands** Switzerland

Sold ecolabelled GE compared with total GE production (GWh - 2002)

Total renewable electricity production Ecolabelled GE

Source: EUROSTAT and Label analysis (see section 7) * Germany: Sum of the two labels analysed ok power and Grüner Strom Label ** Netherlands: Total sales of labelled (WWF) green electricity in 2002 (Source: Ecofys), the Milieukeur label was not operating at that time. With the exception of the Netherlands (were in fact after 2002 the amount of sold green electricity has soared above local production prompting the import of large quantities of green electricity from other EU countries), the rest of the countries in principle still have a great potential to increase the amount of labelled green electricity on the market. However this potential is limited as soon as the concept of additionality is applied (see section 3.2). Furthermore it has to be noted that in several countries (e.g. Austria, Ger-many) public support instruments have been that designed that RES-E which has re-ceived funding through the system is mandatorily distributed among the market, e.g. to all companies supplying final customers. In such cases only limited RES-E volumes might be available to the voluntary market.

In addition to that it must be taken into account that for the moment, demand of labelled green electricity is still not the key driving factor for increases in installed renewable capacity. It is rather the public support framework (e.g. feed-in systems, obligation schemes, investment support,…) applied by Member States which is the main stimulus for the expansion of renewables in the electricity sector. However green power labels, provided they apply the concept of additionality, have the potential to contribute to a limited share to the expansion of RES-E generation above what is initiated by public support instruments.

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5 Compatibility with the Eugene Labelling Standard

Eugene has developed a meta-standard for green electricity to which national green electricity labels can be accredited, provided they meet this minimum standard. The main elements of the Eugene Standard are Eligibility, Additionality and Independent Third Party Verification. Table 5 shows the compatibility of the analysed green electric-ity labels with this standard.

Table 5: Compatibility of the analysed green electricity labels with the Eugene Standard

Label Compatibility with re-quirements concerning

Additionality

Compatibility with re-quirements concerning

Eligibility

Umweltzeichen Richtlinie UZ 46 Grüner Strom (AUT) Not included in the criteria.

Further criteria for biomass and hydropower would need to be developed

Bra Miljöval (SWE) Weak. Only in products based on hydro at least 5% must come from other sources

Further criteria for hydropower would need to be developed

Norppa (FIN) Weak. Only in products based on hydro at least 5% must come from other sources


ok-power (GER)*


Bollino Verde (ITA) Not included in the criteria. Would need to be developed


Milieukeur groene elek-triciteit (NL)

Not included in the criteria (only for imports). Would need to be developed


Naturemade (SWI)*

Green-e (USA) Not included in the criteria. Would need to be developed


Green Power Programme (AUS)

significant additionality ele-ments included

Further criteria for hydropower would need to be developed

*Accredited against the Eugene Standard As can be implied from the table the main differences between the non-Eugene accred-ited labels and the Eugene Standard are to be found in the question of 'additionality' and in the eligibility criteria for hydropower and biomass.

31


6 Conclusions

• The criteria that most clearly set apart labels are the ones related to additionality and to hydro and biomass power plants. In this context legislation regulating public sup-port to renewables is an important factor shaping the design of a label.

• Most green electricity labels do not include criteria about additionality. Rising de-mand for products certified by labels with no additionality requirement do not auto-matically lead to an expansion of RES-E generation above what is initiated by pub-lic support.

• In countries with comprehensive public support for RES-E (e.g. through feed-in systems or obligation schemes) green electricity labels are not designed to compete with these systems but have a complementary role more focused on facilitating the financial viability of less mature RES-E technologies like solar PV or biomass, of energy sources out of the scope of the respective support instruments and on im-proving the environmental performance of existing plants, specially hydropower plants.

• Due to the high margin existing between potential sales of green electricity and ac-tual sales of eco-labelled green electricity, for the time being most labels can be broadly considered as marketing and awareness raising tools or an instrument to prove the origin or composition of a green electricity product.

• The potential and synergies of fully integrating Guarantees of Origin and/or RECS certificates in the scope of green electricity labels has not been fully exploited yet; in the case of GoO mostly because of the design Member Stats have chosen for their national GoO systems; in the case of RECS as RECS does not provide all informa-tion required to prove compliance with the criteria of many labels.

• Most green electricity labels, other than those accredited under Eugene, would need to introduce additionality and complementary hydropower and biomass criteria in order to be fully compatible with the Eugene Standard.

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7 Overview of existing and intended green power labelling schemes

EU 25 countries

7.1 AUSTRIA

Heidi Adensam, Markus Meissner (Österreichisches Ökologie Institut)

7.1.1 Introduction

Austria has a long tradition in RES-E production due to its geographical position in the Alps. Hydropower has been and is still the main source of electricity production. The following figure shows the structure of electricity supply.

Figure 3: Austria - Total electricity supply in Austria 2004 by energy source

total supply 2004

39.462 GWh

24.231 GWh

16.629 GWh

104 GWh

941 GWh

hydro thermal wind, solar others Phys. Import

Source: E-control, 13.07.2005, http://www.e-control.at/ Zahlen, Daten, Fakten → Betriebsstatistik 2004 → Monatliche Bilanz der Elektrischen Energie.

More than 2/3 of total electricity supply go to final consumption, the remaining 1/3 con-tains losses, own consumption, exports and the electricity used for pump storage sta-tions. Half of the total supply is produced by hydro power plants, about 25 percent come from thermal plants and 20 percent is imported.

The electricity market in Austria has been fully liberalised in Oct. 2001. The liberalisa-tion of the whole sale market took place in Feb. 1999 (consumption > 40 GWh). The support of the generation of renewable electricity is regulated in the Green Electricity

33

http://www.e-control.at/


Act, which was passed by the Austrian Parliament in July 2002. Today there are about 13 suppliers offering approximately 20 green electricity products in Austria.9

In accordance with the Green Electricity Act, by 2008 at least 9 percent of the electric-ity supplied to final customers in Austria is to be generated in small-scale hydropower plants (< 10 MW) and 4 percent in other government-subsidised plants (mainly wind power and biomass, eligible are also photovoltaic and geothermal energy, explicitly excluded are mixed incineration of household waste, animal bone meal sludge, waste liquor).

Nation-wide feed-in tariffs have been specified. Tariffs range between 2,6 Eurocent per kWh and 60 Eurocent per kWh depending on the energy source, the plant size and tech-nology.

The Feed-In Regulation10 lays down tariffs for new plants11, which got the construction permit until 31.12.2004 and which will be set into operation until 31.12.2007. Tariffs are granted for at least 13 years and financed by two mechanisms:

• Retailers settlement price: supported RES-E power is redistributed equally shared to retailers. Every retailer receives green power in amounts based on the past year’s sales, and must pay 4,5 cent/kWh (settlement price). Every retailer in Austria re-ceives the same proportion of green electricity, prorated according to sales.

• End-users surcharge: End-users are charged by the "green power balancing group support contributions" depending upon the grid level they are connected. The sur-charge is up to 0,30 Cent/kWh.

Figure 4 shows the share of support for RES-E, with the smallest support effort for small hydro power plants an the highest support effort for photovoltaic. Feed in tariffs are only paid if the total amount of electricity (beside own use) is fed into the public grid, so in Austria governmental support by feed in tariffs and direct marketing of green electricity at the same time is not possible.

As the compensation for RES-E support has been much higher (because of higher growth rates of RES-E-power plants, especially wind energy) than expected and budget is overdrawn green electricity act will be revised at the moment. A proposal for an amendment of the Green Electricity Act has been presented in July 2004, however it failed to pass in December 2004. The main changes concerning additionality will be the introduction of a cap for spent compensation per year for new contracted plants: Euro 17 Mio. per year will be spent on new RES-E-plants contracted in the respective year (a very severe decline of budget - if the draft will be accepted) and a tender system for wind power plants. That means that not every eligible RES-E-plant will receive the supported feed in tariffs and so direct marketing becomes interesting for RES-E-plants.

9 For more details see the overview in

http://www.oekoweb.at/neu/default.php?uljs=/neu/infoebenen/topthemen/strom/tabelle.html10 Regulation of the Minister of Economic Affairs and Labour by which the prices for the purchase of

electricity from green plants are laid down (Federal Law Gazette II no. 508/2002). 11 "New plants" comprise plants for which the construction permits have been given after 31.12.2002.

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http://www.oekoweb.at/neu/default.php?uljs=/neu/infoebenen/topthemen/strom/tabelle.html


Figure 4: Austria - Electricity price composition, 2004

Source: Schönbauer, C.: Energieproduktion, Exkurs Ökostrom, power point presentation 01.04.2005, http://www.e-control.at/ 13.07.2005, Ökostrom → Downloads

7.1.2 Green electricity product labels

7.1.2.1 Umweltzeichen Richtlinie UZ 46 Grüner Strom

Background

The Umweltzeichen (‘environment sign’) was introduced in 1990 by the Austrian Envi-ronment Ministry (Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft, BMLFUW, or ‘Lebensministerium’ in short). The label was set up to motivate manufacturers and suppliers to develop and sell products that were less de-manding on the environment. Through the introduction of such labelling, the market would push towards more environmental friendly products and services.

The label is awarded to the tourism industry, schools and products in a number of cate-gories: building and interior, office and printing, household, garden, and renewable electricity.

Products with the Umweltzeichen have to comply with a number of environmental cri-teria, including raw materials, energy use, emissions, waste and toxicity of the materi-als. Products are also screened on their usefulness and quality before being awarded the Umweltzeichen. These criteria are applied to the product itself, packaging, manufacture

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http://www.e-control.at/


and delivery. Independent verification of the product’s or service’s compliance with these criteria is required (GREEN-X 2003) At the time of writing the Umweltzeichen for renewable electricity (Umweltzeichen – Grüner Strom, UZ 46) is given to: Alpen Adria Natur Energy GmbH (product: Alpen Adria Naturstrom Plus) and Okeostrom AG (product: oekostrom©).

Label criteria

Although “Umweltzeichen –Grüner Strom” is a product label also criteria concerning the supplier/retailer are defined. To obtain the registration as “Grüner Strom” (Green electricity) the energy-supplier may not deal with electricity produced by nuclear or fossil fuels.

Label criteria are set by the Austrian Environmental Ministry. An advisory board that is amongst others composed of staff members of ministry, unions and the Austrian Federal economic chamber authorises the VKI (association of consumer information) to develop new or revised guidelines. The VKI develops a draft version of guidelines, discusses the draft in an expert committee (amongst others composed of different stakeholders like NGO´s, representatives of research, laboratories) and forwards a consensual agreed draft version of guidelines to the advisory board. The advisory board examines the draft, possibly adapts the draft and then forwards the draft to the minister. The minister then comes to a decision whether to accept the draft and adopt new guidelines or to re-fuse the draft or to make some adaptations in the existing draft and than adopt new guidelines.

Eligibility

There is no fund model included, only supply models are allowed. Eligible energy sources for “Grüner Strom” are wind, hydropower, solar, biomass and geothermal en-ergy. The composition of Green energy has to contain at least 1 percent photovoltaic and maximum 79 percent hydropower.

Requirements for hydropower are set out for different types of hydropower stations (run-of-river, storage, pumped storage). There are several requirements due to for ex-ample residual flow.

Related to biomass the most important question is the source of biomass. Primary bio-mass (plants without chemical conversion), secondary biomass (after one utilisation step e. g. industrial kitchen residues), agricultural biomass (by-products and residues), biomass from forestry and products of biomass (biogas, fuel wood and so on) are eligi-ble, sludge and landfill gas for example are not.

Concerning the efficiency of power plants only qualitative criteria are included in the guidelines: thermal processes must use waste heat as efficient as possible.

The proportion for fossil fuel, e.g. during the start up may not exceed 5 percent, calcu-lated for one year.

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Additionality

Additionality is not explicitly mentioned. A requirement for new plants is not included in the guidelines. Additionality according to governmental support schemes is implicitly given because of the Austrian exclusive RES-E support scheme: suppliers are supported by feed in tariffs for the electricity from a plant only if they feed in the total amount of energy produced at this plant (beside own use)12, the electricity producers can decide either to sell the total electricity produced at a plant at feed in tariffs to the eco-balance-group (Green Electricity administrator) or to sell the total electricity from that plant on the market. The allocated portion of supported green electricity by the feed in system to the supplier can not be exclusively labelled by the Umweltzeichen Grüner Strom and the allocated portion of supported green electricity by the feed in system to the supplier must be distributed aliquot among all products offered by the supplier so it is not possi-ble, that a supplier creates a green power product which is mainly fed by RES-E which has received a feed-in tariff and has been allocated to the supplier through the feed-in system distribution mechanism.

Eligibility of imports

Imports are eligible if they meet the requirements.

Recognition of RECS certificates

RECS are not eligible in the scope of the label.

Interface to Guarantee of Origin for RES-E

GoO must be submitted for every final consumption RES-E. GoO must meet the re-quirements as defined in the Green Electricity Act and can be taken from the GoO data-base of E-Control, from an authorised laboratory or from an equal and by the E-Control accepted GoE system13.

Organisation of the labelling process

The “Umweltzeichen” is awarded by the Austrian Environment Ministry that acts as labelling body. The licensee signs a contract with the ministry due to the right to use the sign for all or some of its products.

The VKI (association for consumer information, Verein für Konsumenteninformation) is commissioned and authorised to handle the procedure. After the transfer of the appli-cation form, the VKI delivers a list of authorised consultants, where the licensee has to be audited. Consultants became authorised by VKI and the Ministry.

12 The idea was to support the built up of new RES-E plants by higher achievable electricity prices due

to the Umweltzeichen Grüner Strom. 13 Which laboratories are authorised and which GoE systems are accepted decides the Austrian Envi-

ronmental Ministry on advice of VKI (association for consumer information) and E-Control (Electric-ity market Regulator in Austria).

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A positive report leads to the award of the supplier by the ministry. After a four year period a new supplier-audit has to be performed. If there are any changes in the guide-lines during this four years the audit has to be performed earlier.

A yearly audit of confirmation to guidelines must be performed by an accredited labora-tory that controls buying, whole sale and retail activities, own use and contracts con-cerning supply and demand for electricity. GoO must be submitted for every final con-sumption RES-E (see also “Interface to Guarantee of Origin for RES-E”).

The labelling fees depend on the annual sales (see table below.)

Table 6: Austria - Labelling fee (Umweltzeichen –Grüner Strom)

Annual sales Euro Labelling fee Euro

Up to 145.000 145

145.000 - 725.000 580

725.000 - 2.180.000 1.160

2.180.000 - 3.630.000 1.450

> 3.630.000 1.810

Market Impact

About 0,035 percent of the final electricity consumption in Austria is accredited by the “Umweltzeichen Grüner Strom”. This is a very small portion of the total electricity market because of the exclusive feed in regulation of governmental supporting scheme. Two of three possible suppliers are licensees of “Umweltzeichen Grüner Strom” (“Un-sere Wasserkraft14” is not licensee). 70 percent up to 80 percent of customers changing the electricity supplier choose green electricity labelled by “Umweltzeichen Grüner Strom”.15

Eugene compatibility

The “Umweltzeichen Grüner Strom” is so far not compatible with the Eugene Standard. Additionality is not part of the “Umweltzeichen Grüner Strom” guidelines. Criteria for biomass and hydropower would have to be revised.

14 “Unsere Wasserkraft” is a supplier in Austria, with 100 percent of its electricity supplied to final cus-

tomers coming from Austrian hydropower plants. 15 Source: tel. interview with Andreas Peter 20.06.2005 and 28.07.2005

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7.2 DENMARK

Johan Kling (Swedish Society of Nature Conservation)

7.2.1 Introduction

The electricity market in Denmark started deregulated in 1999. The production of elec-tricity in Denmark includes a large degree of fossil fuels, especially gas and coal. Total electricity production in Denmark 2005 was 36,4 TWh. Wind power contributed 6,7 TWh, hydropower and solar power 24 GWh and CHP with RES-E fuels (biomass, bio-gas etc.) 3,2 TWh. The wind power development in Denmark has been very successful and wind power represents 20% of the total production today. Most of this increase of wind power was achieved between 1997 and 2002.

Denmark has been using production boni as the main policy instrument and based on the report by the EU Commission (SEC 2005.1517), the system has been highly effec-tive. Different to a normal feed in tariff scheme the bonus can be regarded as an add-on on top of the normal electricity price. The bonus system is very close to a feed in tariff but varies between different production types. In general old technologies receive low boni whereas immature productions types get a high bonus.

In 2004, the new government in Denmark changed parts of the bonus system. In the new system, boni for on-shore wind power and RES-E from biomass have been re-duced.

The present support system includes mainly the following boni:

● Wind power, onshore, with minimum size of 25kW connected by the owner, feed-in tariff at 80 €/MWh

● Other wind power, onshore, production boni, 13,4 €/MWh + 3,1 €/MWh for compensating balancing costs. If the reference price set by Nordpool exceeds 35 €/MWh, the first bonus is reduced.

● Biogas in CHP 35 €/MWh

● Biomass 13,4 €/MWh

● other RES-E 13,4 €/MWh

In addition to this bonuses, RES-E producers do not pay transmission costs beyond the connection costs.

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7.2.2.1 The Bra Miljöval label

The ‘Bra Miljöval’ label, described in greater detail in the Sweden section (see 7.10), is also used in Denmark.

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7.3 ESTONIA

Gianluca Ruggieri (eERG)

7.3.1 Introduction

More than 90% of electricity in Estonia is produced by Eesti Energia. Eesti Energia is a state owned power production, transmission and distribution company of the Republic of Estonia.

The energy production from renewable energy sources in Estonia for 2003 was about 18 GWh, 0.5 % of the country’s total energy production. About 94% of electricity con-sumed in Estonia, was produced from local fuel oil shale. Since the target for RES share in 2010 is 5.1 %, a strong effort is needed by all market actors in the next few years to meet this objective.

The new Energy Law was approved in 1997 and opened new opportunities for renew-able energy. It obliges Eesti Energia to buy electric energy from small renewable elec-tricity producers at the cost of 90% of the electricity price for household consumers.


7.3.2.1 Roheline Energia

Background

In order to comply with the new obligation, Eesti Energia has launched a Green Energy Programme in co-operation with Estonian Fund for Nature, attracting various firms to promote renewable energy applications through the purchase of RES Electricity at a higher price.

Label criteria

Roheline Energia (Green Energy) brand-name identifies energy produced mostly by small independent generators from water and wind, which is bought by Eesti Energia and resold on the local market. The brand has been developed and marketed in co-operation with the Estonian Fund for Nature, whose mission is the protection of the he-reditary values of the Estonian nature and the promotion of sustainable development.

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Organisation of labelling process

The Green Energy User's Certificate verifies that its owner has made a monetary contribution to cover the purchase and marketing costs of a certain annual amount of renewable energy, plus a donation in the amount of 10 Estonian cents (0.64 Eurocent) per kWh to the Estonian Fund for Nature for the financing of its priority activities.

The profit from the sales of Green Energy User's Certifi-cates will be allocated to a special fund established by Eesti Energia. The allocations will be used for financing the projects related to the development of the production, distribution and supply of energy produced from renew-able energy sources.

Precise accounting is kept regarding the quantities of Green Energy. The amount of Green Energy sold per year does not exceed the amount of renewable energy sold via the Eesti Energia Jaotusvõrk (distribution network). Thus it is guaranteed that every Green Energy kilowatt-hour sold is actually covered with renewable energy.

Market Impact

In the financial year 2005/06, Eesti Energia sold 2.524.800 kWh of Green Energy. The sales volume has reached a stable level. Green Energy certificates were sold as follows:

• RE I category certificate, 120.000 kWh renewable energy per year – 7

• RE II category certificate, 60.000 kWh renewable energy per year – 13

• RE III category certificate, 6.000 kWh renewable energy per year – 122

• RE home client certificate, 1.200 kWh renewable energy per year – 144.


Introduction of eligibility criteria for large hydropower and environmental additionality would be needed to consider a possible compatibility to the Eugene Standard.

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7.4 FINLAND


7.4.1 Introduction

The Finnish electricity market was gradually opened up for competition with the Elec-tricity Market Act (386/1995). Since the autumn of 1998, it has been possible for all electricity consumers, including households, to arrange tender competitions for their electricity purchases. The electricity market reform also allows the so-called green elec-tricity trade. Nowadays a major part of the wholesale trade in electricity takes place at the Nordic Power Exchange Nord Pool, whose ELSPOT market price sets the electricity market price in the Nordic countries.

Besides the power exchange, electricity is traded on the so-called OTC market and di-rectly between the buyer and the seller. Development of the forms of electricity trade has resulted in variations in the price of electricity on the Nordic electricity market ac-cording to the hydropower production capacity, which is dependent on rains, and to the electricity consumption rate.

The smaller-scale electricity consumers connected to distribution networks, such as small enterprises and households, buy their electricity from retailers. The majority of the retailers also act at the same time as local distribution network companies, but the buyers of electricity are not bound to a local vendor, but can buy their electricity from any vendor they like.

The renewable energy sources account for one quarter of Finland's total energy con-sumption and in power production their share is close to 30 %. Bioenergy - particularly wood and wood-based fuels - and hydropower are the most important forms of renew-able energy in Finland.16

Brief overview of main support instruments for RES-E in Finland

Promotion of renewable energy sources is based on a specific action plan, which was completed in 1999. It aims to make the energy produced from renewable sources of energy competitive on the open market. On September 2002 the Ministry of Trade and Industry set up a working group for preparing the revision of the action plan for renew-able energy sources. The working group proposes that the use of renewable energy should be increased by 30% by the year 2010, compared to the year 2001. The vision is that by 2025 the renewable energy sources would be used approximately 2/3 more than at present.

Among main actions are development and commercialisation of new technology and financial steering instruments, such as energy taxation, investment aid and subsidies for

16 See the picture on page: http://www.ktm.fi/index.phtml?menu_id=179&lang=3&fs=10.

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http://www.ktm.fi/index.phtml?menu_id=179&lang=3&fs=10


the production chain of forest chips. Various statutes, regulations and agreements, as well as information dissemination and education and training are also important means.

Energy aid

Energy aid is granted by the State on a discretionary basis. Energy aid is aimed to steer the choices of energy production and use to a direction that emits less carbon dioxide. Aid may be granted within the spending limits of the State Budget. In 2003 a total of 31,2 million € is earmarked for energy aid. The Action Plans of the EU Structural Funds are also utilised in promoting the conventional investments in bioenergy and other re-newable energy sources.

Companies and corporations are eligible for energy aid. For instance, municipalities, parishes and foundations are considered corporations eligible for the aid. The aid is not granted to residential real estates, public bodies, farms, establishment projects receiving State aid or to private individuals.

The share of energy aid of the eligible costs may be no more than:

• 40% in energy audits, energy analyses and in other study projects

• 40% in investment projects regarding wind or solar energy

• 40% in investment projects concerning renewable energy or energy conservation based on new energy technology

• 30% in other investment projects concerning renewable energy or energy conservation

• 30% in investment projects of energy production or investment projects reducing environmental hazards

• 25% in investment projects promoting the security and versatility of energy supply.

Municipalities, joint municipal boards and Regional Councils may obtain a 10% raise in the aid for energy audits, energy analyses and other study projects when the project is related to tending to municipal duties. Aid can be granted for investment and study pro-jects that:

• increase the use of bioenergy, such as wood (district heating centres and power plants)

• increase the production and processing of indigenous fuels (chippers, pellets, recycled fuels, biogases)

• promote energy conservation or improve the efficiency of energy production or use

• promote the production or use of other renewable energy (solar and wind power, small-scale hydropower, heat pumps)

• reduce the environmental hazards caused by energy production or use

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• otherwise enhance the security and versatility of energy supply.

Priority is given to projects promoting the commercialisation of new technology.

Energy taxation and tax subsidies

Electricity is taxed at its consumption stage. The fuels used for power production are tax-free. The tax on electricity is divided into two classes, of which the lower, class II, tax is paid by industry and professional greenhouse cultivation. Other consumers pay the higher class I tax. The energy taxation scheme also includes various subsidies. Of these, the most important ones in terms of energy policy are tax subsidies paid for power production based on renewable energy sources. The Ministry of Finance is re-sponsible for energy taxation legislation. The National Board of Customs and the re-gional Customs Districts are in charge of tax collection and payment of tax subsidies.

The subsidies for power production were introduced in connection with the tax reform in 1997. Then a change from taxation on production fuels over to taxation on electricity consumption was effectuated. The aim was to compensate with a so-called small power plant aid the weakening of the competition position that the small power plants using renewable energy and peat had to face. The tax subsidy model thus established has later been utilised more generally as a means to promote electricity produced with renewable sources of energy in particular. The aid was last extended from 2003 onwards and at present it covers nearly all power production based on renewable energy sources, except for large hydropower.

Since the beginning of 2003, wind power, hydropower below 1 MVA, electricity pro-duced with wood and wood-based fuels, recycled fuels and biogas, as well as electricity produced with peat at district heating power plants of below 40 MVA are eligible for the subsidies.

Electricity produced with the waste gases from metallurgical processes and the reaction heat from chemical processes has been accepted within the scope of the aid, because these sources of energy can be considered equal to renewable energy sources in regard to their carbon dioxide effects.

Since the beginning of 2003 the amount of the tax subsidy is no longer linked to the electricity tax classes. In 2003 the tax subsidies have three levels: the subsidy for wind power and electricity produced with forest chips is 0.69 cents/kWh (cent per kilowatt hour), for electricity produced with recycled fuels (municipal waste!) 0.25 cents/kWh and for others 0.42 cents/kWh. In 2003 a little over EUR 50 million is paid as taxation subsidies for power production.

The Finnish national law provides that all tax subsidies are in force until further notice. However, State aid requires approval by the European Commission, which the Commis-sion gives for a fixed period only. After the termination of this period, a new authorisa-tion must be applied for the aid. The Commission has approved the tax subsidies for power production in Finland until the end of 2006.

45


The Customs Districts handle the applications for energy tax subsidies and pay the sub-sidies. More information from the website of Ministry of trade and industry (energy department): http://www.ktm.fi -> English -> Energy


7.4.2.1 Norppa-ecolabel

Background

Suomen luonnonsuojeluliitto, SLL is the largest non-governmental organisation for en-vironmental protection and nature conservation in Finland. Its objectives include the promotion of sustainable production and consumption patterns and the protection of biodiversity.

Big part of the work is done on voluntary basis but SLL also employs over 30 people working in the headquarters, regional offices and in the Suomen Luonto periodical. The SLL has about 30.000 individual members in 203 local associations, organised in 15 regional districts. The Nature League (Luonto-Liitto) functions as a nation-wide youth organisation under SLL, it has about 4 000 members.

The SLL (in English: Finnish Association for Nature Conservation's, FANC) has oper-ated the Norppa-ecolabel since 1998. The primary objective of the ecolabelling system is to increase the sustainability of energy consumption and to improve public awareness of the environmental impact of energy production. Through the new Electricity Market Act (1998) companies of all kinds, as well as private consumers, can freely purchase their electricity from the power company of their choice. This means that everyone can decide what kind of energy they want to pay for. The electricity market for Norppa-ecolabelled electricity was opened on 1 September 1998. An eco-energy label means that the supplier can provide energy and services satisfying the Finnish Association for Nature Conservation's (FANC) recommendations. Criteria were tightened from the be-ginning of the year 2000, see the website: http://www.ekoenergia.info/pdf/criteria.pdf. Sales statistics: http://www.ekoenergia.info/ekoenergia/myyntitilasto/('Kotitaloudet' means households, 'Yritykset' means enterprises, 'Yhteistöt' means associations, etc).

A list of ecolabelled products is provided at: http://www.ekoenergia.info/english/products/

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http://www.ekoenergia.info/pdf/criteria.pdf

http://www.ekoenergia.info/ekoenergia/myyntitilasto/

http://www.ekoenergia.info/english/products/


Label criteria

Labelled product categories

Norppa-ecolabel labels supply offerings with electricity from renewable sources. The supply must be entered into the Nordic grid.

Eligibility

Ecolabelled electricity must originate from a renewable energy sources. The latter in-cludes the sun, wind, water and biomass. The supply must be entered into the Nordic grid. The motive underlying the ecolabelling of energy originating from renewable sources is to guide investments towards renewable energy sources but not, however, towards new hydroelectric power. Only a hydropower facility constructed prior to 1996 is eligible for the label. The nature conservation organisations have set 1995 as the limit, for it was in this year that the Swedish nature conservation organisation's Bra mil-jöval ecolabelling scheme for electricity was introduced. Under the scope of the Norppa label energy utilities marketing eco-energy are expected to invest in the future in further renewable energy production plants, product development, and the raising of the level of such energy in their own production profile. An exception is that of new hydropower construction, which is not supported by the nature conservation NGOs. In respect of hydropower, investments are required to be targeted at waterway restoration work. Companies are expected to keep to the emission limits set by the Finnish legislation and are recommended to use the best available technology.

Carbon dioxide emission reduction

The Finnish Association for Nature Conservation requires a multi-fuel power station to systematically reduce its carbon dioxide emissions (fossil fuels, including peat) during the period when these criteria are being applied. Reductions must apply to those multi-fuel power generation plants for which a company is seeking an ecolabel. An account of the targets, action taken, and the results of the latter are forwarded to the Finnish Asso-ciation for Nature Conservation. The results may be displayed e.g. on the Internet. The company may itself decide on the target level and measures. In the construction of new power stations the problem of carbon dioxide emissions must be given priority.


FANC has a contract on the mutual recognition of the criteria of ecolabelled electricity with SSNC and therefore accepting sources from the Nordic Countries.

Additionality

There are no specific criteria on additionality.


Presently there is no mechanism to include RECS certificates in the scope of the Norrpa ecolabel. Discussions about a potential inclusion are presently on-going.

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The Norppa label does presently not have an interface to the Guarantee of Origin. This will partly be dependent on the development of the national GoO scheme.


Labelling body

FANC is the labelling body. In addition the FANC has an Energy Advisory Board con-sisting of energy experts for further considerations. FANC acts as a third party organisa-tion which verifies the compliance of the product towards the Norppa label criteria. De-tails of the product offer by the company for which an ecolabel is being sought have to be submitted to FANC. FANC will supervise the environmental label scheme through its energy council experts.

Procedures

FANC supervises adherence to the terms of the ecolabel by requesting information from the companies using the label in conjunction with the annual audit. The auditor used by the company will have to check the information on the level of production and sales at the annual level. If an ecolabel is applied by a distributor, the latter must clearly indicate its sales volumes and also disclose where and how the kilowatt-hours to be environmen-tally labelled have originally been generated. When entering into an agreement with FANC as regards to the use of the label, a company must commit itself to providing the Association with an auditor's statement to the effect that the production/sales eligible for the ecolabel have satisfied all customers' demand (implementation of agreements made with the customers for the supply of labelled energy).

FANC supervises that the ecolabel is used properly for advertising. If the label is used by an energy intermediary, the origin of the labelled energy must be indicated. In asso-ciation with advertising, companies using environmental labels are expected to trans-parently inform people about the environmental impact of the energy production.

Market Impact

In 2005 the sales of Norppa-labelled electricity reached appox. 2 TWh.


Presently the Norrpa-label is not compatible with Eugene standard. With some changes regarding additionality the label should be compatible.

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7.5 GERMANY

Veit Bürger, Dominik Seebach (Öko-Institut)

7.5.1 Introduction

In 2004 a share of 9,3% of the total electricity consumption in Germany was produced from renewable energy sources (wind energy 4,2%, hydropower 3,5%, biomass 1,2%, photovoltaic 0,1%, others 0,3%) (BMU 2004). The renewable electricity market is mainly dominated by generation initiated through public support instruments, in par-ticular the Renewable Energy Law (EEG). That means that the mandatory RES-E mar-ket is dominating the voluntary market, which must still be regarded as a niche market. However the voluntary RES-E market is growing constantly e.g. with a growing rate of approx. 30% in 2001 and 2002 (Wüstenhagen/Bilharz 2004).

Today approx. 600.000 customers are supplied by one of the more than 130 green elec-tricity products offered on the electricity market. This amounts to an annual market vol-ume of approx. 2 TWh which corresponds to a market share of about 1,5% of the do-mestic sector. More than 50% of this market volume is held by two hydropower prod-ucts, Eon Aquapower and NaturEnergie Silber. Both products are fed by hydropower plants which predominantly have been put in operation long before the German electric-ity market was liberalised.

The Renewable Energy Law

The German feed-in system is regulated through the Act on Granting Priority to Renew-able Energy Sources (EEG). The EEG obliges a grid operator whose grid is closest to the location of an eligible RES device to a) connect the respective RES installation and b) buy electricity from the installation in accordance with fixed feed-in tariffs which are set forth in the law. Eligible sources cover hydro power plants (including refurbish-ments and upgrading of power plants up to 150 MW) 17 , biomass (< 20MW), wind power, geothermal energy, landfill and sewage gas and photovoltaic energy.

The feed-in tariffs are technology specific and depend on the capacity of the respective plants. For several technologies the EEG holds a degressive price element each year reducing the tariffs for installations which start operation in the respective year. The annual reduction factor varies between 1,5% for biomass and 5% for PV. For most eli-gible RES sources and technologies the feed-in tariffs are guaranteed for a period of 20 years beginning from the year the respective plant started to operate.

Encouraged by the EEG, power generation from EEG funded renewable energies is expected to rise from 3% (related to the total domestic consumption) in 2000 to 12% in

17 In these cases only the additional generation volume which results from the refurbishment or upgrad-

ing measure is eligible to the feed-in scheme.

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2008, according to the grid operators association VDN which is in charge of determin-ing these volumes.

Allocation mechanism for RES-E funded through the EEG

Paragraph 14 of the EEG regulates the so-called nation-wide equalisation scheme (see figure 4). As outlined above the local grid operators are obliged to connect eligible RES devices and to compensate them with the feed-in tariffs set forth in the EEG. The up-stream TSO which is operating in the respective area is obliged to purchase and pay compensation for these RES-E volumes which have been paid for by the local grid op-erators. In this respect generally all funded EEG volumes (physically) as well as all fi-nancial burden is transferred to the level of the TSOs.

By 30 September of each year, the TSOs determine the total volume of energy pur-chased in accordance with the above mentioned procedure and the share which this vol-ume represents relative to the overall electricity volume delivered to final consumers either directly by the operator or indirectly via downstream grids. If a TSO has pur-chased more RES-E than this average share (this is relevant to TSOs which cover areas with a higher RES penetration than the average), they are entitled to sell electricity to, and receive compensation from, the other TSOs, until all TSOs have purchased an elec-tricity volume which is equal to the average share mentioned above.

Utilities which deliver electricity to final consumers are obliged to purchase and pay compensation for that part of the electricity which their regular TSO purchased in ac-cordance with the above mentioned allocation mechanism. The respective volume that a utility has to purchase is related to the total electricity volume delivered to his final cus-tomers and is determined in such a way that each utility receives a relatively equal share.

Thus the total electricity volume supported through the feed-in scheme is distributed equally among all electricity suppliers, according to their total electricity volume deliv-ered to their final customers.

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Figure 5: Germany - Flow chart of the allocation mechanism of the German Renewable Energy Law.

The Guarantee of Origin for renewable electricity

The approach taken in Germany to implement the Guarantee of Origin (GoO) in accor-dance to the RES-E Directive (2001/77/EC) is not going little beyond the minimum requirements set forth by the Directive. Operators of RES devices can commission ac-credited environmental auditors18 to issue the GoO.

There are some specific characteristics regarding the design of the GoO system which are relevant for the interaction to the green electricity market, particularly to green elec-tricity labels.

1. Information content: GoO in Germany specify the energy source, the electricity volume it covers, whether it represents electricity which is in line with the definition for renewable electricity laid down in the RES Directive, the location of the respec-tive RES device and the name and contact of the plant operator. In addition to this GoO specify the installed capacity and the commissioning date of the corresponding RES devices. GoO will be earmarked whether a RES-E plant has received any fi-nancial support through the EEG. In the case of biomass, GoO have to specify whether the biomass is covered by the Biomass Ordinance.19

2. Utilisation: The legislation neither covers regulations how to organise the transfer of GoO between market participants nor how to handle the redemption of GoO once they are used e.g. for the verification of a green product claim.

18 Eligible auditing organisations/institutions have to be accredited following the rules set forth in the

Umweltauditgesetz (eco management and audit scheme). 19 Ordinance on Generation of Electricity from Biomass (Biomass Ordinance) of 21 June 2001. The

Biomass Ordinance regulates what substances shall be considered biomass, what technical processes for generating electricity from biomass fall within the scope of the EEG, and what environmental standards must be met in the generation of electricity from biomass.

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Shortly after the formal liberalisation of the electricity market in Germany in 1998, sev-eral private initiatives for quality labels for “green power” have emerged. Currently three labels respectively three labelling associations are dominating the market, which are the ok-power label (labelling body: EnergieVision e.V.), Grüner Strom Label (label-ling body: Grüner Strom Label e.V.) and several label catalogues run by the TÜVs (Technische Überwachungsvereine20). Apart from this few green supplier undergo a self verification process.21

7.5.2.1 The ok-power label

Background

The ok-power Label is operated by the registered association EnergieVision e.V. a non profit cooperation between the research institute Öko-Institut, WWF Germany and one of the federal consumer agencies (Verbraucherzentrale Nordrhein-Westfalen). The membership structure was chosen intentionally as to combine different views and inter-ests on the green power market (environmental and consumer interests, scientific back-ground). All three members are represented in the board of the association. The opera-tional labelling work is done by Öko-Institut on behalf of the association.

EnergieVision e.V. certifies green electricity products not companies. In June 2005 En-ergieVision e.V. labelled 12 products representing a total certified electricity volume of approx. 630 GWh. An overview of all labelled products is provided by the website www.ok-power.de. Since 2004 the ok-power label is accredited against the Eugene Gold Standard.

The labelling criteria outlined below reflect the standard as it stands in June 2005. En-ergieVision regularly revises the criteria in light of any changes of the legal framework for the green electricity market and the experiences gained during the ongoing labelling process.

Contact: EnergieVision e.V., c/o Öko-Institut e.V., PO Box 6226, D-79038 Freiburg, Germany, phone +49-761-45295-25, fax +49-761-4754-37, email: [email protected]. 20 The TÜVs are well established technical verification bodies. Green electricity labelling is mainly

pursued by TÜV Süddeutschland. 21 Here verification is based on an audit carried out annually by an independent auditor based on a crite-

ria catalogue which has been developed by the supplier.

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http://www.ok-power.de/




Label criteria

The label criteria of the ok-power label are laid down in a criteria document which is available in a short version as well as a comprehensive long version at the website of EnergieVision e.V.. The label criteria described below reflect the status 06/2005.


EnergieVision certifies two categories of green electricity products: supply offerings and fund offerings.

• In supply offerings electricity suppliers generate electricity from renewable sources or purchase this from the producer and wheels it under grid utilization agreements to his customers. The determining factor in this regard is the contractual supply of electricity from eligible sources. Environmental benefits accrue from the character-istics of the supplied electricity.

• In a fund offering an electricity supplier delivers electricity that under the contract is demonstrably generated from renewable sources (no system power). A portion of the electricity price – the funding contribution – must be used for financing generat-ing plants that feed power in accordance with the EEG into the public grid but for which the revenues paid by the grid operator would not result in their financial vi-ability.

Eligibility

For award of the ok-power label, the following ways of generating electricity are eligi-ble:

• Power from solar radiation energy, wind power, biogas, sewage gas and geother-mal energy - despite some apparent restrictions such as exclusion from natural parks - with no further conditions beyond the requirements imposed in any case for permit approval,

• Hydropower primarily from recommissioned or upgraded plants, as impacts on natural systems will be relatively minor; RES-E from new plants is limited to run-of-river hydro plants22,

• Biomass-fired plants: timber waste and residues from forestry operations may only be used if the wood concerned has been left in its natural state, has only been me-chanically worked, or comprises recycling products with the RAL Quality label 428. Cultivated biomass – rapeseed oil, whole crop plants or short-rotation timber – is permissible if these fuels originate from certified organic farming or from for-estry operations with FSC certification. Co-firing in thermal power plants of bio-mass meeting these requirements is permissible, with the generated RES-E calcu-lated according to its share in the total heating value of the fired fuels.

22 Eligibility criteria for hydropower plants are currently under revision in order to adapt them to the

Eugene Standard.

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• If electricity is offered from a mix of renewable energy and CHP plants, the share of electricity from CHP plants may not exceed 50%, is restricted to gas-fired plants, must derive from the CHP mode (condensing power is excluded) and needs to comply with specific emission limits.

Additionality

EnergieVision awards the ok-power label to green electricity products which create minimum environmental additionality. In this regard electricity has to derive from re-newable energy sources beyond already installed generation capacities and over and above the effects of existing public support schemes such as the EEG.

• Additionality of supply offerings: In supply offerings a minimum of 33% of the elec-tricity delivery must be generated in eligible new RES-E plants (CHP share max. 50%). A plant is considered new when is has started operation not later than six years before the respective settlement period.23 For instance in 2005 all plants are considered new which have started operation after 01.01.1999. On top of the 33% electricity from new plants additional 33 % have to derive from eligible installations which are not older than 12 years (again CHP share limited to 50%). All contributing RES-E must be generated in power plants which are not supported by the EEG.24 In the case of imports additionality is given where imported RES-E comes from RES installations which comply with the new plant definition described above and are not subject to equivalent funding through a public support scheme similar to the EEG (see also section eligibility of imports).

• Additionality of fund offerings: In fund offerings additionality is created by financ-ing eligible RES-E plants for which the tariffs paid through the EEG would not result in their financial viability. Additionality is given where suppliers spend their funds in supporting RES-E plants (in form of a production support) which are not older than 6 years (new plant definition, see above). As the production support paid by the sup-plier covers only a specific share of the total production costs (the larger part of the production costs are paid off by the EEG), the supplier can claim only parts of the greenness of the supported RES-E generation. The share of RES-E a supplier can claim in this respect (apparently this is only a virtual figure) depends on the specific support per kilowatt-hour he is paying on top of the feed-in tariff. The formula for calculating the amount of RES-E generation assignable to a green supplier is:

( )REFEEGgreen

greenEEGgreen ZZZ

ZEE

−+×=

23 A rule on the proportion counting as new plants also applies for major reinvestments in existing facili-

ties, such as for rehabilitation and capacity upgrades involving turbine improvements etc., as well as for high maintenance outlays: such plants correspond to a new plant in the ratio of the reinvested amount to a capital investment in a comparable new plant.

24 This is with the exception that suppliers may satisfy this share of the labelled product with RES-E funded under the EEG which corresponds to the annual RES-E volume which they have to purchase due to the allocation mechanism of the EEG.

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where:

Egreen = RES-E volume (virtual figure) which can be assigned to the green supplier (kWh)

EEEG = electricity fed in under the EEG (kWh)

Zgreen = additional remuneration paid by the green supplier to a RES-E plant on top of the feed-in tariff (ct/kWh)

ZEEG = feed-in tariff for the respective plant (ct/kWh)

ZREF = avoided costs to the grid operator into whose grid the electricity is fed in (ct/kWh).

In order to fulfil the ok-power additionality criteria fore funds offerings a minimum of 33% of the electricity supplied to final customers must be backed by virtual RES-E generation following this formula.

Apart from this two additional rules need to be considered:

1. It is not allowed to support RES-E plants above their economical viability (this needs to be proven).

2. The revenues to the fund in the labelling period must have been spent for its in-tended purpose before the end of the calendar year following the year in which the customer made the payment.


For imports from countries with a Eugene counterpart label (which is a label which has been accredited against the Eugene Standard) the so called three filter model, intro-duced by Eugene, applies. In such a case the following conditions must be fulfilled:

• The minimum eligibility criteria laid down by the Eugene counterpart organisation in the exporting country must be complied with. The minimum eligibility criteria applied by the ok-power label (see above) must also be complied with.

• Where imported RES-E contributes to a supply offering the criteria for additional-ity defined by the ok-power label must be met.

• In the exporting country, RES-E generation may not have been supported under a government support scheme comparable to the EEG. At the same time, the possi-bility must be excluded that the electricity concerned will also be sold as electricity from renewable sources within the exporting country itself.

In case of imports from countries in which no Eugene accredited label is in operation the respective supplier who wants that imported RES-E contributes to a labelled green product needs to consult EnergieVision e.V. which decides the eligibility of these im-ports on a case to case basis. Here EnergieVision e.V. draws special attention to the imports of electricity generated from hydropower at least until Eugene has agreed on a common methodology for assessing the eco-standard of this technology.

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RECS certificates, developed by the RECS initiative are eligible in the scope of ok-power labelled green electricity products. They can be used as proof of origin within the auditing process. For the use of RECS certificates the same rules and criteria apply as for green electricity purchases within supply offerings (eligibility, additionality). For instance the certificates must be generated with no financing under the EEG or, in the case of imports, with no similar support by a governmental support scheme abroad. In order to avoid double counting of the environmental benefit ("greenness") RES-E for which certificates were issued may not have already been marketed or fed into the grid as electricity with green attributes.

As the criteria of the ok-power label currently cannot be verified solely based on the information content of a RECS certificate, the identification of the respective RES de-vice which is represented by the certificate is required. This allows the auditor to assess all relevant plant specific information required within the auditing process.

Certificates are only be accepted as proof of origin when they have been issued within the calendar year of the respective product label.


In order to minimise the risk of double counting due to the introduction of GoO Ener-gieVision e.V. applies the following rule: where RES-E is physically contributing to a labelled product (supply offerings or RES-E delivery in the scope of fund offerings) suppliers

• either have to submit GoO as proof of origin of the corresponding electricity deliv-ery (where GoO have been issued) or

• need to submit a written confirmation by the respective plant operator that no GoO have been issued for the corresponding electricity generation.

EnergieVision e.V. will revise this rule (in particular for RES-E imports) in light of the different implementation options Member States have chosen and the experience gained with this new instrument.


Institutional set-up

Green electricity suppliers: The certification procedure is regulated within a labelling contract between a green electricity supplier and EnergieVision e.V.. With signing the labelling contract the supplier becomes the right to use the ok-power label within his marketing campaign (in accordance with specific marketing rules). Apart from this the labelling contract requires the supplier to provide to the auditors all relevant data, in-formation and confirmations which are needed for the product audits.

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Auditors: In the ok-power labelling scheme the role of the auditor is assigned to com-petent institutions such as the Technische Überwachungsverein (TÜV), Ecofys or other independent organisations or experts. Auditors are not required to undergo a formal accreditation process. However, they should be experienced in environmental auditing and it is obvious that they must be independent from electricity suppliers and generators and all other players involved in the labelling process.

Labelling Body: As labelling body EnergieVision e.V. is responsible for assisting the auditors to correctly apply the label criteria and to ensure sound verification of all audit-ing reports.25 In the context of verification EnergieVision e.V. has also the right to per-form random checks at the premises of green electricity suppliers. Moreover EnergieVi-sion is responsible for all aspects concerning the communication of the label and its procedures. This comprises the provision of a helpdesk for consumers, suppliers and generators, the publication of the label criteria and the verification whether all market-ing material used by electricity suppliers complies with the communication rules laid down in the criteria document.

Labelling procedures

Tracking mechanism26

Electricity suppliers have two options to proof that they have purchased sufficient green electricity to comply with the criteria. The two eligible tracking methods are:

• Contract based tracking: In this option electricity contracts provide evidence that green electricity (or at least the corresponding green attributes)27 have been trans-ferred to the respective supplier.

• Acquisition of green power attributes through the RECS system (for the conditions for the recognition of RECS certificates see the section above on this issue)

Auditing and verification procedures

The labelling process of the ok-power label comprises of four main procedures:

• the product pre-audit at the beginning of a calendar year (carried out by an auditor),

• the mid-year balance (submitted by electricity suppliers),

25 In order to allow easy verification EnergieVision e.V. provides standardised data sheets (Excel tem-

plates) as basis for the product audits. 26 In the context of tracking it has to be secured that the attributes in question (such as the "greenness")

won't be used several times for the same purpose (exclusion of multi counting). In this respect it needs to be ensured that the respective "greenness" has been transferred to the supplier, and b) won't be "used" in other green products than the labelled one.

27 Contract based tracking doesn't require that each electricity contract is followed by physical electricity delivery. Many market players conclude so called swap contracts. A swap contract involves two vice versa electricity contracts which cover an identical electricity volume and load schedule. As a conse-quence swap contracts do not results in any physical delivery and are not reflected in any load sched-ules. They are rather limited to the transfer of attributes (such as the "greenness").

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• the final annual audit at the end of the calendar year (carried out by an auditor), and

• the verification of both audits (carried out by EnergieVision e.V.).

The audits aim at the evaluation whether a labelled product complies with the minimum standard laid down in the criteria document (including the electricity balance, eligibil-ity, additionality). In this regard the audit comprises document reviews at the premises of green power suppliers but does also require onsite plant inspections where necessary.

Product pre-audit: As companies are allowed to directly use the ok-power label once they have signed the labelling contract with EnergieVision e.V. a product pre-audit is essential. The product pre-audit has to be conducted within three months after the label-ling contract has been signed. For the pre-audit an electricity supplier has to specify how he is intending to structure the product portfolio in order to comply with the crite-ria during the labelling period. The auditor has to check whether the intended portfolio will be in line with the label criteria. Although electricity suppliers may completely change their product portfolios during the year the pre-audit indicates whether a sup-plier understands and will be capable to cope with the criteria which he has to comply with.

Mid-year balance: Electricity suppliers have to submit a mid-year balance within six weeks after the end of the first half of each calendar year. Within the mid-year balance suppliers have to submit data on those green electricity volumes which they have pur-chased and sold in the first six months of the respective year. Moreover suppliers are obliged to indicate whether there is any indication that they won't be able to comply with the labelling criteria at the end of the year. The mid-year balance has to be infor-mally submitted in writing (no auditor is required in this respect).

Final annual audit: Final product audits have to be carried out for all labelled products at the end of the calendar year. As the balancing and settlement procedures of electricity companies which provide a series of necessary data require a fair amount of time at the end of a balancing year the final annual audit report has to be submitted to EnergieVi-sion e.V. within six months after each settlement period.

Verification: In its role as labelling body EnergieVision e.V. is verifying all audit re-ports. In the case of inconsistencies EnergieVision e.V. addresses the responsible audi-tor or, when necessary, directly the respective electricity supplier. In order to ensure sound verification EnergieVision e.V. has the right to carry out physical random checks at the premises of the supplier and (if applicable and necessary) directly at the site of renewable power generators involved.

Content of audits: In both kind of audits the auditor has to inspect, verify and evaluate the following topics:

• Plant specific aspects such as the

- identification of the plant and the plant operator,

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- assessment of date of first operation,

- verification of the eligibility of the respective plant,

- assessment of all required plant specific technological data (e.g. capacity, ex-pected (pre-audit) or actual (final audit) net generation volume, grid connection, meter number),

- eligibility to public support: Verification whether the respective power plant is eligible to public support schemes (such as the EEG) and whether and to which extent it has been supported under such a scheme,

- verification of all contracts and licences required to prove compliance.

• Product electricity balance (comparison of sold and purchased volumes)28

• Fund balance (relevant to fund offerings)

• Compliance with the additionality criteria.

Market Impact

In July 2005 EnergieVision e.V. certified 12 electricity products offered by 11 suppli-ers. Most of the products are not offered nationwide. The certified electricity volume is approx. 630 GWh which corresponds to a market share of approx. one third of the vol-untary green electricity market. The market share of ok-power labelled electricity of the whole domestic market is of approx. 0,5%. Supply offerings contribute with more than 95% to the labelled ok-power volume.

In Germany most renewable power plants are eligible to the EEG. In this regard it is rather difficult to create a product solely generated by domestic power plants which can comply with the additionality criteria of the ok-power label. In supply offerings only few domestic technologies (e.g. co-firing of biomass in fossil-fuelled power plants, new plant creation by major refurbishments in hydropower plants) are qualified to create additionality. For that reason imports of eligible RES-E have become a major source in the scope of the ok-power label.

28 ·As supply and demand never exactly match (deviations can only be determined after actual consump-

tion figures have been determined due to meter readings at each customer) flexibility rules have been established as follows: • Negative saldo: Where the green electricity volume which a supplier has sold during a calendar

year exceeds the volume he has generated or purchased in the respective year, the shortage (in-cluding the transfer of a negative/positive saldo from the preceding calendar year) must not ex-ceed 20 % related to the sold electricity volume. The shortage has to be fully carried forward to the following year.

• Positive saldo: Where the electricity volume which a supplier has sold during a calendar year falls below the volume he has generated or purchased in the respective year (including the trans-fer of a negative/positive saldo from the preceding calendar year), he is allowed to transfer a vol-ume of maximum 25 % related to the sold electricity volume to the following year. All surplus acquisition which exceeds the 25 % level "expires".

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Especially in the case of supply offerings it is hardly possible to exactly quantify the impact of the ok-power label on the construction of new RES-E or CHP plants. This is mainly due to the fact that in most cases the installation of a new plant or refurbishment measures in existing plants can't be unambiguously assigned to one labelled product. The effect of the specific additionality requirement applied by the ok-power label is rather as follows: The new plant definition applied by the label creates a premium mar-ket segment covering these RES-E volumes which are regarded as eligible new plant generation. Project managers, potential investors and plant operators can benefit from this premium segment as electricity which complies with these criteria generally gets a higher price on the green electricity wholesale market. In this respect the ok-power la-bel provides incentives to invest in new plants and to increase renewable electricity generation over and above these generation volumes which are stimulated and finan-cially covered by public support.


Since 2004 the OK-Power label is accredited against the Eugene Gold Standard.

7.5.2.2 Grüner Strom Label

Background

The Grüner Strom Label (GSL) is operated by the registered association Grüner Strom Label e.V. Grüner Strom Label e.V. is a co-operation between the environmental NGOs BUND, Naturschutzbund Deutschland (Nabu), IPPNW and DNR, the consumer NGOs Verbraucher Initiative and Bund der Energieverbraucher, and Eurosolar.

The Grüner Strom Label e.V. has a board with three members and a so called certifica-tion committee represented by five technical experts who are appointed by the member organisations.

GSL certifies green electricity products, not suppliers. GSL is awarding two different label levels, GSL Gold and GSL Silver. The difference between the two categories is explained below. In January 2005 GSL certified five products in the Gold category and one product in the Silver category. Most of the products are sold by several supply com-panies. For instance the product "energreen" (GSL Gold) which is structured and organ-ised by the ASEW (ASEW is an association of local utilities throughout Germany) is currently marketed by more than 80 municipal utilities. The same applies to the second

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ASEW product "Etagreen" which holds the GSL Silver label. "Etagreen" is sold by eight municipal suppliers. An overview of all labelled products is provided by the web-site www.gruenerstromlabel.de.

Contact: Grüner Strom Label e.V., c/o EUROSOLAR e.V., Kaiser-Friedrich-Str. 11, D-53113 Bonn Germany. Tel.: +49-228-362373. Fax +49-228-361213/79. E-mail: [email protected].

Label criteria

The labelling criteria outlined below reflect the standard as it stands in June 2005. The label criteria of GSL are laid down in a criteria document which is available on the web-site of the association.


GSL is only certifying fund models irrespective whether a customer is supplied by elec-tricity from renewable energy sources or system power. A portion of the electricity price – the funding contribution – must be used for financing generating plants (either investment support or production support) eligible to the EEG but for which the reve-nues paid by the grid operator would not result in their financial viability. These plants may be owned by the labelled supplier or by third parties.

GSL is operating two different label categories reflecting different quality levels in term of environmental benefit. The label category is depending on the level of financial sup-port a supplier is paying to eligible RES-E plants. The label GSL Gold is given to those products for which the respective supplier spends a minimum of net 2 ct per kilowatt-hour sold to final consumers to support eligible RES-E installations. Where the specific supports lies between net 1-2 ct/kWh, the category GSL Silver is applied. No label is awarded to those products where the specific support is below 1 ct/kWh.

Costs for the management of the labelled products and in particular the administration of the respective RES-E funds must not exceed 25% of the total premium payments of the customers.

Eligibility

The below listed sources and technologies may be recognized as eligible in the scope of the GSL labels. This means that only those RES-E plants may be funded which comply with these criteria. The two label categories do not differ in the eligibility criteria.

• Hydropower < 5 MW

• Wind power with no restrictions

• Biomass < 20 MW including sewage gas (landfill gas excluded); biomass has to be in accordance to the Biomass Ordinance; different from the regulations of the Bio-mass Ordinance cultivated biomass is only accepted when it complies with the crite-ria for organic farming (e.g. where farms have been certified against the EU Council Regulation on organic production of agricultural); this restriction does not apply to

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http://www.gruenerstromlabel.de/



cultivated biomass which is used for co-fermentation in rural biogas plants < 500 kWel and at the same time does not exceed a 50% share of the total energy produc-tion.

• Photovoltaic < 5MW

• Geothermal

As GSL is restricted to RES-E, it is not allowed to support fossil fuelled CHP plants through the green electricity fund.

Additionality

Additionality is created by financing eligible RES-E plants for which the tariffs paid through the EEG would not result in their financial viability. Only those RES-E plants may be supported where the construction of the plant has not begun before the funding assurance has been given. For the support of RES-E devices the following additional rules apply:

• Financial support which is paid should be minimum 10% of the tariff the respective plant receives through the EEG.

• The average of all support which is given to PV plants should not exceed 20% of the respective tariff awarded by the EEG; the average support given to all other installa-tions should not be above 30% of the EEG tariffs.

• RES-E plants may not be supported above their economical viability (this needs to be proven upon request).

• The funding contributions should be spend in the year they occurred. Specific flexi-bility rules are applied as long as a supplier can provide a convincing schedule how to spend the fund in the following years.


As GSL certifies only fund models, physical imports of electricity do not have any rele-vance to the labelling scheme. For that reason the criteria document doesn't provide any specifications about imports.


As GSL certifies only fund models, RECS certificates which are issued for physical electricity generation do not have any relevance to the labelling scheme.

Interface to Guarantee of origin for RES-E

As GSL certifies only fund models, GoO which are issued for physical electricity gen-eration do not have any relevance to the labelling scheme.

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• Green electricity suppliers: Green electricity suppliers conclude a labelling con-tract with Grüner Strom Label e.V.. Once the labelling contract has been signed the respective suppliers is permitted to use the label e.g. for the promotion of the la-belled product. The labelling contract is covering a five year period which means that the label is awarded for five years in advance. With signing the labelling con-tract the supplier is obliged to provide all relevant data to the auditor.

• Auditors (certifier): Currently there is only one auditor in the scope of GSL label-ling. The auditor is working with the Zentrum für Sonnenenergie- und Wasserstoff-Forschung (ZSW)29 in Stuttgart. The auditor assesses the performance of the la-belled products and verifies whether the product fulfils the labelling criteria. The re-spective audit reports are submitted to GSL.

• Labelling Body: Grüner Strom label e.V. is the main contractual partner of the electricity supplier regarding the labelling process. In its role as labelling body GSL respectively its certification committee is finally approving the audit reports submit-ted by ZSW. Apart from this GSL is responsible for all aspects concerning the communication of the label (e.g. operation of the website) and its procedures.


Product compliance with the labelling criteria is assessed annually (annual audit). Sup-pliers are obliged to establish and operate a book keeping for their green electricity ac-tivities which is separate from their other business. Relevant data which is required to prove compliance need to be confirmed by the suppliers' financial accountants or tax consultants and need to be sent to ZSW before June 30 of the year following the label-ling period. Similar rules apply for all plant operators which receive financial support through the labelled product.

The core of the labelling process are the annual audits carried out by ZSW. These audits aim at

1. assessing whether a labelled product complies with the label criteria

2. where compliance is not given imposing specific conditions to suppliers in order to ensure short term compliance in the following labelling periods.

The annual audits are based on document reviews and (where necessary) onsite inspec-tions.

Content of audit:

The audits conducted by ZSW comprise the following aspects

29 Centre for Solar Energy and Hydrogen Research

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• Funds balance (revenues, expenditures)

• Electricity balance, in particular the total sales volume in the labelling period

• Plant specific aspects (of all funded RES-E plants) including the commissioning date, technological data (e.g. capacity, expected and actual net generation volume)

Market Impact

In July 2005 GSL certified five products in the Gold category and one product in the Silver category. The market volume of the Gold products was about 60 GWh corre-sponding to a market share of approx. 3% related to the voluntary green electricity mar-ket.

There is no overall assessment of the impact of the labelled products on the extension of renewable electricity generation. Until March 2005 the largest product in terms of sup-ply volume, the product energreen operated by the ASEW (see above), supported the installation of approx. 400 PV devices, 1 wind turbine, 3 hydro power plants and 4 bio-mass plants. The total annual generation volume of these power plants is approx. 4,5 GWh. However, due to the fact that the total generation costs of these plants are only partly covered by the financial contributions paid through the labelled product (the major part of the generation costs is covered by the EEG), the product can only claim a limited share of the environmental benefit (additionality) which results from the exten-sion of RES-E generation.


In general the GSL Gold category would be eligible to the Eugene Gold Standard whereas GSL Silber would comply with the Eugene Silver Standard. However both GSL standards would be required to implement hydropower criteria to become accred-ited.

7.5.2.3 Labels awarded by the TÜV

Background

The organisation Technischer Überwachungsverein (TÜV) is organised in several re-gional branches. In the field of green power labelling the most active branches are TÜV Süddeutschland and TÜV Nord.

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The TÜVs operate labels on different levels of the supply chain. Labels are applied on the generation level (generation certification) as well as the product level (product certi-fication). On the product level TÜV Nord applies the criteria catalogue "VdTÜV-Basisrichtlinie Ökostromprodukte" whereas TÜV Süd is operating four different quality standards: EE01, EE02, UE01 and UE02. The quality standard applied by TÜV Nord and two of the standards of TÜV Süddeutschland EE02 (Provision of electricity from renewable energy sources (hydro power)) and UE02 (Provision of electricity from re-newable energy sources and CHP) can be regarded as a Guarantee of Origin. Under these standards it is not compulsory that a labelled product ensures any form of addi-tionality in the sense of extending electricity generation from renewable energy sources over and above existing power plants or what is mandated by public support.

For that reason the following description will focus on the label catalogues EE01 "Pro-vision of electricity from renewable energy sources (including capacity growth)" and UE01 "Provision of electricity from renewable energy sources and CHP (including ca-pacity growth)".

In July 2005 11 products were labelled under the label catalogue EE01. An overview of all labelled products is provided by the website www.tuev-sued.de.

Contacts: TÜV Süddeutschland Holding AG, Westendstraße 199, D-80686 München, Germany. Tel.: +49-89-5791-0. Fax +49-89-5791-1551. www.tuev-sued.de TÜV Nord Umweltschutz GmbH & Co. KG, Große Bahnstraße 31, D-22525 Hamburg, Germany. Tel: +49-40-8557-2150. Fax +49-40-8557-2169. www.tuev-nord.de

Label criteria

The labelling criteria outlined below reflect the standards EE01 and UE01 as they stand in June 2005. The label criteria can be downloaded from the websites of TÜV Süd-deutschland.


The labels TÜV Süd EE01 and UE01 can be awarded to supply offerings and fund of-ferings which are based on the electricity supply from renewable energy sources and CHP. Whereas EE01 requires the supply of 100% RES-E, UE01 allows electricity from fossil fired CHP to contribute to a maximum of 50%. The labels are not restricted to the German green electricity market but are also awarded to products in e.g. the Swiss or Austrian green electricity markets.

Balancing periods are:

• EE01: Supply and consumption must be balanced after one year at the latest

• UE01: Synchronised supply and demand, which means that supply is matching de-mand simultaneously measured as 15-minutes average value.

Eligibility

The following energy sources are eligible in the scope of the labels EE01 and UE01:

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http://www.tuev-sued.de/

http://www.tuev-nord.de/


• hydropower (storage power stations without the energy absorbed by storage pumps)

• wind energy

• biomass (as defined in the Biomass Ordinance)

• biogas

• landfill gas

• pit gas (in countries where national legislation regards pit gas as renewable energy source, e.g. Germany)

• solar energy

• geothermal

Where electricity from CHP is the basis for a product, the respective power plants are required to exceed annual efficiency factors of 70%.

Additionality

Under both label catalogues a minimum of 25% of the renewable share of the labelled product (RES-E share in EE01 100%, in UE01 > 50%) needs to derive from renewable power plants, which have been put into operation not more than 36 months ago (related to the time when the label was issued).

On top of this the following requirements have to be met:

• Where surcharges are taken (no specification of a minimum surcharge), at least two thirds of the collected funds need to be spent for financing new production sites (RES or CHP).

• Alternatively electricity sourcing a labelled product derives from power plants (RES or CHP) for which profitability can only be achieved by the surcharge on the prod-uct.

• Other models are possible as long as their support effect equals at least the models mentioned in the two bullet pints above.


Imported RES-E is eligible to products certified against the standards EE01 and UE01.


It must be possible to trace back all electricity generated as renewable energy to clearly described and identifiable sources. As long as this is guaranteed, the proof of the energy sources can also be performed by certificates which are issued by an accepted certificate trading system such as RECS.


The published criteria documents do not specify how the interface to the GoO is organ-ised.

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The whole labelling process is organised by the TÜV Süddeutschland. In this respect the TÜV takes the role of the auditor and the labelling body. Audits are carried out an-nually.

Market Impact

Currently 11 products (6 products sold in Germany, 5 products sold in Switzerland) are labelled under EE01. None of the products is sold nationwide. Sales statistics are not available.


Both label catalogues EE01 and UE01 are currently not compatible to the Eugene Stan-dard. This is mainly due to the interface of the TÜV labels to the EEG. Under the Eugene Standard the additionality requirements must be met entirely over and above governmental renewable legislation such as obligations or feed-in schemes. For Ger-many this means that additionality must be created by electricity generation in renew-able power plants which are not entitled to receive a feed-in tariff under the EEG. This is not explicitly excluded by the TÜV labels which rather allow that products are sourced by power plants which in principle could utilize the EEG.

For fund models the minimum additionality standard of the Eugene Standard applies to the minimum contribution per kilowatt-hour sold, which is used for funding of "new" renewable plants. In the case of the labels operated by TÜV Süddeutschland neither EE01 nor UE01 specify a minimum contribution to the eco-fund where products are combined with a surcharge.

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7.6 ITALY

Ascanio Vitale, Matteo Leonardi (WWF Italy)

7.6.1 Introduction

Despite Italy’s enormous renewable sources potential, its energy market has been al-ways oriented towards a very conservative attitude. Italy’s energy mix shows only a 9% renewable quota, with no sensible increase in years. At the same time, renewable elec-tricity covers some 16% of the total domestic production. Hydropower covers the bulk production of Italy’s renewable electricity, with some 50 TWh/y coming mainly from big reservoir . The European Water Directive and regulation on minimum water flow have not been implemented in most regions.

In 1992 a feed in tariff for renewable incentive, named CIP6, has been introduced. Un-fortunately the scheme was expanded to conventional fossil fuel and industrial process fuels. In 2005 only 20% of CIP6 energy was produced in renewable power plants with the remaining 80% in conventional and process fuel. The mechanism was suspended on 1997 due to its high costs. In 2002 a green certificate (GC) mechanism was introduced. The price of the GC is not given by the market but with a complicated methodology which is not related to real renewable technology cost. The GC mechanism, which ap-plies to new renewable power plants (entered into operation after 1/4/1999) and to to-tally or partially refurbished existing plants (older than 10, 15, 30 years depending on the technology) has also been extended to waste burning power plants (without distinc-tion between bio and biodegradable waste), district heating (even fuelled by fossil fuel) and co-firing. The GC system has not introduced any power plant size limit and the definition of biomass and waste is still uncertain. All existing renewable and CHP power plants indirectly benefit being exempted by the GC obligation.

The mechanism is based on a 2% obligation quota on conventional electricity produc-tion and imports. The quota will be incremented by 0,35% yearly from 2005 to 2007. Up to march 2006 the GC obligation quota after 2007, have not been upgraded by the government despite legal provision to identify 2008-2010 quotas before December 2004.

This uncertain situation on the future quota level is jeopardising renewable investments despite a very high GC price (> 100 EUR/MWh). Nevertheless, most of existing Italian renewable energy installations have received and are receiving a fairly good level of public support. Voluntary schemes may not represent, for the moment a substitute to public support.

Poor eligibility criteria of existing incentive schemes and the difficulty to introduce the concept of additionality towards voluntary green tariffs are two key issues that need to be taken into consideration in the present project. For instance for the moment there is no certification for sustainable biomass and it remains uncertain whether it will be in-troduced in the near future.

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7.6.2.1 100% Energia Verde (Bollino Verde)

Background

The Bollino Verde - as the 100% Energia Verde label is usually called - was born in 2001 from an idea of Enel Green Power (former detached controlled company of Enel, at present merged back into Enel) and APER (renewable producers organisation) by setting up the official owner of the label, the non-profit foundation Re-energy. In its four years of presence on the market, the 100% Energia Verde label has been showing an exponential enlargement of its customers share. A further increase is surely expected with the enlargement of the market to domestic consumers.

In order to use the 100% Energia Verde label, electricity products have to pay a royalty to the owner of the label depending of the type of product and the nature of the user of the label. Each contract for the users of the label lasts 12 months, no matter the amount supplied, with a top limit of EUR 25.000 payable in royalties by each client.

Two rates (for the royalties) have been created for each kind of consumer: residential consumers pay a flat rate of EUR 25 for a 12 months supply and non-residential con-sumers pay 0,25 EUR/MWh with a minimum amount of EUR 25 for a 12 months con-tract.

Non-residential can be integrated into two different categories: customers buying the equivalent of their yearly total electricity demand, and those who pay for a limited amount, covering only partially their electricity bill (respectively utilizzatori totali and utilizzatori parziali). However, no incentive is given to reward a company to choose a full supply, since tariffs are calculated per MWh with a rate independently from the amount bought.

On the production side, electricity suppliers pay 0,05 EUR/MWh in royalties to the owner of the label, with a minimum amount of EUR 100. Producers organisations are billed EUR 2.500, while traders and distributors have a fixed rate of 1 EUR/MWh.

Fees for the cost due to the management of the green labelling , on the other side, refer to yearly rates with a fixed entry rate for each client, with a top limit of 20.000 EUR/y per client.

The table below summarises fares for each client typology. The different clients of Bol-lino Verde are asked to pay an entry and a yearly contribution.

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Table 7: Italy - Fees for each client typology (100% Energia)

CLIENT TYPE ENTRY RATE YEARLY RATE

producers up to 30GWh/y 650 EUR 78 EUR/plant

producers over 30GWh/y 650 EUR 39 EUR/plant

residential 16,25 EUR

non-residential consumers 130 EUR (does not apply to non-profit consumers)

32,50 EUR up to 1GWh 0,08 EUR/MWh for ex-ceeding quota

distributors and traders 650 EUR 1300 EUR

producer organisations 325 EUR 650 EUR

Label criteria

Eligibility

Within the general criteria, defining ethical requirements (such as worker’s rights or respect for minorities) to comply to, there are two statements in particular which ap-pears to be underestimated by the label committees:

“Each client who claims the use of the label has to declare not to pursue activities in contrast with the label’s principles, such as commercial activities with a clear negative impact on the environment; use and development of energy sources and technologies potentially dangerous with mankind and the environment”. Below are listed the energy sources eligible in the scope of the label:

• Wind

• Photovoltaic • Solar thermal • Geothermal • Flowing water hydropower • Reservoir hydropower • Tidal and wave • Biogas • Biomass

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Each client will have to show to the label committee how his production supply is cov-ered either with eligible plants or with equivalent RECS certificates.

There are no specified criteria for sources whose environmental impact is considered to be nearly negligible, while the label committee still has to deliver sustainable criteria for hydropower and biomass. So far, hydro plants below 50MW and biomass plants below 30MWe are considered eligible. Italy’s fastest growing and controversial RE source, wind, does not need any particular requirement to be considered eligible.

Additionality

There are no criteria for additionality included in the 100% Energia Verde mission statement. Royalities are paid to REEF, a non-profit organisation founded by Enel and APER, who devotes more than 80% of its income to communication and information campaigns on environment protection, scientific and technological research and on green labelled products.


100% Energia Verde allows energy imports, although it certifies only supplies guaran-teed by the same label in another country. The label, in fact, has been registered in many other countries; however, until now it has been established only in Italy.


100% Energia Verde supports RECS, although it collides with its official mission of environmental sustainability. Incoming specific criteria for sustainable biomass and hydropower should very likely overcome the institutional rules, although a clear distinc-tion of a real sustainable production maybe still be uncertain.


Guarantee of Origin certificates are not supported by the label. Given the dangerous inclusion of waste incineration and other fossil sources in the Italian renewable energy sources classification, this opens the way to many speculations and mines the road for a true sustainable electricity market.


The label is owned by REEF, a non-profit organisation founded by Enel and APER (see above). Contact: REEF O.N.L.U.S., 120, via Andrea Pisano, 50100 Pisa, Italy, tel.: +39 050 531 588, e-mail: [email protected], http://www.centopercentoverde.org.

REEF holds the 100% Energia Verde label since 24.04.2002, supervises its use and leads the guarantee committee, which is composed by 50% by NGOs and consumer organisations and 50% by clients (producers, distributors, traders and customers). This committee should analyse applications, verify their ethic and general criteria, manage the activities funded by the label royalties and define sources eligibility criteria.

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http://www.centopercentoverde.org/


An auditing committee, identified with a contest and at present represented by CESI30, gathers all applications, verifies the technical documentation and emits licences for the use of the label.

Royalties and fares are paid to REEF, which stipulates contracts with the auditing com-mittee and manages communications between the guarantee commission and the audi-tors.

Once an application is submitted to REEF, it passes through the required approval of the two committees. The auditors can be called in again by the guarantee commission for further investigation, once that the data submitted would result incomplete or unsat-isfactory.

Market Impact

The label has been structurally conceived to foster a green electricity market and not its production. The principle identified by Enel and APER aims to develop a market for the present production, yet far to be fully exploited and clearly opposes the introduction of any compulsory measure of additionality.


Even though it has been officially approved that the Bollino Verde has to migrate to the Eugene Standard, the label is still lacking in transparency within its structure and miss-ing clear and harmonised sustainability criteria. Currently WWF Italy aims at introduc-ing within the bollino verde more stringent eligibility criteria as well as the concept of additionality which might allow the label to become Eugene compatible in the near fu-ture.

30 CESI 54, via Rubattino 20100 Milano - Italy http://www.cesi.it

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7.7 THE NETHERLANDS

Samantha Ölz, Mark Draeck (IT Power)

7.7.1 Introduction

In 2004 (2003), renewable energy sources constituted approximately 4,4 (3,3) percent of total electricity generation in the Netherlands. Biomass31 was the main RES contribu-tor with 2,6 (2,0) percent, while wind power was the second most significant source with 1,7 (1,2) percent of electricity generation. However, the import of renewably gen-erated electricity overshadowed domestic production, accounting for more than double the national generated or 9,3 (8,8) percent to national electricity consumption.

The Netherlands implemented its first national renewable energy strategy in the early 1990s. Since then, the basis of Dutch renewable energy policy has been revised several times, with fiscal measures, tradable renewable energy certificates and feed-in tariffs all having been introduced and frequently co-existing in the past fifteen years.

However, at the time of writing, Dutch policy support for renewable energy is again undergoing a major overhaul, the impact of which cannot yet be evaluated.

Targets

The Netherlands first established a domestic target for expanding its renewable energy capacity in 1995 in the country’s second National Environmental Policy Plan, to in-crease the share of RES in total primary energy supply from 1% in 1995 to 10% by 2020. This has been estimated to be the equivalent of 17% of the electricity consump-tion (Boots 2003). To achieve this target the national Renewable Energy Action Pro-gramme 1997 – 2000 was implemented, which set an interim target of 5% of primary energy supply or the equivalent of 8,5% of electricity consumption by 2010.

In the RES-E Directive the Netherlands committed itself to a slightly higher indicative target of satisfying 9% of its electricity consumption from RES-E by 2010.

Renewable Energy Policy

Except for a short-lived surge in biomass-based renewable energy during the 1970s oil crisis, the first steps towards a Dutch renewable energy strategy were made in 1991, when the government negotiated voluntary agreements with the energy supply sector under the Environmental Action Plan (Dutch: Milieu Actie Plan – MAP). The energy supply sector committed to voluntary sales targets for renewables amounting to 3,2 per-cent of electricity sales and 0,7 percent of gas sales by the year 2000. These measures

31 Biomass comprises the following power generation technologies: biomass co-firing, gasification and

the incineration of the biologically degradable fraction of waste.

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were expected to lead to a 2,7 million tonnes reduction in CO2 emissions over the same period.

In order to reach this target, energy companies had the opportunity to raise a system benefits charge, the so-called “MAP levy” (which, on average, was 1.8% of the energy bill) on conventional energy sold to their customers. The revenues from the MAP levy were used for renewable energy and energy efficiency projects. The overall renewable energy target of 3,2% by 2000 was specified for each participating energy company. In January 1998, all Dutch energy suppliers, united in EnergieNed, voluntarily introduced the Green Label system to facilitate the achievement of their respective renewable en-ergy targets. The green electricity price under the label system consisted of three com-ponents:

• small feed-in price based on bilateral agreements between Dutch distributors and renewable generators (later replaced by a pool price/guaranteed price);

• the green label price (average of EURct/ kWh); and

• a production subsidy.

A second fiscal instrument contributed to the growth in green electricity in the second half of the 1990s. The second Dutch National Environmental Policy Plan introduced a Regulating Energy Tax (Dutch: Regulerende Energiebelasting - REB) on electricity and natural gas consumption above a minimum threshold on final consumers (households and SMEs) in 1996, which was designed to increase the price of conventional energy in order for RES to become more competitive. From the beginning of 1999 onwards, this fiscal measure provided a demand-side incentive for renewable energy when the 1998 Electricity Act introduced a tax exemption for RES-E that could be transferred to con-sumers of green electricity products (article 36i of the Electricity Act, also called the, REB nil tariff32). The REB system at the same time stimulated RES generation, as part of the tax revenue from non-renewable electricity consumption was transferred as a production subsidy to the renewable electricity producers (article 36o, also called the REB subsidy 33 ). In the absence of mandatory RES-E quota, these fiscal incentives helped drive voluntary demand for green electricity.

In 2001, the green electricity market was the first Dutch electricity market segment to be liberalised. The freedom of choice of supplier for green power encouraged electricity utilities to launch advertising campaigns to increase customer loyalty and attract new customers to this niche market, whereas consumers of conventional electricity were still tied to their existing suppliers until July 2004. The greenpower-only liberalisation in combination with the high level of the REB exemption, fuelled demand for green elec-tricity to unprecedented levels.

The implementation of electricity market liberalisation also affected the financial sup-port structure for renewable energy. In 2000, both the MAP levy and the green label system were abandoned, despite anecdotal evidence that overall renewable energy gen- 32 Ibid. 33 Ibid.

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eration had nearly doubled among participating suppliers, although the target had not been reached34. However, the Dutch government had not accepted the surrender of the voluntary Green Labels as proof of renewable energy supply, limiting EnergieNed’s willingness to continue the system.

In its place, the government introduced a tradable green certificate system from 2001. This system allowed for the verification, registration and tracking as well as trading of green electricity. The tradable green certificate system was linked to the existing REB exemptions, by linking the eligibility for energy tax exemption to the surrender of a green certificate. However, the production subsidies derived from REB revenue re-mained a separate additional policy incentive for RE generation by being based on bi-lateral contracts between generators and electricity suppliers.

Until 2001, imported green electricity was not eligible for REB exemption. Distribution companies lobbied for including imports, arguing The argument was that domestic pro-duction capacity was insufficient to meet demand. As of January 2002, imports also became eligible for Dutch green certificates, and consequently, for REB exemption.

As of January 2004, the Dutch government converted its green certificate system into a system of Guarantees of Origin, which had to be umplemented under the RES-E Direc-tive. However, the structure of the certificate system was left fundamentally unchanged.

In July 2003, a new “environmental quality of electricity production” (MEP) policy was introduced. Two main objectives of the MEP were to reduce investment risks and im-prove cost-effectiveness of renewable electricity. Budget constraints had caused uncer-tainty about future energy support programmes with a consequent reduction of new re-newable energy investment.

The MEP subsidy is financed by a levy on all connections to the electricity grid in the Netherlands. Support is provided by means of a feed-in tariff combined with a partial energy tax35 exemption. The MEP allows subsidies for RE generators which depend on the difference in costs (including investment, operation & maintenance cost) between their facilities and conventional (non-renewable) units. The MEP tariff levels are set for 10 years for each installation. The REB exemption was gradually decreased, compen-sated by a subsequent increase in feed-in subsidies. The REB exemption was abolished completely in January 2005. Thus, the promotion of the Dutch green electricity market is now supply driven.

However, in May 2005, the Dutch government announced that MEP support would be suspended with immediate effect for all new RE capacity in order to control spending on renewable energy expansion, which had exceeded the budgeted forecasts by EUR 174 million. To curb MEP expenditure, a budget ceiling for the MEP system will be set. As this requires a legislative change which may be effected by 2007 at the earliest, MEP 34 Boots (2003) mentions that generation among corporate “Green Label” participants had from less

than 800 GWh in 1997 to 1.558 GWh in 2000, although the target of 1.700GWh was not reached. 35 In 2004, the transposition of the European Directive on Energy Taxation meant that different taxes on

energy products were integrated into the existing “regulating energy tax” (REB). This justified the name change to the more general “energy tax” (Dutch: Energiebelasting - EB).

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subsidies for new offshore wind and clean biomass installations are being reduced to zero in the interim36. However, a separate MEP category was created for the mainte-nance of existing onshore wind turbines, reflecting the lower costs for existing onshore turbines relative to investment costs for new turbines. The subsidy amounts to EURct 1,7/ kWh in the first half of 2006 and then drops to EURct 0,8/ kWh in the second half of 2006 and in 2007. These lower subsidy amounts apply only to new applications. Ex-isting installations and applications being processed are still eligible for the existing subsidy of EURct 7,7/ kWh for onshore wind energy generation.

The current budget deficit will be covered by a near 100% increase in final consumer contributions to EUR 100 for households.

This abrupt policy swing creates significant regulatory uncertainty for stakeholders in the renewable energy sectors. The impact of this development on the growth rate of renewable energy generation and the attainment of the 9% indicative target by 2010 cannot yet be assessed at the time of writing. However, the continuing uncertainty and policy changes are unlikely to have a positive effect on domestic investments.

In addition to the MEP feed-in tariffs, RE generators benefit from Energy Investment Tax Relief (EIA), which allows 55% of eligible costs to be deducted from the profits tax to promote investments in energy efficiency and renewable energy. In 2002, the total eligible investments in RE projects amounted to EUR 803 million.

The Energy Premium Regulation (EPR) aims to increase demand for RE in households. Subsidies are financed from the revenues of the REB and can be given to both tenants and landlords. EPR was first implemented in 1999 by giving tax incentives but was converted into a subsidy scheme in January 2003. In 2002, it had a total budget of EUR 24 million for renewables of which some EUR 16 million was used for PV.

Guarantees of Origin for Renewable Electricity (GoO)

To be considered renewable, electricity must fulfil the legal requirements with respect to the redemption of GoO as prescribed in the Electricity Code. The system for Guaran-tee of Origin was launched in January 2004 by renaming the former green certificate system a GoO system. Imports are still allowed as proved through redeeming (foreign GoO), but are not eligible for the MEP subsidy. The following conditions apply to im-ports of renewable energy (van Sambeek 2002):

Reciprocity

Only imports from countries that meet the reciprocity criterion as laid down in article 19 of EU Electricity Directive 96/92/EC and implemented through articles 44 and 45 of the Dutch Electricity Law 1998 are eligible. This reciprocity clause means that customers in Netherlands for whom renewable electricity is imported should also be a non-captive/eligible customer of the renewable electricity in the country of origin. This ef-

36 Source: Greenprices.nl and Milieuloket:

http://www.milieuloket.nl/99292000/modules/vg2chwjboxvf?key

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fectively means that renewable electricity may only be imported from European coun-tries, which have implemented at least retail competition for green electricity.

No double subsidisation

Importers of renewable electricity have to sign an importer’s declaration that the renew-able electricity for which the issuance of green certificates is requested has not been sold or subsidised as renewable electricity elsewhere. By thus earmarking imported GoO, they may be used to count towards the Dutch national target of 8,5% by 2010.

Other rules exist for GoO to count towards the indicative target under the RES-E Direc-tive. A bilateral agreement needs to be signed and the exporting country must agree not to count it towards its own target: “a Member States can only include a contribution from import from another Member State if the exporting state has accepted explicitly, and stated on the Guarantee of Origin … that this electricity can be counted towards the importing Member State’s target”37.

Metering data and plant verification

Metering data as well as information relating to the type of plant has to be provided to the certification body by the competent authorities in the country of origin. The Minis-try of Economic Affairs has listed all parties that have the authority to verify the type of plant and metering data, according to the national legislation and regulations in all EU Member States plus Norway and Switzerland.

Import capacity

Importers have to demonstrate that they have acquired sufficient transport capacity on the cross-border interconnectors to physically import an amount of electricity corre-sponding with the amount for which the issuance of green certificates is requested.

Renewable according to the definition given by RES-E Directive

The Netherlands accepts electricity generated by grid-connected sources qualifying as renewable under the RES-E Directive.


From 16.000 customers in 1996, the Dutch green electricity market had expanded to 3.0 million by October 200438, while an independent renewable energy information pro-vider estimated this number as being 2,8 million customers at the time of writing39. As the total size of the small and medium end-user segment is approximately 7,5 million, nearly 38% of Dutch domestic consumers had chosen green supply offerings by 2004. Evidently, the Netherlands has the largest green power market in Europe. This level of demand is the result of the financial support measures, combined with market liberalisa-tion and the media campaign promoted by environmental NGOs. 37 COM(2004)366 final, Brussels, 26 May 2004. 38 Source: Netherlands Ministry of Housing, Spatial Planning and Environment. 39 Source: Greenprices NL - www.greenprices.nl.

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Currently, nineteen of the twenty-one national electricity suppliers offer at least one green supply offering each40. However, although only one is certified as being “green” by the single independent labelling standard currently active in the Netherlands. The voluntary green power market expanded rapidly since July 2001, when market liberali-sation for the green electricity was established, with liberalisation of the entire electric-ity retail market following in July 2004.

The green electricity supply market in the Netherlands has become highly competitive within a very short time, offering green power at the same price (or lower) as standard electricity.

From 1999 onwards, the WWF had lent its logo and support to green electricity prod-ucts that it judged to be of a good standard. However, while WWF continues to support green electricity, it has withdrawn its label from the market completely in 2003.

A new voluntary green electricity labelling standard, “Milieukeur groene electriciteit”, was launched in January 2005 by the Dutch Environmental Control Foundation (Sticht-ing Milieukeur). The standard was developed in conjunction with electricity suppliers, consumer and environmental organisations.

7.7.2.1 Milieukeur groene elektriciteit

Background

The “Milieukeur groene elektriciteit” (Environmental Control Foundation Green Elec-tricity) label was introduced on 1st January 2005 and shall be reviewed by 1st January 2008, when additional requirements for hydro power and biomass will be included. SMK, formerly known as the Stichting Milieukeur or Environmental Control Founda-tion, and DNV (Det Norske Veritas), the internationally active independent verification organisation, jointly issue “Milieukeur groene elektriciteit”.

SMK is an independent organisation, incorporating experts from consumer and envi-ronmental organisations, producer and retailers groups, and government, which devel-ops and supervises environmental control standards under the “Milieukeur” logo for different products in the food, agricultural and non-food sectors. It was established in 1992 by the Ministry for Spatial Planning, Housing and the Environment and the Minis-try for Agriculture, Nature and Food Quality who are represented within SMK by ex-

40 Information taken from public information provided by the Dutch national energy regulator DTe:

http://www.dte.nl/nederlands/consumenten/vergunninghouders_netbeheerders_meetbedrijven/vergunninghouders_elektriciteit_kleinverbruik.asp.

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http://www.dte.nl/nederlands/consumenten/vergunninghouders_netbeheerders_meetbedrijven/vergunninghouders_elektriciteit_kleinverbruik.asp

http://www.dte.nl/nederlands/consumenten/vergunninghouders_netbeheerders_meetbedrijven/vergunninghouders_elektriciteit_kleinverbruik.asp


perts working in the labelling body’s different specialist teams41.

Label criteria

The label criteria of “Milieukeur groene elektriciteit” are laid down in a criteria docu-ment which is summarised on SMK’s website.


The Milieukeur labelling standard does not explicitly differentiate between the two main categories of green electricity products, supply offerings and fund offerings. How-ever, given the absence in the Dutch energy market of fund offerings dedicated to re-newable energy investment, it is assumed that by default the “Milieukeur groene elek-triciteit” standard currently applies only to supply (consumption)-based offerings.

Eligibility

The Dutch Electricity Law of 1998 (Art. 53) defined renewable energy as electricity generated from wind, solar PV, hydropower under 15 MW, and biomass. The non-organic fraction of waste is not considered a renewable energy source. The “Milieukeur groene elektriciteit” label regards the following renewable energy technologies as eligi-ble:

• Renewable energy sources as defined in the RES-E Directive:

- solar energy (photovoltaics);

- wind energy (on- and offshore);

- water (small-scale hydro plant, large-scale with qualifications as detailed be-low, wave and tidal energy)

- biomass42 (co-firing and advanced waste incineration, subject to strict condi-tions, specified below);

- landfill gas;

- geothermal energy

Verification of the origin for all renewable energy sources is based on GoO issued by CertiQ. As of 1st January 2004, CertiQ acts as Issuing Body for Guarantees of Origin in the Netherlands on behalf of TenneT, the national grid operator.

There are stringent restrictions on the eligibility of hydro power and biofuels. Hydroe-lectric plant may not exceed 15MW nominal capacity and owners must commit to mak-ing efforts to install fish conducting systems. Commitment is verified by submission of an annual technical report containing, at a minimum, the description of the plant opera-

41 SMK website: http://www.milieukeur.nl/nl-NL/default.aspx42 The Dutch 1998 Electricity Code defines biomass as the biologically degradable fraction of products,

waste and residues from agriculture, including plant and animal matter, forestry and related industry sectors, as well as the biologically degradable fraction of industrial and domestic waste.

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tor’s efforts, the results of the investigations and information on involved organisations.

‘Milieukeur groene elektriciteit’ imposes additional requirements to the ones estab-lished by the Dutch government on the import of biomass and the non-eligibility of some types of biomass. For electricity derived from biomass, requirements on installa-tion standards for the co-firing of biomass and on the type of biomass fuel input must be satisfied. The required minimum installation standards relate to ceiling emission outputs conforming to national emission standards as well to the Dutch Decree on Waste Incin-eration (Dutch acronym: BVA) of 2 March 2004 in the case of “polluted”43 biomass, and are distinguished between coal power plant and all other fossil-fuel fired plant. Verification of compliance with the requirements is achieved by submission of emission reports and, in the case of biomass co-firing with coal, also fuel reports. Fuel reports have to provide mathematical calculations as proof that the fossil fuel fraction did not exceed a specific threshold value. Imports of electricity from biomass co-fired in plants other than coal-fired must be accompanied by emission reports whereas such plant in the Netherlands do not need to undergo additional testing.

Only “pure biomass”, i.e. the wholly biodegradable fractions of biomass and of indus-trial and domestic waste, can be used as feedstock for consideration under the GE.1 label. Moreover, “animal or animal-related biomass”44 is permitted, if the biomass is derived from a process whose main product is compliant with Environmental Control45 or EKO criteria. Mixed waste and sewage purification silt are excluded as fuel inputs.

Additionality

The “Milieukeur groene elektriciteit” labelling standard adopts the view accepted by the Dutch government that all electricity generation based on renewable energy sources located in the Netherlands is additional as demand far outstrips available supply. Con-sequently, no restrictions in terms of Dutch public funding or of plant age are imposed on certified green electricity products. In contrast, additionality criteria are cited for the import of green electricity from other European countries (EU-25 plus Norway and Switzerland). To be eligible for SMK certification, imported green electricity may not receive public subsidies or be sold as green electricity in the exporting jurisdiction.

GoO are the exclusive proof for green electricity products and are redeemed once they have supported a green electricity offering.

43 “Polluted biomass” means road verge grass and all biomass which does not fall into the category of

“clean biomass”, as defined in the Decree on Waste Incineration (BVA). 44 “Animal or animal-related biomass” refers to biomass which falls within “fertiliser”, “animal fats and

oils” and “mixtures of fats and oils (incl. animal)” of the Dutch Technical Regulation (NTA) 8003:2003 “Classification of biomass for energy application”.

45 The SMK (formally Stichting Milieukeur or Environmental Control Foundation) is also responsible for establishing labelling schemes in accordance with environmental control criteria for other sectors, such as agro/food.

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The “Milieukeur groene elektriciteit” label only allows imports to be marketed as a green electricity product and to be used as evidence of additional renewable generation, if they are sourced from other European Union Member States (MS) or non-EU coun-tries which have committed to bilateral agreements with the Dutch government on at-tributing imported renewable electricity to the country where it is consumed. This con-dition rests on the earmarking requirements for the import of GoO. The import of green electricity is subject to the same criteria as renewable electricity generated in the Neth-erlands. In the framework of renewable energy, the exporting country shall deduct the exported electricity in its reports to the European Commission. This measure aims to avoid the risk of multiple counting of renewable energy attributes. This is in line with the clarification given by the European Commission to the RES-E Directive, stating that trade of GoO can influence national indicative targets while maintaining the EU um-brella target if the trade in GoO is underpinned by bilateral agreements between the exporting and the importing MS.

However, the Dutch government has not yet signed bilateral agreements with other countries specifying the rules with regards to national indicative targets at the time of writing; but preliminary discussions are ongoing. Therefore, currently no imported green electricity is counted towards the Dutch indicative target of 9% by 2010, and none can be included in a “Milieukeur groene elektriciteit” certified product.

Verification of the eligibility of imports is realised by a GoO from issuing bodies affili-ated with the Association of Issuing Bodies46 under RECS International, together with evidence from the relevant authorities that the exporting country shall deduct the quan-tity in question from its national statistics when reporting to the European Commission (earmark on the GoO). The GoO issued for imports must meet the same standards as those met by Dutch GoO.


RECS certificates, developed by the voluntary RECS International initiative, are not eligible to be marketed as “Milieukeur groene elektriciteit” labelled green electricity products because they cannot be converted into GoO for proof of origin purposes.

However, if RECS certificates have been verified as conforming to criteria under the European Energy Certificate System (EECS)47 by an EECS Issuing Body outside the Netherlands, they can be imported into and accepted in the Netherlands as GoO. This is

46 The AIB is the international alliance of RECS Issuing Bodies and is responsible for approving and

accepting all Issuing Bodies wishing to issue internationally acceptable RECS Certificates. 47 The EECS was put in place in 2004 and currently has five countries accepted as eligible, namely

Finland, Sweden, Denmark, Netherlands and Austria while two are conditionally eligible: Germany and Norway.

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because an EECS conforms to all GoO requirements as is laid out in the EECS Basic Commitment document48.


GoO are the sole proof of renewable origin for green electricity offerings, since the vol-untary system of green certificates was replaced by the “environmental quality of elec-tricity production” (MEP) policy mechanism in 2003.



RES generators: No legal obligations are imposed nor rights granted to RES-E produc-ers in relation to the “Milieukeur groene elektriciteit” standard.

Green electricity suppliers: Green electricity suppliers are required to seek written approval from the licence-holding certification body appointed by the SMK in order to become eligible for the labelling scheme. Only those suppliers whose products comply with the eligibility criteria set out by SMK in the certification outline and with the gen-eral principles for labelling examination and supervision detailed in the SMK Manual are eligible to be accredited for “Milieukeur groene elektriciteit”.

Based on the submitted information and documents the certification body assesses whether the application complies with the eligibility criteria of the labelling scheme.

If the application meets all criteria the supplier will conclude a contract with the li-cence-holding certification body (currently DNV). By signing the contract the electric-ity supplier acquires the right to use the Milieukeur logo in its publicity material and becomes a certificate holder. The certificate is valid for a period of twelve months. The Milieukeur accreditation is extended subject to the successful outcome of the annual audit, upon which a new certificate is issued. The certificate holder commits to fulfil the requirements related to the certified product and to implement appropriate measures. If, once a certified green electricity product has been supplied, it is found to have not com-plied with the certification requirements, the supplier must inform the licence holder immediately.

If any possible changes to the certified product are planned once accreditation is granted, the certificate holder is required to have the licence holder audit the modified green electricity product for compliance with the certification requirements before it can be marketed with the Milieukeur label.

Sanctions in response to any infringements of the certification requirements are detailed in the section on “Auditing and verification procedures”.

Licence holder (Certification Body): SMK grants the contractual right of approving and issuing “Milieukeur groene elektriciteit” certification to specific certification bod-

48 EECS Basic Commitment: http://www.members.recs.org/documents/EECS_BC_-_Release_1-2.pdf

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http://www.members.recs.org/documents/EECS_BC_-_Release_1-2.pdf


ies, the licence holders. The only licence holder currently contracted by SMK is Det Norske Veritas (DNV Certification BV). However, certification licenses are not exclu-sive and may in the future be granted to additional certification bodies49. It is the role of the licence holder to determine whether the considered electricity product’s generation or production process observes the labelling requirements. This accreditation appraisal initially takes place before the product is certified for the first time and is repeated an-nually for the technical audits. Irregular control examinations take place in the event of complaints received by the licence holder. The licence holder is obliged to make the renewal of the Milieukeur accreditation contingent on the certificate holder’s compli-ance with the effective requirements of the labelling standard, the certificate holder’s observance of the labelling contract and the existence of valid certification schemes for green electricity. The certification and audit staff appointed by the licence holder must possess a minimum level of technical training and an understanding of environmental assessment, which must be supported by diplomas, training certificates or demonstrated experience in the field of environmental assessment. The certification staff must also have at least two years’ experience in product inspection, i.e. in quality control, labora-tory, product certification, inspection organisations or similar.

SMK has the right to withdraw the right granted to the licence holder if the licence holder has damaged reputation of the Milieukeur logo.

Auditors: Currently, the required technical audits for each product accredited by the labelling standard are carried out by DNV which is also currently the only licence-holding certification body for the “Milieukeur groene elektriciteit”. No separate inde-pendent auditor has been appointed. The technical audit reports are part of the annual audit reports. All certification bodies granted a licence to issue Milieukeur product la-bels by SMK are accredited by the Accreditation Council and have certified their exper-tise, trustworthiness and their objectivity. The audits are performed according to the European Standard for the operating requirements and accreditation of certification bod-ies (EN45011).


Tracking mechanism

Electricity suppliers are required to prove that they have purchased sufficient green electricity to comply with the labelling standard’s criteria.

The only possibility to do this is to redeem the equivalent number of GoO (expressed in kWh) with the Dutch issuing body, CertiQ. For renewable energy generated in the Netherlands, GoO must be used which have been issued, registered and redeemed by CertiQ. For imports of renewable energy generated overseas, GoO which have been standardised by CertiQ, as a member of the Association of Issuing Bodies (AIB), ac-cording to the standard accepted by the Dutch authorities.

49 Personal communication with SMK, 15 August 2005.

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If the supplier offers more than one green electricity product a separate redemption ac-count is created for each certified product.


The general principles for product certification and auditing are described in the SMK Manual. These principles also apply to the “Milieukeur groene elektriciteit” certifica-tion process.

In general, the electricity supplier must provide the following information to the licence holder:

• Description of the certified product in terms of sources, country of origin and, in the case of biomass, a list of the fuel inputs

• If a mix of sources is supplied, the minimum and maximum percentages of each source much be stated

Audits must comprise the following aspects:

• Electricity balance, in particular the total sales volume in the labelling period

• Plant specific aspects (of all funded RES-E plants) including the commissioning date, technological data (e.g. capacity, expected and actual net generation volume)

The green electricity supplier’s accountants must provide the licence holder with accu-rate information on the supplied amount of certified green electricity during the audited twelve month period. The supplier must keep records of registered green electricity con-tracts. A separate contract must be administered for each green electricity customer. If the supplier offers several green products, separate records of the supplied green elec-tricity must be kept for the green product which is accredited by the labelling scheme.

The supplier must clearly state the product’s composition, in terms of energy sources and its origin (whether domestic or foreign). Verification of the product composition is done on the basis of the redeemed GoO.50

The supplier shall keep a complaints file for complaints regarding the certified green electricity product.

Auditing of both the supply volume and of the product quality shall take place on an annual basis. Following a successful audit, the right to use will be granted for a further twelve month period and a corresponding certificate.

Complaints will be evaluated during each annual inspection. Interim audits shall take place if called for by complaints. The annual and interim audits give rise to a result of non-compliance if the audit findings show a negative deviation from the standard.

The licence holder will then set a deadline for compliance within the subsequent label-ling period. If this is not fulfilled to the licence holder’s satisfaction, sanctions will be imposed. 50 The information contained in the GoO might vary depending on the country of origin and the regula-

tory requirements established for GoOs in those countries.

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Sanctions in response to any infringements of the certification requirements or to the fraudulent use of the Milieukeur label or fraudulent insinuation of Milieukeur certifica-tion are outlined in the SMK Manual and summarised here. The licence holder is enti-tled to take the following punitive measures against infringing certificate holders:

• To oblige the non-compliant party to withdraw the misleading products from circu-lation and to extensively publicise this action in the media.

• To undertake an interim audit for all related Milieukeur accredited products main-tained by the supplier. The costs of this interim audit will be incurred by the sup-plier.

• To impose a fine on the supplier, payable to the licence holder, amounting to the incurred or expected annual certification remittance to SMK as well as a similar fine for every lapse in compliance with the certification requirements, without the li-cence holder needing to prove any damage incurred through the supplier’s actions.

Certification costs

Three categories of costs are incurred in the accreditation with the “Milieukeur groene elektriciteit” standard:

• Initial one-off application fee payable to SMK, which currently stands at EUR 470.

• The audit costs imposed by the licence holding certification body DNV. These are contingent on the complexity of the certification and audit requirements for each eli-gible renewable energy source51 and on the completeness of the documentation provided by the electricity supplier.

• Fee for use of Milieukeur logo payable to Milieukeur. This is dependent on the cer-tificate holder’s annual turnover with a differentiated pricing structure: 0,1 per cent of turnover up to EUR 25 million and 0,075 per cent of turnover above EUR 25 mil-lion with a ceiling fee of EUR 20.000. The relevant turnover is calculated as the sum of the commodity sale price of the certified green electricity product and the sale price of the GoO. Transmission and distribution costs and all duties are not in-cluded.

Consumer information

The certificate-holding green electricity supplier must provide clear and transparent information to its clients. This means the following conditions has been observed:

• Description of the certified product is easily accessible on supplier’s website and on consumers’ annual bill.

51 The imposition of stringent eligibility conditions on biomass means that auditing of a biomass-based

green electricity offering will usually be more costly than the auditing of a wind power based product (Personal communication with SMK, 15/08/2005).

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• The product must be described in terms of sources, country of origin and, in the case of biomass, a list of the fuel inputs.

• If a mix of sources is supplied, the minimum and maximum percentages of each source much be stated.

Market Impact

Since the labelling standard’s launch in early 2005, the larger of the Netherlands’ two exclusively green electricity suppliers, Greenchoice, with 120.000 customers, has been certified with the “Milieukeur groene elektriciteit” label. There is no publicly available information available on the amount of electricity supplied.


“Milieukeur groene elektriciteit” fulfils the majority of the criteria set forth in the tech-nical document for accreditation to the Eugene Standard. The labelling standard speci-fies eligible renewable energy sources within the definition of the Eugene Standard, especially with respect to the rigorous eligibility criteria for biomass installations.

However, the labelling standard does not offer specific guidelines on environmental additionality. While not imposing any restrictions on Dutch RE generation for proving additionality conforms to Dutch government policy (see section on additionality), this is not necessarily enough to comply with the Eugene Standard. Imports of renewable elec-tricity, which account for the majority of RE consumption in the Netherlands, must comply with strict additionality rules. Imports cannot have received public subsidies (or have been sold as green electricity in the exporting country) and must have GoO ear-marked so that it can be counted towards the Netherlands’ indicative target. For supply offerings the Eugene Standard clearly excludes any publicly funded RES-E generation from being additional. The investment security provided by a feed-in system is likely to be the main driver for RES-E expansion, rather than voluntary demand.

In terms of interaction with government legislation, there is no explicit mention of the eligibility of publicly funded plant, e.g. which receive MEP subsidies, for certification under “Milieukeur groene elektriciteit”. Nonetheless, personal communication with SMK did confirm that certified products are not subject to a maximum share of publicly funded plant nor are there any requirements on the age of eligible plant. In contrast, as mentioned above, imported green electricity may not have been generated by publicly funded plant and must be “new” plant, although no specific definition of “new” plant is provided by SMK. This is likely to be forthcoming when the Netherlands signs its first bilateral agreement with another country and establishes the calculation of their respec-tive national targets.

The verification of green electricity claims is performed by the licensee (licence holder) who is appointed by SMK and is simultaneously the certification body. The current li-cence holder DNV is not a public accountant. There is no specific mention in SMK’s Manual of random audits of the licence holder by SMK. Contrary to Eugene Standard guidelines, fraudulent use of the Milieukeur logo does not automatically result in the withdrawal of certification, but instead sanctions are imposed in the first instance.

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7.8 SLOVENIA


7.8.1 Introduction

The Slovenian Parliament amended the Energy Law of Republic of Slovenia in April 2004. All the requirements foreseen by the Directive 2001/77/EC of the European Par-liament and of the Council on the promotion of electricity produced from renewable energy sources in the internal electricity market are included in the latest changes. Slo-venia has a target of 33,6% of RES electricity by 2010. From early 2002 a system of feed-in tariffs has been in operation based on priority dispatch of qualified production. Network operators are obliged to conclude long-term feed-in contracts with qualified producers (QPs) i.e. generators with either high energy conversion ratio (that is speci-fied for each technology by governmental decree) or those that are generating power from renewable sources.

The governmental decree defining the rules and procedures for issuing the Guarantees of Origin (GoO) for electricity is currently under preparation. The following elements are being considered:

• The Issuing Body will be the Energy Agency of the Republic of Slovenia (Javna agencija Republike Slovenije za energijo established in the Energy law).

• The system should be compatible for other national systems by linking it to the European Energy Certificate System standard of the AIB.

Despite the fact that there is no legislation that demands the redemption of RECS cer-tificates or GoO to prove the consumer that electricity is supplied from a renewable source RECS certificates are used as a base for the major label on the national voluntary market “Modra energija” (Blue Energy, see below). There are three other certification schemes for green electricity in Slovenia (non of them using certificates):

• Zelena elektrika (green power), by Eco-Watt, a private company supplying power from private small HPP with status of qualified producer: the certificate for green electricity is issued by Ekowatt itself

• Zelena Energija (green energy), by Elektro Ljubljana, marketing and selling under this label the electricity from their own small HPP

• ZEL1 by Elektro Celje.

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7.8.2.1 Modra energija - Blue Energy

“Modra energija” (Blue Energy) was developed in August 2004 by Holding Slovenske Elektratne d.o.o. and distributing companies. Other electricity producers and experts were invited to cooperate. The biggest electricity producer HSE d.d. (Holding of Slo-vene “system generators”) includes all the major power generators in the country except NPP Krško and CHP TE-TO Ljubljana.

HSE offers opportunity to the end users to buy green electricity through all five main distributor companies: Elektro Ljubljana, Public Enterprise for Distribution of Electrical Energy, Elektro Primorska, Elektro Gorenjska, Elektro Maribor or through the producer company itself HSE Holding Slovenske elektrarne.

Label criteria

Eligible products

The energy is generated from old hydro power plants operated by HSE group compa-nies: Dravske elektrarne (on Drava River), Savske elektrarne (on Sava River) and Soške elektrarne (on Soča - Isonzo river).

Only electricity from Slovenian hydro plants is eligible, all the plants are participating in the RECS system. Each plant has a ‘renewable declaration’, the compliance with in-ternational standard criteria is regularly checked by the Energy Agency of the Republic of Slovenia and the TÜV. There are no additional requirements beyond compliance with related environmental protection legislation

Additionality of supply offerings

The earnings from the extra charge are collected in a special fund for the support of sustainable energy in the field of electricity generation: research activities, awareness raising, pilot and demonstration projects etc. However, investment decisions are taken internally by HSE, there is no public control or public participation in how these deci-sions are taken.

The government does not regulate the voluntary market. There is no regulation in place that obliges suppliers to redeem GoO (or RECS certificates) when delivering green products to the customer.


Imports are not eligible.

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HSE is labelling this energy and marketing/selling it to the consumers through con-tracts, either to its direct costumers, or through public distribution companies that are on contractual basis supplying the consumers. The National Energy Agency (market regu-lator) is controlling exports of RECS and this year, for the first time, will control the annual balance of “Modra energija” for 2005. The audits of the generating facilities are carried out by the German TÜV.

All customers can buy “Modra energija”. For HSE direct consumers the contract is made directly with HSE, larger eligible consumers can opt to get a status of direct sup-plier by HSE, while tariff consumers are contracted trough distribution companies ex-clusively, while the latter have contracts with HSE. The labelling fee is a part of the 40% surcharge that is issued for so called "Modra energija administrative costs": usual administrative costs, the costs of RECS certification procedures and the costs of market-ing.

It is also possible to have only a specific share covered in Modra energija, but it can not be less than 10% of the overall customer demand.

Market Impact

The national voluntary market has just started and has a volume of approximately 30 GWh per year. Total production in Slovenia in 2004 was 10.800 GWh. By the end of 2004 more than 500 enterprises decided to purchase “Modra energija” and in the com-ing years this number is expected to increase rapidly.


Introduction of eligibility criteria for large hydropower and environmental additionality would be required to consider a possible compatibility to the Eugene Standard.

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7.9 SPAIN

Heikki Willstedt (WWF Adena)

Although there are for the moment no green electricity ecolabels in Spain, there is a great interest by the consumer in the establishment of such labels in order to have a tool to support sustainable energy systems. It is expected that existing green electricity tar-iffs might become labelled products in the mid-term.

7.9.1 Introduction

In 2004 a share of 22% of the final electricity consumption in Spain was produced by renewable energy sources (RES), mainly from large hydropower (13%) and wind en-ergy (6,5%) – biomass 0,7%, small hydro 1,9% and photovoltaic only 0,007% (CNE 2005). The voluntary participation by RES generators until 2004 in the electricity mar-ket has been very scarce: only 2,6% of the total RES generation (excluding large hydro) was sold to the electricity market operator52. Nevertheless, this situation is starting to change as a consequence of the impact produced by the changes introduced into the Special Regime’s financial support.

Since January 2003 any electricity consumer is able to choose his own power supplier. At this moment more than 50.000 domestic consumers have switched to one of the green power products existing in Spain, which amounts to an annual market volume of over 1,5 TWh. The most relevant green energy product in Spain, Iberdrola’s Green En-ergy, is mainly fed by hydropower plants put into operation long time before the Span-ish electricity market was liberalised.

The Spanish power generation organization.

According to the Spanish power sector’s law, electricity produced from renewable en-ergy sources (RES), waste and combined heat and power devices is supported under the Special Regime. This means that they are provided with a different treatment compared to that generated from conventional energy sources (coal, oil and nuclear plants) which integrate the Ordinary Regime. The Special Regime’s legal and economical characteris-tics are regulated through the Royal Decree 436/200453.

Renewable electricity sources eligible under the Special Regime are wind energy (on-shore and offshore), solar thermal and photovoltaic, hydropower (no more than 50 MW) and biomass, included energy crops, biofuels, landfill and sewage gas. Those renewable installations with more than 50 MW of installed capacity must compulsorily sell their energy production to the electricity market, as ordinary regime’s plants do, whilst those

52 60% including large hydro. 53 RD 436/2004 of 12th of March 2004, establishing the methodology for the updating and systematisa-

tion of the legal and economic system of the electric energy production in the special scheme, which amends the previous Royal Decree 2818/1998.

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with less than 50 MW can choose between selling their electricity production to the market or to the grid operator.

The feed-in system is the main financial support to RES generation in Spain, which dif-fers among technologies and installed capacities and is updated by the government in annual terms through the average reference tariff (TMR). The Royal Decree 436/2004 holds a different degressive price element in the course of time, so feed-in tariffs are reduced 90%, 85% and 80% over the TMR according to technologies and year of start-ing operation. For most eligible RES facilities the feed-in tariffs are guaranteed for a period of 20 – 25 years beginning from the year the plant started to operate.

The Spanish green electricity market.

As it was mentioned above, the current regulation holds two modalities for selling and redistributing economically green electricity production:

Producers can opt to sell their production or their surplus electricity (in case of cogene-ration plants, the electricity above their own consumption) directly on the market (being mandatory for renewable facilities with more than 50 MW) and make offers through the electricity market operator (OMEL), bilateral agreements or a mix of them.

Producers can decide not to take part in the power market, in that case the grid operator whose grid is closest to the location of the RES installation must buy all their produc-tion or surplus.

Figure 6: Spain - Sketch of the Spanish power market operation and economical retribution modalities

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In the first case producers receive the price resulting in the organized market, “the elec-tricity pool” (or the price agreed), complemented with an incentive for participating in the market and a premium if the installation is entitled to receive one. This incentive and the complementary premium are defined as a percentage of the TMR. In the second case producers receive a regulated or fixed price per kWh injected into the grid, defined also as a percentage of the TMR and therefore indirectly based on the production mar-ket price. Producers with new RES installations set up after March 2004 can not opt to the electricity pool’s market price and a premium system which was established under the previous regulation54.

RES producers, whether they decide to take part in the electricity market voluntarily or not, must communicate beforehand their own predictions on how much energy they are going to sell, as producers under the ordinary regime do, and can be penalised in case the programmed supply and the real supply don’t coincide55. The present regulation tries to equalize and put both types of generation regimes nearer, in order to provide more technical security to the system. As this situation can suppose disadvantages RES producers have the possibility of making offers in a grouped form, so they can compen-sate the differences between programmed and real supply.


Many power supply companies have just started to sell green electricity in Spain, in spite of there is still no approach taken to implement a Guarantee of Origin system in accordance to the RES Directive (Dir 2001/77/CE), which hasn’t been implemented yet into the Spanish rules. At this moment more than 50.000 domestic consumers have al-ready purchased one of these green energy products although there’s no certainty whether they are paying real green kWh. In practice several companies are using RES certificates as proof of origin of their green electricity supplies, although these green certificates are just the result of private agreements between the power market agents and lack of any legal framework in Spain.

No legal tools have been implemented yet in order to force electricity supply and distri-bution companies to provide their customers with detailed information about the origin of the energy they are consuming and the environmental impacts of the different genera-tion technologies used, as Directive 2003/54/CEE obliges. Nevertheless, the Parliament has recently approved a motion for its implementation in the near future. This kind of information would allow customers to make informed purchased decisions and choose a green energy product which better fitted with their own needs and expectations.

54 Royal Decree 436/2004 has eliminated this option chosen by the most of the RES producers, who

have now a transitory period until 31th of December 2010 for adapting to the new economic regime. Through the electricity pool’s market price and a premium system producers received an incentive over the negotiated market price per kWh injected into the grid. It has been precisely the system that has contributed the most to the expansion of RES generation in Spain along the last few years, spe-cially wind power.

55 Penalties depend on RES generation technologies. For those producers opting not to sell their energy production directly on the market, only RES devices with more than 10 MW of installed capacity must communicate their predictions.

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In view of this, it’s really urgent that the Spanish government implements both Direc-tives as soon as possible to enhance the transparency of the electricity market, allow customers to make informed purchased decisions and guarantee the renewable origin of present and future green electricity sales in the Spanish market.


At this moment no operational labelling system for green electricity products exists in Spain although some initiatives have emerged to implement it. This is the case of the environmental organization WWF-Spain, which since 2003 is promoting the implemen-tation of a national labelling scheme for green electricity products based on the criteria promoted by the European Green Electricity Network (Eugene), which have been suc-cessfully implemented in other European countries as Germany and Switzerland in or-der to satisfy new market demand for environmentally credible green electricity prod-ucts. The minimum requirements that a Spanish labelling system under the Eugene Standard should fulfil can be consulted in www.eugenestandard.org/_files/ILI%Draft%20Guidelines.pdf.

This label would become an effective distinctive to show all electricity consumers that the green electricity they are purchasing has been generated exclusively from RES in-stallations which fulfil several strict ecological criteria, and that the surcharge they are paying for that electricity is only addressed to new renewable investments or, in the case of large hydropower plants, to improve the ecological quality of the river system.

A national labelling scheme for green electricity products under the Eugene Standard could effectively contribute to increase the sales of authentic green electricity from re-newable and low impact facilities in Spain.

Contact: WWF/Adena’s Climate Change Area. Gran Vía de San Francisco 8 - esc. D. 28005 Madrid (Spain). Phone: +34-913540578. Fax: +34-913656336. www.wwf.es.

7.9.3 Green electricity tariffs

Since there is no operative labelling system yet in Spain to enable customers to choose credible green electricity tariffs which effectively contribute to sustainable develop-ment, and in view of the slight number of the existing green electricity tariffs in the Spanish market (just three), it has been considered of great interest to show the most remarkable features of these products in order to study their compatibility with a na-tional labelling scheme based on the criteria promoted by the Eugene Standard.

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http://www.eugenestandard.org/_files/ILI%25Draft%20Guidelines.pdf

http://www.wwf.es/


7.9.3.1 Endesa’s Green Electricity Tariff and Iberdrola’s Green Energy

Endesa and Iberdrola are the two main and leading companies of the Spanish power sector with a long experience in conventional energy sources generation and other ac-tivities including electricity transmission, marketing and distribution of electricity in Spain and other several countries. Although their electricity production comes mostly from fossil fuels they also have investments in RES devices, principally large hydro-power plants. Endesa reached in 2004 5.385 MW from large hydro and 1.672 MW from RES facilities (22,4% and 7% of its total installed capacity) (ENDESA 2004). On the other hand, Iberdrola owns an important renewable generation capacity with 9.083 MW from large hydro and 3.026 MW from RES devices, which represented 36% and 13% of its total installed capacity in 2004 (IBERDROLA 2004).

Both companies launched in 2003 their own green power products –the Green Electric-ity Tariff (GET) and Iberdrola’s Green Energy (IGE), from Endesa and Iberdrola re-spectively -, and initiated a strong advertising campaign mainly targeted at domestic energy consumers, who since January 2003 are now able to choose their electricity sup-plier.

These two green electricity tariffs share a common philosophy and operational charac-teristics. Each company assumes the compromise of covering their customers consump-tion with electricity generated from 100% renewable energy sources, free from CO2 emissions and other greenhouse gases (Endesa, furthermore, will plant 10.000 native tree species in areas of ecological interest, and one more for each new customer that purchases GET). To ensure the greenness of both green energy products the companies acquire the corresponding RECS certificates as proof of origin, issued in Spain by the Spanish Electricity Grid (REE). Additionally a verification procedure takes place by an external auditor56, who verifies annually that the energy purchased by the company does not exceed the energy certified in origin. With this dual certification Endesa and Iberdrola prove the renewable origin of their green energy sales

Both green energy products are fed with the electricity produced in large or old hydro-power plants, and in the case of Iberdrola also from some small hydro. This means that Endesa’s and Iberdrola’s green electricity is not supported under the Special Regime as these facilities do not receive any public funding to promote electricity generation from renewable sources, a key condition to generate RECS certificates.

Concerning green energy pricing, both tariffs have a surcharge over the base tariff to the final customer: 2,45% in the case of GET and a 12,5% in the case of IGE. For an aver-age domestic customer this involves between 3 and 6 € more each year (GET) and up to 56 Deloitte&Touche (Endesa) and Bureau Veritas (Iberdrola).

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30 € more (IGE). These surcharges are then invested in management expenses as cer-tificates and external auditing costs, as well as the costs generated by the plantation of native tree species (Endesa).

Both GET and IGE have been controversial issues since they were launched and have

in campaigns,

Market impact

ales statistics are not available. In 2004 Iberdrola supplied approxi-


no completely compatible with the Eugene Standard, as green-

renewable

set a precedent in the Spanish green electricity marketing. In 2004, the National Energy Commission started an informative proceeding against Endesa and Iberdrola in response to the reports presented by various consumer associations and environmental organisa-tions, based on the information that both companies provided in their respective green energy advertising campaigns, the doubtful greenness of the products and the real bene-fits that this kind of green tariffs gives to customers and the environment57.

Finally Endesa and Iberdrola had to change their green energy advertis galthough the messages to customers and the product qualities have hardly changed, cir-cumstances which continue being criticised by numerous environmental and consumer organisations. This is an example of the negative effects caused by the delay of transpo-sition of the above mentioned Directives, but it also proves the benefits that the imple-mentation of a national labelling scheme based on the Eugene Standard for green elec-tricity products could have in Spain.

Endesa’s GET smately 1.489 million of kWh of IGE, from which 1.230 million of kWh were sales to energy companies from several European countries. Iberdrola has signed a total of 54.000 green energy supplying contracts (52.900 with domestic consumers and 1.100 with companies and official institutions). At this moment Iberdrola is leading the green electricity market in Spain.

Both GET and IGE are ness of the products is not assured. In this way, some specific requirements would be needed to become labelled products accredited against the Eugene Standard.

GET’s and IGE’s green electricity come from large hydropower plants, a energy source eligible under the Eugene Standard if minimum ecological requirements are fulfilled. Large hydro (> 50 MW) operate under the Ordinary Regime, which means that it is not eligible to receive public funding under the special regime58, so these green products could comply with the Eugene Standard in the way they can contribute to ex-tend electricity generation from renewable energy sources over and above what is man-dated by public support. However, environmental additionality is not guaranteed in any

57 The National Energy Commission concluded that both green energy advertising campaigns could be

considered as deceitful and be used as an instrument to get new customers. The full document can be consulted in http://www.cne.es/pdf/cne11_04.pdf.

58 Large scale hydro plants with a declared net capacity of 50 MW or more have to operate under the ordinary regime and receive only a small bonus above the market place.

95

http://www.cne.es/pdf/cne11_04.pdf


of these two tariffs, because it is not demonstrated whether both companies invest the plus they charge for their customers in significant improvements of the local and re-gional ecological quality of the river system in excess of legal compliance59, or either in supporting new renewable power plants.

With regard to the RECS certificates used by both companies in their auditing proc-

elled green electricity products must pro-

7.9.3.2 Electra Norte’s Green Energy

esses, the Eugene Standard lets them to be used as proof of origin of the green electric-ity products. Nevertheless, RECS certificates do not guarantee the quality of the power received or the additionality of the green energy product, as these criteria cannot be verified based on the information content on RECS certificates, so identification of the respective RES devices is required. Moreover there’s a risk of double counting of the environmental benefits for which these certificates were issued, as no system of Guaran-tees of Origin has been foreseen yet in Spain.

Finally, the Eugene Standard requires that labvide some minimum information requirements to the customers60, in order to provide transparency about their products and allow them to make informed green energy pur-chase decisions. Neither Endesa nor Iberdrola have provided until now this kind of in-formation, as can be assessed by the constant disapproval showed by many consumer and environmental organisation against the advertising green energy campaigns devel-oped by these two electricity companies.

Electra Norte is a relatively small power company compared to the previous companies,

om renewable energy sources sup-

which exclusively generates and supplies electricity produced from renewable energy sources. Electra Norte has no investments interests in fossil and nuclear generation ac-tivities nor high environmental impact facilities (large hydropower)61. It was the first power company to supply green electricity in Spain.

Electra Norte’s green electricity is solely generated frported under the Special Regime –wind, photovoltaic and small hydro- coming from the Electra Norte’s System (SEN) integrated by its own power stations and those of col-

59 Currently the Eugene Standard is investigating whether a common method for assessing the eco-

standard of hydropower plants can be established across Europe. 60 The customer information must include: 1) a disclosure statement that lists the fuel sources from

which the electricity in the offering supplied will be generated, and 2) an annual report that includes data on the resources used to generate the past year’s electricity purchased bya the customers. These statements shall be provided with all specific marketing materials and billing statements, and not less than once a year.

61 Electra Norte is a PowerSwitch! Pioneer of WWF-Spain. The goal of the PowerSwitch! Campaign is to get governments to cut CO2 pollution from coal power stations and force a switch to cleaner and more efficient power.

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laborating companies (with no investments interests in contaminant and high environ-mental impact generation activities either).

The company guarantees that all electricity supplied to their customers is backed up

ing, Electra Norte’s green energy has an annual surcharge to customers

act energy sources,

n and operation

• be located in Spain.

ltaneously in pollution generating installations.

• ents.

Market impact

ctricity production that supports green energy supply to customers is


ectricity is the only of the three green energy products presented

, it must be assured that the environ-

ligations.

annually by 100% renewable electricity produced in SEN devices. To verify this com-mitment an external certifying company audits the procedures every year (Bureau Veri-tas) and emits a report certifying that they have produced at least as much renewable energy as they have sold. For each new customer, Electra Norte finances also the plan-tation of a tree.

Concerning pricof about 10% over the basic tariff. The customer’s bills include detailed information about the energy sources where the electricity supplied comes from.

Electra Norte’s green electricity not only is produced from low impbut there are some strict conditions that every SEN utility must fulfill:

• Environmental criteria have to be considered into constructioprocesses.

Plants must

• Owners must not participate simu

• They must be members of the Spanish Association of Renewable Energy Pro-ducers (APPA).

Finally, they must have a plan for future new renewable investm

SEN’s annual eleabout 3.343 GWh: 94,7% from wind, 4,4% from small hydro and 0,9% from photo-voltaic. In 2004 this production covered 1,4% of the Spanish total electricity demand.

Electra Norte’s green elhere that could comply with the standards promoted by Eugene. The company presents a range of strict criteria to make sure of the greenness of its energy product and has al-ready reached an agreement with WWF/Adena to start a pilot project to supply green electricity based on the Eugene Standard scheme.

In order to fully comply with the Eugene criteriamental additionality requirement is met over and above governmental renewable legis-lation (spanish incentive tariff scheme). As green electricity is generated by renewable energy sources which receive public funding, it should be assured that the premium charged to customers is being spent for supporting new eligible RES devices disregard-ing as to whether the respective power plant is funded under the special regime, and it’s really contributing to increase renewable power generation over RES national legal ob-

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7.10 SWEDEN


7.10.1 Introduction

The yearly electricity consumption in Sweden is 154 TWh. The renewable production support about 50% of the consumption whereas the nuclear power or imports in case of dry years, adds the remaining part. The renewable production equals 65 TWh where 90,2 % is hydro power, 8,5% biomass, 1,3% wind power. There is some photovoltaic production but this is negligible in the total system.

Sweden has a large share of renewable electricity mainly from hydro power. There is approximately 700 hydro power plants above 1,5 MW and about 1.500 plants below this threshold producing in average 67 TWh during the last 10 years. The variation in hydro power production is however large from 52 TWh in 2003 up to 78 in 2001 which means that import and export are large, mainly within the Nordic countries.

The Swedish electricity market was deregulated on the first of January 1996. The de-regulation created new opportunities for Swedish consumers to sign contracts with any supplier within the country connected to the grid. Initially, hourly metering was de-manded which restricted the mobility of the consumers on the market. From November 1, 1999 household consumers have been allowed to have their hourly consumption cal-culated on the basis of annual consumption and standard typical consumption profiles. Today, migration from one supplier to another is simple and without costs for the con-sumer. Already in 1996 renewable products were available on the market as Bra Mil-jöval-labelled electricity. Today about 15 TWh is sold as renewable products on the voluntary market which equals 10% of the total consumption in Sweden. The dominat-ing renewable product is Bra Miljöval labelled electricity (70% of the renewable mar-ket) but also renewable electricity with environmental product declarations, EPD (11%) occur together with production specified renewable electricity (19%).

The largest consumer groups of this type of products are municipalities and government agencies together with business customers. Household consumers are still not very ac-tive on the electricity market. The dominating suppliers of this green products are For-tum, Sydkraft/Eon and Vattenfall. There are however a few companies which have fo-cused their entire sales one renewable products, like Falkenberg Energy with 100% eco-labelled electricity and Kraft&Kultur with 50% ecolabelled electricity and 50% hydro power. The voluntary market for renewable electricity decreased in 2003 after many years of a rapid growth, due to the introduction of a national support scheme based on certificates and a consumer quota. Presently, the voluntary market for renewable is growing again.

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The Renewable Energy Law

Previous 2003, Sweden had a feed in system together with government investment h government proposed a bill to

e Swedish parliament with the aim of creating a long-term energy policy that would promote renewable electricity more cost-effective compared to the previous system. The

t crease the production of renewable by 10 TWh from the 2002

reased quota. The


Sweden has implemented the Guarantee of Origin (GoO) in accordance to the RES-E Directive (2001/77/EC) by using minimum requirements. The National Energy Agency

funds for renewable energy. In spring 2002, the Swedisth

overall arget was to inlevel by the year 2010. In order to achieve this target, the government initiated a market based support system for renewable electricity based on trading of certificates from May 2003. The intention with this system is increased competition between various renewable energy generation and therefore adding the most competitive technology to the market first. It was assumed that this system would reduce the costs in the long term. The eligible electricity production was limited to wind power, solar power, geo-thermal, biomass, wave energy and some hydro power. Regarding hydropower, existing small scale hydro power less then 1,5 MW together with new hydropower independent of size receive certificates. The bill was accepted with some modification by the parlia-ment and the system was initiated on 1 May 2003. In addition to trading of certificates the consumers are obliged to obtain certificates according to an incobligation was calculated by multiplying the electricity consumption by the yearly quota. In 2003, the quota was 7,4% but will increase to 16,9% in 2010. The electricity intensive industry has a quota obligation set to be zero.

The effect of the national certificate system has not fully been according to plan. In 2003 most funding of the certificate system went to the paper industry producing elec-tricity by back pressure with biomass. There was also a large share of suppliers who did not fulfil the quota obligation during the first year. In many cases the winners of this system are the plants using biomass. The certificate system will not be enough to sup-port other renewable production types. Very few new plants have been built due to this certificate system. There is a proposal to the parliament to extend the certificate system to 2030 which most likely will increase the willingness of investors to invest in renew-able energy, especially in wind power.

Sweden has a large share of voluntary consumption of renewable energy reaching al-most 10% of the total consumption in 2004. When the proposal for a certificate system was announced, there was much discussion if the certificates also could be used as a Guarantee of Origin. According to the energy law this is not clear. However, different to e.g. the RECS system, there is no redeeming or auditing of quality in the Swedish National certificate system. In fact, the intention of the government has never been to use the certificate system as Guarantee of Origin and recently it was clarified by the Energy Agency that the certificates are not related to quality. For this purpose, Sweden has implemented the Guarantee of Origin (GoO) in accordance to the RES-E Directive (2001/77/EC).

99


authorises GoO to producers wuse of the GoO in Sweden and due to restricti

ith eligible production facilities. Presently there is little ons in the national law, it is not possible to

trade the GoO. It is also unclear how redemption of quality is managed and there is no verification if double counting occurs.



Background

The Bra Miljöval label is owned by the Swedish Society for Nature Conservation (SSNC) which is the largest and oldest environmental NGO in Sweden. The organisa-tion started in 1909 and has approx. 170.000 members. The organisation is a member-

orway (1 supplier), Denmark (2 suppliers) and

ship organisation which elects every year the chairman and the board of the society. The label is referred to as "Good Green Buy" or "Good Environmental Choice" in English. SSNC started ecolabelling in 1988 on laundry detergent and paper. Currently the system covers 13 product areas. The operational labelling work is carried out by the Dep. of ecolabelling and consumer issues within the SSNC national office.

The Bra Miljöval label only labels electricity products according to specific criteria set by the Board of the Society in conformity to SSNC policy documents. Presently the label is operating in Sweden, Norway and Denmark. In July 2005 there were 35 labelled products adding from 35 suppliers in NSweden (32 suppliers). In 2005, the sales will approximately reach 6.500 GWh. All sup-pliers with a license to sell Bra Miljöval are listed on the SSNC website:

The present criteria are in operation since the beginning of 2003 and are valid until a revision in 2008. All criteria for Bra Miljöval including electricity are available at: http://www.snf.se/bmv/english.cfm

Contact: Dep. Ecolabelling and Consumer Issues, Box 7005, SE-402 31 Göteborg, Sweden. Tel +46 31 711 64 50. Fax +46 31 711 64 30. E-mail [email protected], Visiting address: Norra Allégatan 5 (close to Järntorget), Göteborg. For more information about the Bra Miljöval label, visit the website: http://www.snf.se/bmv/english-more.cfm

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Label criteria

Eligible products

Bra Miljöval only labels supply offerings with electricity from renewable sources. The d. The contract with the consumer must be

based on physical contracts, but the supplier may acquire electricity through either racts.

ligible sources

The following sources of electricity are eligible.

1. Only renewable sources are eligible which use less than 10% fossil energy during the entire life cycle of the production of electricity.

2. Hydro power is eligible if commissioned before the date of deregulation of the mar-ket, 1 Jan 1996 and has a minimum flow exceeding average minimum flow. Re-

are eligible if the net impact on biodi-he changes positive. Note that Hydro power is only eligible if 5% other

nt and restoring the

All production based on forest or agricultural fuels must recycle the ashes to the origi-

uding hydro power must set aside 0,016 €cent per kWh in an environmental fund. This fund is used for projects which aim to decrease the negative impact of the hydro power on the environment. The projects do not need to be carried out at plants included in the Bra Miljöval license.

supply must be entered into the Nordic gri

physical contracts or financial cont

E

commissioned plants or increase of efficiencyversity of teligible renewable sources are added to the product.

3. Wind power is eligible if the location is outside protected areas, areas for bird rest-ing and migrations, areas important for marine flora and fauna. The latter areas are specified in the criteria document. Eligible wind power must also have a plan for re-cycling of the plant and restoring the area after decommissioning.

4. Other renewable sources such as solar power, wave power, osmosis are eligible un-der special consideration and that a plan for recycling of the plaarea after decommissioning is available.

5. Biomass is eligible if it is produced in a CHP plant, does not co fire with fossil fuels or unsorted waste and uses the following fuels:

• Biomass which does not come from GMO.

• Waste which consist of more then 90% biomass and is free from toxic, bio accu-mulating and persistent substances.

• Forest fuels if the fuel has its origin in FSC-labelled forestry or forestry which does not come from specific areas defined by the SSNC.

nal land type.

Additionality of supply offerings

Additionality is created in the Bra Miljöval in two ways. First all products incl

101


Secondly the requirement that hydro power must be complemented by 5% other renew-ates a shortage of these sources leading to an increased price. Presently

etc. do not receive enough support through ate system.

ction. The SSNC and the Finnish Association rvation have an agreement of mutual recognition of the Bra Miljöval

ay ification. Other imports may only be

TheHouseabl irectly be included in Bra Mil-

Int

Pre

Or

Gr ted the use of the Bra Miljöval logo-typ il the criteria and a contract has been signed with the SSNC. The contract consists s of agreement and an ap-pliing re ement. The suppliers are also obliged to sub-miuct.

Miljöval.

party organisation verifies that the products comply The SSNC also assists the auditors to ensure sound

able sources crenew wind power, solar power, wave power the national certific


Presently electricity from Denmark and Norway can be eligible sources in the scope of Bra Miljöval in addition to Swedish Produfor Nature Conseand Norppa label. This means Norrpa-ecolabelled electricity produced in Finland mbe included in Bra Miljöval without further verincluded after consultation with national NGOs from the exporting country.


re is no formal decision to allow RECS certificates in the scope of Bra Miljöval. wever financial agreements are allowed suggesting the RECS certificates may be d if they have been issued within the calendar year. However the information avail-e on the RECS certificates will not be adequate to d

jöval and additional information is needed.

erface to Guarantee of Origin for RES-E

sently the GoO is implemented in Sweden but not used for trading.

ganisation of labelling process


een electricity suppliers: The suppliers are grane or refer to Bra Miljöval if the products fulf

of criteria, termcation form. By signing the contracts the suppliers are obliged to follow the market-

gulation defined in the terms of agret a yearly report to SSNC and carry through a yearly auditing procedure of the prod-

Auditors: The Swedish Association of Auditors has developed a special auditing pro-cedure for Bra

Labelling Body: SSNC as a thirdwith the criteria of Bra Miljöval. verification of all auditing reports. In order to further verify the compliance to the crite-ria and terms of agreement, SSNC has the right to do random checks. Moreover SSNC is responsible for all aspects concerning the communication of the label, its procedures and further development of the label.

102



Tracking mechanism

Electricity suppliers have three options to proof that they have purchased sufficient green electricity to comply with the criteria. The three eligible tracking methods are:

ion. The supplier uses its own production to proof the balance be-

ata for the plant to the SSNC for verification. In the contract with the sub supplier, the sub

or of the supplier to verify the production figures,

e sub supplier sells the environmental value to a supplier and sells the electricity to Nordpool. The supplier on the other hand

hes the environmental value in order to e requirements on the sub supplier is

• In house producttween the production and sales. The audit procedure will verify the balance based on yearly production and sales reports.

• Bilateral agreements. The supplier purchases a specified volume of eligible elec-tricity from a sub supplier. The contract include both electricity and the environ-mental value (GoO). The plants may have been pre-checked by the SSNC in order to simplify the contract. Otherwise the supplier will have to submit all d

supplier must allow the auditany multiple use of the environmental value.

• Financial agreements. Bra Miljöval may also include financial agreements, mean-ing that the supplier only buys the environmental value or GoO from the sub sup-plier and attach this from a pure electricity contract with, for example from other bilateral agreements. In most cases th

buys electricity form Nordpool and attaccreate a Bra Miljöval-labelled product. Ththe same as Bilateral agreements.


of the Bra Miljöval label comprises of four main procedures:

Random checks on plants in order to check the compliance with the criteria by

uation whether a labelled product complies with the minimum

The labelling process

• Initial verification of the product to check the compliance with the criteria. This is carried through by SSNC

• Annual audit at the end of the calendar year (carried out by an auditor)

• Final verification by SSNC based on the auditing report and the annual report from the supplier.

• SSNC

The audits aim at the evalstandard laid down in the criteria document (including the electricity balance, eligibil-ity, additionality). In this regard the audit comprises document reviews at the premises of green power suppliers but does also require on site plant inspections where neces-sary.

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Market Impact

The Good Environmental Choice-labelled electricity was successful from the beginning and in 1996 the amount of sold ecolabelled electricity reached 4 TWh. There are two main factors for this result. First, several of the largest producers had already discussed the possibility to differentiate electricity deliveries into several products; secondly there were intere actor was that the brand Good Environ-meandenvirocreasesold e2004,causenew criteria in 2002, which are obligatory for all producers from Jan 1st 2003. The pro

The pelectrindus

Euge

Presently Bra Miljöval is evaluated for accreditation towards Eugene Standard.

a few very large consumers, like the Swedish Rail road Administration who was sted in this type of product. Another f

ntal Choice was already established in Sweden through different household products therefore well known. Of course, the owner of the label is the largest and oldest

nmental organisation in Sweden. Since 1996 the sold amount of electricity in-d almost exponentially until the peak in 2001 at 15.4 TWh. In 2002 the amount of lectricity decreased to 12.6 TWh and further decrease in 2003 to 4.3 TWh. From the sales are increasing again. The drop in sales in 2002 and 2003 is partly be- of the introduction of a national certificate system but mostly the introduction of

gnosis for 2005 is 6.2 TWh.

resent price for the product is in average 0,15 €cent/kWh on top of the normal icity price for household costumers. For large consumers in the public sector or try the price is low, about 0.05 to 0.1 €cent/kWh.

ne compatibility

7.10.2.2 Environmental Declared electricity, EPD-labelled electricity

Background

An environmdata for a product with pre-set categories of parameters based on the ISO 14040 series

ulating the potential for market-driven continuous environmental improvement". The intent of an EPD is to provide the basis of a fair comparison of products by the products' environmental performance. They can reflect the continuous

ental product declaration, EPD, is defined as "quantified environmental

of standards, but not excluding additional environmental information". The overall goals of an EPD is, "through communication of verifiable and accurate information, that is not misleading, on environmental aspects of products and services, to encourage the demand for and supply of those products and services that cause less stress on the envi-ronment, thereby stim

104


environmental improvement of products over time and are able to communicate and add nmental information along a product's value chain.

ries

esently,

Eligibility


Vattenfall's EPD for hydro power and wind power is only eligible for Nordic produc-tion. Imports may not be part of present EPD.

f RECS certificates, Interface to Guarantee of Origin for RES-E

up relevant enviro

Groups of products can, however, differ in their inherent environmental performance - variations that need to be reflected in the calculation rules. Because of these differences, rules specific to the product group, so-called product-specific requirements (PSR), may have to be prepared complementary to general calculation rules to ensure comparability between declarations within the same product group.

Historically there has been two supplier in Sweden for EPD-labeled electricity, Vatten-fall and Sydkraft/E.on. The latter company has recently dropped this products because of lack of interest from the customers. This means that Vattenfall is the only supplier in Sweden for this product.

It is important to notice that an EPD itself is not a Guarantee of Origin. There is no au-diting or third party verification of the production/sales-balance of the product included in the EPD-system. Vattenfall, however during the last years added auditing of the bal-ance to their EPD labeled products.

Label criteria

The label criteria are restricted to the information about the environmental impact. There are no eligibility criteria for the production itself.

Labelled product catego

There is no restriction on the production which will be labelled by the EPD. Prhydro power, wind power and nuclear power is labelled with EPD.

No eligibility criteria is available.

Recognition o

Not relevant.


Certifying body

The Certifying Body in Sweden is the Swedish Environmental Management Council (SEMC), a company owned jointly by the Swedish Government, the Confederation of Swedish Enterprises and the Swedish Association of Local Authorities and Regions. The overall aim of the activities of the Council is to help and support private and public

105


organisations to implement and carry out a systematic and progressive environmental work towards a sustainable development. More information is available at: http://www.miljostyrning.se/eng/.

Verification of the information Conducting an independent verification of the information is an integral part of the EPD® system. The justification of an independent verification is found in ISO 14040: Life Cycle Assessments - General Principles and Framework stating that the results of

rigour of the review and verification procedure are still under

m will be modified to comply with the international consensus regarding verification/certification.

tem, the verification of the information has the form of a certification

MAS, which also hold an ac-creditation for EPD to enable cost-effective integrated certification services to their cli-

ification is usually three years.

Nordic countries. It adheres to system requirements according to MSR 1999:2 and PSR 2004:2, ver. 1.0.

iodiversity and risks related to electricity generation are described. The cer-prehensive underlying material as well as to this re-

port. The totality has been examined by BVQI i Sverige AB and found to conform to his certification is valid until 2008-03-01 inclusive.

Tracking mechanism

any LCA study shall be critically reviewed if the information can be used for compara-tive purposes.

The critical review as described in ISO 14040 enables different forms and stringency of the review. The level anddiscussion, specifically the need for third-party verification of EPD information in busi-ness-to-business communication. Future development of standards for EPD may accept different levels of criteria for verification depending on the use and public disclosure of the information. If so, the EPD syste

In the EPD sysconducted by an independent and accredited certification body. There are currently sev-eral certification bodies accredited for ISO 14001 and E

ents. The validity for EPD ver

Green electricity suppliers: Vattenfall AB Nordic Generation has completed this EPD for electricity generated in Vattenfall’s hydro power plants in the

Impact on btifying body has had access to com

system requirements. T


abel rantee of Origin.

There is no tracking mechanism included in the EPD-system. The goal of the EPD lis not be a Gua

Auditing

Auditing is presently not part of the EPD system. Suppliers have voluntary included an of the balance. audit mechanism

Market Impact

The total sales of EPD-labelled electricity in 2004 amounted 1,1 TWh mainly through Vattenfall AB.

106



EPD-labelled electricity is presently not compatible with the Eugene Standard due to a lack of eligibility criteria and additionality.

7.10.2.3 SERO-labelled electricity

Background

The Swedish Renewable Energies Association (SERO) is a Swedish non governmental central organisation for regional and special organisations engaged in renewable energy. The main purpose for SERO is in different ways to support and work for a rapid expan-sion of renewable energy sources in Sweden. Altogether 2.700 members are connected

tificate sys-tems.


s, Interface to Guarantee of Origin for RES-E

nt.

Certifying body ody is SERO. SERO guarantees the origin included in SERO-labelled

eden or the Swedish Wind Power Association.

to SERO. Contact SERO Chairman Mr. Olof Karlsson, telephone: +46 221 197 65, mo-bile phone: + 46 70 285 19 88, e-mail: [email protected]

Label criteria

No specific criteria is available for the product other than being 100% renewable.


Wind power and small-scale hydro below 1,5 MW owned by members of SERO.

Eligibility

The production has to be eligible in the national renewable obligation cer

Not allowed.

Recognition of RECS certificate

Not releva


The Certifying Belectricity. The producer has to be a member of SERO, The Association for Small Hy-dro power in Sw

107


Verification of the information

ant to sell SERO-labelled electricity have a license contract with SERO. The average additional cost for the consumer is 0,1-

to the producer and owner of the plant.


Tracking mechanism

Unclear.

Green electricity suppliers: Suppliers who w

0,2 €ct/kWh. Half pf this cost returns

The tracking is based on contract. There are no guidelines or restrictions within the la-bel how tracking should be carried out.

Auditing

tion and sales of SERO-labelled electric-


electricity is presently not compatible with Eugene Standard due to a

Auditing regarding the balance between producity is carried out by the regular auditors of the suppliers.

Market Impact

In 2005 no SERO-labelled electricity was sold.

SERO-labelled lack of eligibility criteria and additionality.

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7.11 UNITED KINGDOM

7.11.1 Introduction

in the UK originated from renewable en-ver, the Renewables Obligation (RO) and the RES-E Directive

RES). This explains why based on RO defini-ricity sales by licenced suppliers in 2004

to 2,21 percent in 2003, while on the basis of the RES-E Directive, which

ed to 3,37 percent the previous year. This larger increase in UK electricity consumption relative to supply is largely due

lectricity imports through electricity interconnections from France.

No green electricity quality label has existed in the UK since the introduction of the RO

tatutory instruments regulating the RO. Secondly, the UK has a very dense “policy space” (Sorrell 2003) in relation to renewable electricity with additional national policy instruments, such as the Climate Change Levy (CCL) as well as European Community obligations, transposed into UK law, such as GoO63, complicating the assessment of additionality of voluntary ‘green tariffs’.

The following sections analyse the interaction of the RO, the CCL and GoO with the UK’s green electricity market in greater depth.

I. The Renewables Obligation

The key strand supporting the UK’s renewables objectives is its quota obligation, the Renewables Obligation (RO). This policy instrument is organised in the Utilities Act (2000) and is separated into three distinct regulatory instruments, which correspond to the UK’s three distinct markets: (1) England & Wales, (2) Scotland, and (3) Northern

Samantha Ölz, Mark Draeck (IT Power)

In 2004, 3,58 percent of electricity generated ergy sources62. Howeadopt different definitions and formulae to calculate the percentages of electricity de-rived from renewable energy sources (tions, RES accounted for 3,08 percent of electcomparedrelates to electricity consumption rather than generation or supply, 4,39 percent of con-sumed electricity in 2004 was derived from RES compar

to hydro-based eNonetheless, under all three calculation bases, RES-E increased over the previous year.

in 2002.

The UK’s renewables policy is complicated by two significant factors. Firstly, reflect-ing devolution trends, the country has three distinct electricity markets (England & Wales, Scotland and Northern Ireland) and correspondingly has adopted three separate s

62 The definition of total renewables includes all renewable energy sources eligible in the UK, but ex-

cludes non-biodegradable wastes. 63 Guarantees of Origin for Renewable Electricity (GoO) are mandated under the RES-E Directive 2001.

109


Ireland64 . The interconnection between these three distinct markets has traditionally ent and the energy regulator are working to integrate

& Wales and Scotland) as interconnection , the British Electricity Trading and Transmis-

on Arrangements, effectively unifies the markets on the British mainland and came into effect on 1 April 2005. Interconnection with Northern Ireland is still very limited,

s orthern Irish markets are unlikely to be fully integrated in the

ation periods run from 1 April to 31

ssible renewable energy sources follows the

ared net capacity are eligible, as well as any plant commissioned after the start of the RO. Pyrolysis, gasification and anaerobic

le, but only the non-fossil derived energy counts. All

been limited, but the UK governmthe markets on the British mainland (England capacity and trade has increased. BETTAsi

and the e British and Nshort-medium term.

This support mechanism places an obligation on electricity suppliers to obtain a mini-mum percentage of the power they sell comes from renewable energy sources or pay a penalty. There was fungibility between the obligation systems across Great Britain (GB)65 from their launch in 1 April 2002 onwards and since 1 April 2005 there is full recognition and tradability under the obligation systems across all three UK markets.

The obligation in the UK is placed on licenced electricity suppliers, who have to sur-render Renewable Obligation Certificates (ROCs)66 or pay a penalty (“buy-out” price) to comply with the legislation. This tradable renewable energy certificate (TREC) sys-tem encourages a faster rate of increase than was seen during the 1990s under the previ-ous Non-Fossil Fuel Obligation (Mitchell, 1995).

The obligation level (in GB) started at 3 percent of electricity supplied in 2002/2003 and rises to 15,4 percent in 2015/2016. The obligMarch the following year. Initially, a 10,4 percent obligation level by 2010/11 was set to continue at that level until the end of the Renewables Obligation (RO) in 2027. How-ever, it was realised that in order to encourage investments, obligation levels needed to be fixed at higher levels for the period after 2010/2011. The obligation levels are ambi-tious, and the system is designed in such a way that the target needs to be higher than the supply of ROCs in order that there is a positive ROC value.

ROCs are issued to eligible plant by OFGEM, the i uing body, who also operates an electronic registry. The definition of eligRES-E Directive (2001/77/EC), apart from hydro, waste and co-firing of biomass67. Only existing hydro plant of 20MW or less decl

digestion of mixed waste is eligibenergy recovery from energy crops, agricultural waste & forestry materials are eligible,

64 Strictly speaking, the Obligation is known in England & Wales as the Renewables Obligation (RO),

and in Scotland as the Renewables Obligation Scotland (ROS). Since 1 April 2005 the Northern Ire-land Renewables Obligation (NIRO) has been in force.

65 England & Wales and Scotland. 66 SROCs and NIROCs in Scotland and Northern Ireland, respectively. The ROCs are a specific type of

tradable renewable energy certificate (TREC). 67

power above 20MW commissioned before 1 April 2002 are eligi-

The RO also adds that “only stations first commissioned or re-equipped on or after 1 January 1990 (except micro hydro and co-firing station) are eligible”. In practice, this means that virtually all re-newable energy plant except hydroble.

110


but may only be co-fired until 31 March 2016. Energy recovery from waste which is purely biomass is also eligible, but when co-fired needs to be mixed with at least 25 percent energy crops from 1 April 2009, 50 percent energy crops from 1 April 2010, 75 percent energy crops from 1 April 2011, and is no longer eligible after 31 March 2016. No supplier may surrender co-fired certificates for more than 25 percent of its obliga-tion level with this percentage decreasing over time. Suppliers can use up to 25 percent of ‘banked’ certificates awarded in the previous period.

The buy-out payment for suppliers who can not comply with the obligation level was

as

f the scheme and were implemented

set at GBP30/ MWh in 2002/2003, increasing with the retail price index68. The defining feature of the UK obligation system is the fact that the buy-out payments are ‘recycled back’ to those suppliers who have surrendered ROCs. This means that while the cost of the obligation to the end consumer is capped, the value of the certificates may exceed this cap. Indeed, in the first year, the average traded price of auctioned ROCs wGBP47–48/MWh. Third compliance period ROCs are currently traded at GBP46/ MWh69, while prices topped GBP52/ MWh earlier in the third compliance period.

While still only less than three years in operation, the Renewables Obligation Order 2002 has already seen a number of changes proposed and implemented. The first changes were proposed one year after the start othrough the Renewables Obligation (Amendment) Order 2004. This introduced a lower limit for small scale generators and changes to penalty payments. The second set of changes was proposed in the Renewable Obligation Order 2005 Statutory Consultation, and was implemented on 1 April 2005. The latest changes included the confirmation of the target increase by 2015, changes to the recycling fund, and extension of the mecha-nism to smaller scale generator, as well as the introduction of the Northern Ireland Re-newables Obligation.

Table 8: UK - Key design elements of UK quota obligation system.

Starting date 1 April 2002 (Obligation periods run from 1 April to 31 March the following year)

Obliged actors Licenced electricity suppliers Quantitative obliga-tion

Period (starting 1st of April) Old New

2002/3 3,0 % 2003/4 4,3 % 2004/5 4,9 % 2005/6 5,5 % 2006/7 6,7 % 2007/8 7,9 % 2008/9 9,1 %

The buy-out was set at GBP30,51 in 2003/2004, and is GBP31,59 for the 2004/2005 period. Auct

68 69 ion of Renewable Obligation Certificates by NFPAS – Results, NFPA, 27 April 2005

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2009/10 9,7 % 2010/11 10,4 % 2011/12 10,4 % 11,4 % 2012/13 10,4 % 12,4 % 2013/14 10,4 % 13,4 % 2014/15 10,4 % 14,4 % 2015/16 10,4 % 15,4 % 2026/27 10,4 % 15,4 % Issuing body OFGEM

Eligible resources 2016.

• Waste which is purely biomass is treated the same as energy crops, but if co-fired requires a minimum percentage of energy crops Old rules:

- Energy crops co-firing: The minimum percentage of energy crops is 75 percent from 1 April 2006.

- Co-firing: Any co-fired certificates are only eligible for up to 25 percent of the suppliers’ obligation, until 31 March 2011.

Mostly following the RES-E Directive definitions other than:. • Large hydro (>20MW) only plants commissioned after 1 April

2002. • Mixed waste is only eligible using advanced energy recovery

processes (pyrolysis, gasification and anaerobic digestion). • Energy crops, agricultural waste & forestry material are eligible.

However, if co-fired they are only eligible only until 31 March

April 2010, 75 percent from 1 April 2011.

New rules: - Energy crops co-firing: The minimum percentage of energy

crops is 25 percent from 1 April 2009, 50 percent from 1

- Co-firing: Any co-fired certificates are only eligible for up

cent until 31 March 2011, and 5 percent until to 25 percent of the suppliers’ obligation, until 31 March 2006, 10 per31 March 2016.

Banking Up to 25 percent of a supplier’scates awarded in the previous period

obligation m met from i-ay be certif

Borrowing wed Not alloMinimum Price None Penalty for non ompliance

plus RPI from 2002/3 c

GBP 30

2002/3 GBP 30,00 2003/4 GBP 30,51 2004/5 GBP 31,39 2005/6 GBP 32,33 Period of validity 2 years International trading RE produced outside the UK not eligible Existing plants in- Existing plant from all eligible renewable energy sources are in-

112


cluded he only exception is large hydro with a qualification that re commissioned or re-equipped after 1 January 1990.

cluded. Tplants we

Certificate price in ost recent years

uction price on 20 January 2005) m

GBP47 (a

Use of penalty reve-ues

back to certificates holders. n

Recycled

Cost recovery ethod

on electricity tariff. m

Surcharge

II. The Climate Chan

The Climate Change L y and commercial consumers of fuel derived energy products, including elec-tricity. CCL is a single a plies to end users. The rate app h).

Electricity is a taxable co K. Bodies liable for CCL m ister, notify Customs, and pay the levy that is due ac-c and

Household consumption is not covered by thcan be obtained under several conditions. Renewable electricity is CCL exempt.

The way to claim for CCL e r of Levy Exemption Certificate om the CCL can be issued with a LEC. OFGEM ed renewable electricity generator

Since the CCL is only applicable within the UK, any electricity eligible for LEC to be consumed outside the UK w -ing for LEC on renewable elec red-ited generator consumption declarations, as well as carry out audits on particular gener-ating stations on an annual b

However, electricity from rene ay receive a LEC if it is accompanied by proof of equivalent physical electricity flows, e.g. a sical capacit

W O and the slight differences in their definitions of renewable e sourc enewable electricity generation are eligible for both ROCs a o-exis n schemes for renewable electricity h ons for the additionality of green supply offerings, as different electricity suppliers use different certificates as proof of their respective tariff’s ‘greenness’.

There exists a large potential for double counting in the UK e to the co-existence of ROCs, RECS, RE-GOs and LECs. Most green tariffs are now based on GoO and LECs (Climate Change Levy Exempt Certificates), th also retire a s OCs

ge Levy

ev (CCL) is a tax imposed at the time of supply to industrial almost all fossil-

st ge downstream tax that is chargeable only on taxable suplied to electricity is 0,64 EURct/ kWh (GBP 0,0043/ kW

mmodity subject to CCL, if it is to be consumed in the Uust reg

ording to the type amounts of electricity supplied to non-domestic end users.

e CCL. For other end users, tax reductions

xemption is by means of presenting the appropriate numbes (LEC). RES-E which is exempt fr

is responsible for issuing LEC at the request of accredits. The issuing schedule for LEC is monthly.

ill not be granted a LEC. To avoid generation plants applytricity to be exported, OFGEM can require from acc

asis.

wable energy sources imported from other countries m

ctual phy y on the interconnector from France, into the UK.

hile the R CCL have lectricity, many es of rnd LECs. The cas implicati

tence of different accreditatio

system, du

ough somemall number of R .

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I rantees of Or

As in other EU Membthe RES-E Directive (Directive 2001/77/EC)it e i r electricity amounts equal or larger than 1 kWh per month. GoO provide evidence that electricity is produced from r ces, wi electronic registry. Eligible genera-tors are accredited by OFGEM, and GoO are issued on request. GoO may be transferred at the request of the original holder to another account.

ecifies the energy source, the electricity volume it cov-

f

the

ing to

transfer of

e time of writ-

II. Gua igin for Renewable Electricity (GoO)

the UK is mandated by er States, the implementation of GoO in70. GoO are available for all RES electric-

y generators and ar ssued by OFGEM71 upon request fo

enewable sour th the GoO being held in an

Information content: A GoO spers, the exact generation period covered by the GoO, whether it represents electricity which is in line with the definition for renewable electricity laid down in the RES-E Directive, the location of the respective RES device and the name and contact of the plant operator. In addition to this, GoO also provide evidence of the total quantity oelectricity produced during the period covered by the GoO. However, installed capacity and the commissioning date of the corresponding RES devices are not indicated by the GoO, except in the case of hydroelectric plant where plant net capacity is required. In the case of biomass, GoO will only be issued in respect of electricity produced frombiodegradable element of the biomass and/or waste. Thus, for biomass-generated elec-tricity, the Electricity Regulations stipulate additional required information relatthe fuel content, fuel sorting facilities and fuel suppliers. GoO are earmarked to show whether the electricity for which GoO are requested is accredited to receive ROCs and LECs.

Utilisation: The Electricity Regulations contain procedural guidelines on theGoO between market participants, with GoO transferred to another account at the re-quest of the original holder. However, the Electricity Regulations 2003 do not consider the redemption of GoO once they are used e.g. for the verification of a green product claim.


There are no quality labels for green electricity operating in the UK at thing. The Future Energy label, which was initiated in 1999 with financing from the UK government and run by the Energy Saving Trust, was abolished in 2001. The Future Energy label proved controversial, partly because of its inclusion of energy from waste incineration, which is supported as a renewable energy source by the RES-E Directive only with qualifications.

70 The UK’s transposition of Article 5 of the RES-E Directive is regulated by Statutory Instrument 2003

(SI) No. 2562: The Electricity (Guarantees of Origin of Electricity Produced from Renewable Energy Sources) Regulations 2003 which came into force on 27 October 2003:

omm/energy/res/legislation/doc/electricity/member_stateshttp://www.europa.eu.int/c 71 GoO in respect of electricity produced by a plant located in Northern Ireland are issued by the North-

ern Ireland Authority for Energy Regulation.

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With the introduction of the Renewable Obligation in 2002, few electricity suppliers

binding status nor impose new conditions on licenced suppliers. Instead, they are

ly offerings,

• guidance to suppliers on best practice in advertising green electricity products in

Ofgem justifies its current revision of the first Guidelines by referring to several signifi-cant developments in the meantime, namely:

wanted to provide consumers with a green electricity tariff option which met with the UK electricity regulator’s guidelines. However, there are still a number of tariffs which are being marketed by suppliers as being green. The absence of a comprehensive inde-pendent audit of the voluntary green power market since the end of the Future Energy scheme and the lack of information from suppliers does not permit the postulation of a well grounded estimate of the number of customers who have signed up to these tariffs. A ballpark figure put forward by green electricity suppliers is that there are between 60.000 and 100.000 domestic customers in the UK.

While there is no independent accreditation scheme in the UK, both the electricity regu-lator Ofgem as well as the NGO, Friends of the Earth (FoE), have published non-binding guidelines on green electricity products. However, FoE has recently withdrawn these guidelines. Ofgem undertook a consultation on its revised “guidelines on green supply offerings” (Ofgem 2005) which ended on 1st July, 2005.

7.11.2.1 Ofgem Guidelines (and Revision) on Green Supply Offerings

Background

Following the introduction of complete electricity supply liberalisation in 1998 the regulator Ofgem first introduced Guidelines on green supply offerings, which encom-pass both consumption and contribution based offerings72, in 2002. They do not have legally intended as guidance for stakeholders, i.e. suppliers, consumers and potential accredita-tion and verification organisations of green electricity products.

The main objectives of the 2002 Guidelines were:

• the clarification of suppliers’ obligations with respect to marketing of green sup-p

the UK market,

• strengthening consumer confidence in the credibility of green electricity products,

• the clarification of the interaction between the UK’s main support mechanism for renewable energy, the Renewables Obligation (RO).

However, the 2002 Guidelines neither contained a binding definition of what is “green energy” nor did it consider the non-domestic sector.

Consumption based products (also referred to a ‘supply offerings’) match the energy which has been supplied to customers with energy generated from green electricity sources. Contribution based prod-ucts (also referred to as fund offerings) allocate funds for investment in additional re

72

newable energy

o concepts. projects. These contributions may be linked to consumption levels or instead be a fixed regular pay-ment. Some products offer a mixture of the tw

115


• the decision of the Energy Saving Trust to abolish the Future Energy labelling scheme,

• the experience of three years’ of operation of the RO,

• the introduction of Renewable Energy Guarantee of Origin (GoO),

• the introduction of fuel mix disclosure requirements,

• the growth of voluntary green electricity demand in the non-domestic sector, i.e. to companies and public sector organisations,

• the greater diversity in the range of available green electricity products and con-cerns about the veracity of the benefits claimed by some products.

Furthermore, in its consultation document to the Guidelines revision, Ofgem refers to interest by some suppliers, consumers and environmental organisations in a re-introduction of an accreditation and verification system for green electricity, in order to more effectively structure the current green electricity market. However, no indication

elling scheme under consideration among stakeholders.

ages electricity suppliers verify their green claims by using third party

ch should characterise green supply

Trans

•

sem een electricity products by suppliers should be based on correct,

• hun

panied by

• Furthermore, suppliers should indicate the exact technology used to generate the

is given in the consultation document of the type or composition of the lab

Ofgem encourauditing, in order to increase consumer confidence in the veracity of consumer claims.

The consultation period ended on 1st July, 2005 and the final revised guidelines are yet to be released.

Recommended criteria

Ofgem sets out three fundamental principles whiofferings:

parency

This feature relates to consumer information and emphasises that information dis-inated about gr

and current and precise information.

T e proposed Revised Guidelines under consultation includes the same conditions as der the recently introduced fuel mix disclosure requirements, i.e.

- the same definition of renewable energy sources and technologies, derived from the RES-E Directive: wind, solar, geothermal, wave, tidal, hydropower, bio-mass, landfill gas, sewage treatment plant gas and biogases, accom

- the evidence to prove supply, i.e. through GoO (or contracts in the first year).

green electricity, especially in the case of energy technologies whose ‘greenness’ is controversial, such as large hydropower, waste to energy generation, as well as in the case of imports.

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•

tricity supplied as CCL exempt to commercial customers should not be sold as proven to be renewable ac-

cording to the fuel men electricity

increase the cost associated with providing green tariffs. The im

Additionality

Verif

An especially significant recommendation put forward for consultation is that elec-

“green supply” to the domestic market unless it can be ix disclosure licence condition, i.e. when it is supported by

GoO. The electricity supply industry derives the majority of its greproducts through LEC redemption and this change will

plications of this suggestion for additionality will be assessed in the section “Additionality”.

– this issue is assessed in the section “Additionality”.

ication

Verification of marketing claims

Based on ISO14021 green electricity information disclosure should occur either by voluntary publication to the public, upon request against a reasonable cost, time and place, or through an independent accreditation or auditing body.

73

Verification of supply

Suppliers need to provide evidence that the electricity sold to cover voluntary green demand does not exceed the total amount of renewable electricity indicated on their

consumption-based products, any specific claims regarding the genera-tion technology used should be accompanied by evidence which proves that the electric-

t with the claim of origin, technology, etc.

ers of a standardised sector-wide proof of supply. The consultation docu-available, i.e. holding GoO, ROCs, LECs or

upply contracts.

supGu

Ve

respective electricity disclosure labels.

With respect to

ity purchased is consisten

In its proposal for revised Guidelines, Ofgem emphasises the importance to suppliers and consumment discusses the range of alternatives evidence from s

Ofgem advocates the use of GoO as the most appropriate evidence of renewable energy ply for various reasons. These reasons are discussed in the section "Interface to arantees of Origin for RES-E”.

rification of additionality

For cditionalucts, it general accounts. In addition, independent audshoul d.

onsumption-based products one option is the deletion of ROCs as the proof of ad-ity, which is easily audited. For investment funds in contribution-based prod-will be important to audit ‘green electricity’ revenue streams separately from

iting of cash flow to and out of the fund d be ensured, with the criteria for payments being transparent and well publicise

ISO 14021 is the intand verification me

73 ernational standard providing “guidance on the terminology, symbols and testing thodologies that an organisation should use for self-declaration of the environ-

mental aspects of its products and services”.

117


Moreover, expenditure from contribution-based offerings should be evaluated and cus-ers should be informed of the performance against the funds criteria.

oduct categories

e Guidelines relate to both consumption as well as contribution based offerings.

igibility

tom

Pr

Th

El

e proposed revised Ofgem Guidelines regard the following renewable energy technologies as eligible for

green electricity products in the UK:

ore),

• biofuels (all biomass, including the biodegradable fraction of energy from waste in-ops and other biomass, co-firing of biomass, landfill gas, sewage

Based on definitions under the RO, both the original 2002 and th

marketing as

• wind energy (onshore and offsh

• water (small and large-scale hydro plant, tidal, tidal stream and wave power),

• solar energy (active and passive solar heating and photovoltaics),

cineration, energy crgas),

• geothermal energy.

Additionality

The Guidelines propose that suppliers should inform consumers specifically which of the following underlie as well as which do not underlie their claim of additionality:

• ensuring additional generation and sale of renewable electricity,

• ensuring investment in renewable electricity generation capacity that would not have occurred otherwise,

• clearly identified other environmental benefit not directly related to renewable en-ergy supply, such as carbon emission offsets or increasing biodiversity.

i) Additional generation

Ofgem refers to the principle in the DTI/DEFRA Green Claims Code that claims should

If a supply offering does not adhere to this principle, this should be made explicit to customers and reference made to other environmental benefits which justifies its mar-keting as a ‘green’ electricity product.

Itdo fficient proof of additionality. Instead, the pro-

not “imply that a product or service is exceptional if the claim is based on what is stan-dard practice anyway”. This means that in terms of their legal obligation under the RO, suppliers should not use their green electricity products to cover the costs of their man-datory targets, but rather to use the revenue to increase renewable electricity generation beyond their respective obligations.

is in this context that Ofgem argues for the supply of CCL-exempt electricity to the mestic sector not to be regarded as su

118


posed revised Guidelines suggest that CCL exempt electricity only be sold as “green supply” if it can be proven to be renewable for electricity disclosure purposes, i.e. when it is supported by GoO. This effectively means that the greenness goes with the GoO

be regarded solely as proof for having received financial support

Moreover, the proposed Guideline Revision presents the possibility of ROC retirement of proving additionality. This mechanism already exists as a possibility in

hind it is that ROC retirement reduces the

tor of additional generation in their cribed in next section.

ument

n and commission-

ii) onal capacity

and that the LEC can(and not inherently possessing any form of greenness).

as a methodthe Renewables Obligation. The rationale benumber of ROCs in the market, thus driving the ROC price higher and thereby encour-aging more investment in renewable generation capacity in the longer term. This has been Friends of the Earth’s recommended indicaGuide to Green Electricity Tariffs, as des

However, in its consultation document, Ofgem also puts forward the counter-argthat ROC retirement is unlikely to lead to an increase in renewable electricity genera-tion in the short term due to long lead times for project constructioing.

Additi

ption-based offerings Ofgem does not have specific recommen-dations for new capacity, but it does underline that the “benefit of these offerings is

proportion of the capacity used is new.”

ings beyond the growth

petus of the RO according to set verification principles, which were set out above.

iii) benefits unrelated to electricity generation

With respect to consum

maximised if a

For contribution-based products, on the other hand, investment in new generation ca-pacity is a crucial element in proving additionality. Suppliers providing these offershould demonstrate the method by which capacity is being expandedim

Other environmental

ref chieve other ntal benefits, such as carbon offsets or an increase in biodiver-

as an alternative option for additionality in

offsetting, on climate change cannot be

is whether suppliers should be allowed to

Some green electricity products in the UK currently market themselves as “green” by erence to the resulting investment in funds and/ or initiatives aiming to a

more general environmesity. Ofgem proposes to include this claimits revised Guidelines.

It is debatable whether this indicator would suffice as a minimum additionality stan-dard, as renewable energy generation brings other benefits besides carbon emission re-ductions, such as reducing SO2 and NOx emissions, which mere offsetting of carbon emissions (e.g. through tree planting) does not. Moreover, the impact of the two activi-ties, renewable energy generation and carbon easily compared due to the time lag of emission reductions passing through to an in-crease in global average temperatures.

A further discussion point raised by Ofgemretire EU ETS allowances (EUAs), which relate purely to CO2 emission reductions, to

119


demonstrate additionality relating to renewable electricity generation. This proposal would create linkages between the European carbon emission trading scheme and the UK green power market. These linkages provoke inherent difficulties in many respects. It would infer that all the benefits of renewable electricity generation were subsumed in the retired EUAs, while, in reality, carbon emission reductions do not contain the addi-

electricity generated is

f technology used.

Ofgem is seeking comments in its consultation on all the above issues related to the t and minimum standards for additionality.

ricity with regard to the related

vy (CCL) exemption. Imports of renewable electricity are eligible for LECs only if they are

cal electricity flow,

RES-E Directive. However, the British Electricity (Fuel Mix

tional benefits of renewable electricity generation. These include reductions of other emission types, such as SO2 and NOx, and socio-economic externalities, such as security of supply and the use of indigenous energy sources.

The retired EUAs may have been generated by a different emission reduction process than renewable electricity generation, e.g. through energy efficiency measures, which do not imply additional renewable energy generation or capacity.

The carbon emission reduction produced by a unit of renewable difficult to calculate. The conversion rate depends on the emission factor of the fossil fuel fired plant displaced by the renewable electricity generation and the emission fac-tor, in turn, is dependent on various exogenous factors, such as the time, location, and type o

definition, measuremen


The 2002 Guidelines discuss imports of renewable electcomplexities of verification and the risk of double counting. The original Guidelines relate this to the verification of supply through LECs, by maintaining that any consump-tion based green offering derived even in part from imports must satisfy the same re-quirements as international supply to the UK for the purposes of Climate Change Le

supported by verification of the exact origin and by proof of physii.e. by transport through the interconnector.

However, the requirements on imported renewable electricity are likely to change in the revised Guidelines, because the GoO system, Ofgem’s preferred proof of supply, recog-nises renewable electricity imports. There is no legal requirement for a linkage to physi-cal electricity under the 74

Disclosure) Regulations 2005 place a heavy burden of proof of “greenness” on suppliers by requiring those who wish to import GoO (or generator declarations) from outside Great Britain to “hold[s] evidence of the supply in Great Britain of the electricity re-ferred to in the Guarantee of Origin or generator declaration” and, to ensure that “(b) the Guarantee of Origin or generator declaration has not been used as evidence of fuel mix outside Great Britain”75.

74 Northern Ireland is not addressed in these Regulations. 75 Section B Condition 30A, paragraph 9 of the Electricity (Fuel Mix Disclosure) Regulations 2005.

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The use of GoO as evidence of supply may, in turn, complicates the use of ROC retire-ment as a mechanism for demonstrating additionality, as imported renewable electricity is not eligible to receive ROCs (this is considered further in the section “Additional-ity”). consumption based green offerings which include imported renewable electricity, as electricity imports are not eligible in the Renewables Obligation.


In the absence of a labelling scheme and accreditation body in the UK, neither proof of origin nor additionality conditions are legal requirements on suppliers with regards to the marketing of their green electricity products.

The Ofgem Guidelines do not address the recognition of RECS certificates.


In order to minimise the risk of multiple counting due to the existence of various forms of evidence of renewable origin (LECS, ROCs, GoO, electricity supply contracts) in the UK, Ofgem suggests that GoO should be used as the sole proof of supply for green elec-

• an unambiguous link between renewable generation and supply,

for commercially confidential information,

ledgement of the contribution to renewable

A discussion of institutional set-up and labelling procedures is not applicable, as the Guidelines do not relate to an independent accreditation scheme or labelling body.

tricity products. The advantages of GoO over the other methods of verification put for-ward by the regulator are:

• verification is possible without the need as the use of electricity supply contracts would necessitate,

• GoO are already mandated as evidence for the renewable share of electricity supply by the UK fuel mix disclosure supply licence condition,

• reliance on the GoO Register and on an agreed common date and time will prevent double counting,

• the use of ROCs as unique evidence of supply is complicated by the RO’s exclusion of some technologies; the lack of acknowgeneration made by suppliers who, instead of submitting ROCs towards (all of) their obligation, pay a ‘buy-out’ to Ofgem, which is recycled to fully compliant suppliers’; and specific rules of the RO, such as banking.

However, Ofgem’s proposal is subject to the current consultation and the regulator has requested feedback from stakeholders on the role which GoO should play in the verifi-cation of green electricity products and whether they “form any appropriate basis for any agreed standard of evidence”.


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Market Impact

An assessment of the market impact of the Ofgem Guidelines is not possible, as these indicative guidelines are not a rigorous labelling standard. It is thus difficult to quantify the effect of the indicative Guidelines on green power consumption and investment in

ctricity supplier to be about 100.000 e market),

while a 2002 report focusing on international comparison gave an approximate number ity customers (Bird et al. 2002) which is

e, Ofgem wants to

the ntly audited and verified.

(lis

standards for the definition of green electricity product features,

ption of green electricity prod-

ndependence and non-partisan funding for the credi-bility of an accreditation or verification organisation.

ne accreditation body may be established in the fu-

The proposed revised guidelines do elaborate on the Eugene Standard in the appendix related to the “regulation of advertisements and green claims”. More specifically, Of-

RE generation facilities.

At the time of writing, both green supply and fund offerings are available in the British electricity retail market. Three electricity suppliers offer a total of five supply offerings, while five suppliers offer six fund-based green electricity products. The total number of customers is currently estimated by one green eleout of a total 26 million domestic electricity customers (0,38 percent of th

of 45.000 of a total 25 million domestic electricequivalent to approximately 0,18 percent of the market. While anecdotal evidence sug-gests that the voluntary green power market has grown in the past years, especially due to an increase in business customers, customer figures have to be regarded as very rough estimates because of a lack of publicly available market information.


Although the Guidelines do not relate to a certified labelling schemencourage the introduction of a third party accreditation and verification scheme to fur-

r consumer confidence that suppliers’ claims are independeVarious options for a green electricity accreditation system are offered for consultation

ted in increasing order of third party involvement):

• a minimal compliance approach: the system would establish detailed definitions and set minimume.g. additionality thresholds,

• development of protocols and procedures for the measurement and auditing of ad-ditionality,

• auditing of claims either on an ad hoc basis or systematically,

• as marketing bodies merely promoting the consumucts,

• as labelling schemes, providing recognition and accreditation for products.

Ofgem stresses the importance of i

While recognising that more than oture, Ofgem accentuates the increased market confidence that the existence of a single accreditation body engenders.

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gem describes the Eugene Standard as an “international benchmark for green energy ates it as a “symbol of ‘good’ energy”.

reen Electricity Tariffs

ption-based and contribution-based products as “recom-ccording to the following criteria.

er’s behalf.

2. –m emand were to grow significantly.

3. ing of green electricity, to domestic and commercial customers. Because in the UK

renewable origin,

green power. The retirement of LECs reduces this risk.

Co

e electricity generated by customers, and the existence of

tariffs” and advoc

However, the regulator does not propose that UK electricity suppliers adopt a labelling standard compatible with the Eugene Standard.

7.11.2.2 FoE Guide to G

Background

In 2004, Friends of the Earth launched their online Guide to Green Electricity Tariffs, which represents an information aid for consumers with ranking and recommendations rather than a third party labelling scheme with binding criteria and independent verifica-tion. This has now been withdrawn by FoE due to lack of capacity to continually update their league table. The Guide is accompanied by a background document detailing the NGO’s views of additionality and the listing criteria. These guidelines are brief and non-binding and therefore do not address all issues that a third party accreditation scheme usually includes.

The Guide ranks green consummended” or as “other” a

Criteria for recommendation

Tariff features

1. Retirement of a percentage of ROCs on the custom

100 percent of the consumers’ demand must be supplied from renewable electricity this requirement would support an expansion in green electricity supply above the andatory target, if consumer d

Retirement of 100 percent of LECs – this is pertinent due to the risk of double sell-

a unit of green electricity obtains two certificates of proof ofnamely ROCs and LECs, the same unit may be sold once to a company and a fur-ther time as to a household, even though only one has purchased the benefit of

mpany performance

1. Annual investment in renewables – as a percentage of annual turnover.

2. Proportion of renewables owned – as a percentage of total generation.

Other features listed for green electricity products are customer numbers, whereby the supplier offers to buy renewablan RE investment fund.

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Product categories

The Guide relates to both consumption as well as contribution based offerings.

Eligibility

renewable in the green electricity

ergy sources as defined in the RES-E Directive: generation from wind

ication of green supply offerings. While FoE accept that other

available in the UK use the complete retirement of their LECs, rather than retiring the equivalent number of ROCs, to market their products as

Imp

In toriggreen electricity products. No UK electricity supplier currently uses RECS certificates to pwhi s.

n electricity

ble, as the Guide is not based on an independent accreditation scheme.

The Guide mentions which sources are defined asproducts offered in the UK:

Renewable enenergy, solar energy, small-scale hydro plant, landfill gas, sewage gas and geothermal energy.

Additionality

FoE advocates ROC retirement or removal as the preferred proof of additionality, an issue which OFGEM raises for discussion in the current consultation of its guideline revision. FoE argues that ROC retirement is an indicator which is easily audited, which in turn facilitates the verifdefinitions of additionality are used, such as in the case of contribution-based products/ fund offerings, the investment in new renewable capacity, the NGO does not believethese indicators to be easily measurable or comparable.

Most green electricity products

“green”.


orts of renewable electricity are not discussed in the FoE Guide.


he absence of a labelling scheme and accreditation body in the UK, neither proof of in nor additionality conditions are legally imposed on suppliers with regards to their

rove the additionality of their green electricity product and therefore the FoE Guide ch is merely a ranking does not refer to RECS certificate


The FoE Guide does not address the interaction between GoO and greequality labels.


A discussion of the Guide’s institutional set-up and labelling procedures is not applica-

124


Market Impact

An investigation of the market impact is not appropriate for the FoE Guide, as it repre-sents an information tool to choose between existing green electricity products rather

binding standards and, in addition, it has recently been withdrawn. than a set of


This issue is not applicable to the FoE Guide, as it is not a certified labelling scheme.

125


Other Countries

2002 renewable energy sources contributed to approx. 8,5% to the total electricity eneration in Australia. With approx. 7,7% hydropower was the main renewable con-

tributor. The renewable electricity market is mainly dominated by the mandatory market initiated by public support. Especially the obligation scheme (Federal Mandatory Re-newable Energy Target) has set ambitious targets for the installation of new renewable power plants.

Most electricity suppliers throughout Australia offer at least one green power product accredited to the Green Power Accreditation Program. In the deregulated markets of New South Wales, Victoria, Southern Australia and the ACT (Australian Capital Terri-tory), all domestic and commercial customers can choose to buy a green electricity product offered by any supplier licensed in that State. Larger customers in Western Australia and Queensland can also choose a supplier outside their franchise area.

Federal Mandatory Renewable Energy Target (MRET)

The Federal Mandatory Renewable Energy Target (MRET), an obligation scheme for electricity generation from new renewable energy sources was introduced on 1 April 2001. The MRET requires a stepwise increase of additional RES-E generation of 9,5 TWh by 2010. RES installations are considered "new" when they started operation after 1 January 1997. To ensure investment security for project developers and plant opera-tors all obliged suppliers will be required to maintain the 9,5 TWh of new renewables between 2010 and 2020.

The MRET is facilitated through a system of tradable certificates. The certificate system is based on a internet based central registry. To comply with the obligation each obliged supplier has to purchase and surrender a certain amount of so called Renewable Energy Certificates (1 REC represents 1 MWh of eligible RES-E generation) to the Office of Renewable Energy Regulator. The number of certificates a supplier is required to sur-render is corresponding to the annual volume of its electricity sales. Where suppliers do not comply with the obligation a fixed penalty will be applied.


Currently in Australia there is only one green power in operation, the Green Power Ac-creditation Program.

7.12 AUSTRALIA

Veit Bürger (Öko-Institut)

7.12.1 Introduction

Ing

126


7.12.2.1 The Green Power Accreditation Program

Background

In 1997, the Sustainable Energy Development Authority (SEDA) in New South Wales set up the Green Power Accreditation Program to accredit green electricity products. The program was developed in consultation with several stakeholders such as the elec-tricity industry and various NGOs (including the Australian Consumers Association, Greenpeace, the Australian Conservation Foundation and the WWF). The program has recently been extended to accredit green products all over Australia nationwide.

The Accreditation Program certifies products not companies. Those products that meet the labelling criteria earn the right to use the Green Power Product logo. Where suppli-ers offer green electricity products in which only a certain component consists of eligi-ble green power (e.g. in form of a block tariff where customers only want to purchase a fixed volume of accredited green electricity) the Accreditation Program allows limited accreditation of a product component.

The labelling criteria outlined below reflect the standard as it stands in September 2004. At the beginning of 2005 the Accreditation Program labelled 18 products corresponding to a labelled volume of approx. 125 GWh. An overview of all labelled products can be found at www.greenpower.com.au.

Originally SEDA had been appointed as Project Manager. In July 2004 SEDA’s func-tions were incorporated into the NSW Department of Energy, Utilities & Sustainability, which now administers the program on behalf of the formal supervising body National Green Power Accreditation Steering Group (NSPASG). NSPASG comprises representa-tives from state government agencies from NSW, Victoria, Queensland, Western Aus-tralia, South Australia and the ACT.

Contact: Green Power Project Manager: Department of Energy, Utilities & Sustainabil-ity, GPO Box 3889, NSW 2001, Australia. Tel.: +61 – 2 - 8281 7777. Fax: +61 – 2 - 8281 7355. E-mail: [email protected].

Label criteria

The lab l criteria of the Green Power Accre editation Program are laid down in the Ac-creditation Document which is available at the website of the program (www.greenpower.com.au).


Within the Green Power Accreditation Program labelling is limited to supply models.

127


Eligibility

The following energy sources and technologies are generally eligible to the Accredita-tion Program:

• solar photovoltaic and solar thermal electric systems,

• wind turbines and wind farms,

• hydro-electric power stations,

elled power stations (incl. direct gasification/ pyrolysis, waste materials

pecific

n forests.

involve major diversion of rivers and do not ade-

opment stimulated by the Austra-lian MRET scheme. In this regard accredited products shall ensure that customer con-

een power will result in additional investments in "new" renewable en-

e following requirements:

ce a minimum level of 80% of the total labelled electricity ble RES-E sources. An installation is considered "new"

• biomass-fufrom sugar cane, winery and cotton industries, amongst others, as well as methane captured from sewerage treatment works or large scale organic composting)

• geothermal power stations,

• wave and tidal power stations.

All listed energy sources and technologies are subject to detailed technology scriteria which are specified in the accreditation document. Some energy sources or tech-nologies are subject to specific requirements and have to undergo an assessment on a case-by-case basis (e.g. electricity generation from landfill gas or energy crops).

The Accreditation Program explicitly excludes the following technologies:

• Biomass: Utilisation of any materials (including wastes) derived from forests other than sustainably harvested plantatio

• Waste incineration of industrial, commercial or municipal solid wastes.

• Hydropower plants which require new dam construction that results in large-scale flooding of ecosystems or whichquately allow for environmental flows.

Where installations are fuelled by different types of fuel sources (multi fired installa-tions) the eligible renewable fuel input must exceed 50 % averaged over the settlement period. Here of course only the electricity volume which has been generated from the eligible fuel input (eligible proportion) will be accepted as eligible generation under the labelling scheme.

Additionality

The Green Power Accreditation Program is aiming at the installation of new renewable energy generators across Australia beyond the devel

tributions for grergy generation and an increase in associated greenhouse gas reduction above targets set by MRET.

Additionality is ensured by th

1. Green suppliers must sourvolume from "new" eligi

128


when it was commissioned after 1 January 1997 or after the launch of the green

liers are not allowed to source a labelled product with RES-E which has e this requirement the respec-

MRET) for each MWh sold as part of the labelled ”. Certificates which have been redeemed within the

e ports are not an issue in the Australian Green Power

ect Manager

ply reditation document are eligible to the

1. tion of the plant site, technical data, state-

lder consultation.

he submitted information and documents as well as the outcome of the plies

power product which seeks accreditation under the Accreditation Program.

2. Green suppbeen used to meet the MRET obligation. To facilitattive suppliers are obliged to redeem within each labelling period RECs (which have been issued in the scope of theproduct and classified as “newlabelling process must not been used anymore to prove compliance with the obliga-tion. Suppliers are not obliged to redeem RECs for RES-E classified as "old" in the scope of the labelled product.


Du to the geographical location imAccreditation Program.



RES generators: RES generators need to seek written approval by the Projin order to become eligible to the labelling scheme. Only those installations which com-

with the eligibility criteria set forth in the accprogram.

The application process is based on the following steps:

A RES generator formally applies for Green Power approval by submitting all re-quired information (including a descripment of environmental effects76) to the Project Manager.

2. NPGASP has the possibility to order a formal public consultation process which will be coordinated by the Project Manager prior to the approval assessment. Where no formal consultation process is required the Project Manager will conduct an in-formal stakeho

3. Based on tconsultation process the Project Manager assesses whether the application comwith the eligibility criteria of the labelling scheme.

Green electricity suppliers: Green electricity suppliers have to apply (based on a stan-dardised application form) for their green products to become accredited by the label-ling scheme. If the application meets all criteria the supplier will conclude a contract

76 his requires documentation which provide evidence that local stakeholders have been consulted and

upport the project. Where an Environmental Impact Statement or Environmental Impact Assessment as been undertaken for the project as required by relevant planning legislation, the Project Manager

Tshgenerally will accept a copy as appropriate documentation.

129


witrigh

credindThecougra

ProEnergy, Utilities & Sustainability is taking the role of the Project Manager respectively

Accreditation Program. The Project Manager contracts an exter-mpile a desktop review of the individual


h the Project Manager. With signing the contract the electricity supplier acquires the t to use the Green Power logo within its product marketing campaign.

Auditors: Independent auditors have to carry out technical audits for each product ac-ited in the scheme. Each electricity supplier is responsible for appointing its own

ependent auditor to conduct the annual technical audit for the labelled green product. technical audit reports are part of the annual audit reports. All Tier 1 or Tier 2 ac-nting companies77 can become qualified auditing bodies in the Accreditation Pro-m.

ject Manager (Labelling Body): As mentioned above the NSW Department of

Labelling Body of thenal auditor (currently URS Australia) to cotechnical audit results.

Tracking mechanism

Tracking is based on a virtual term called Green Power Right. A Green Power Right is

cing the virtual term Green Power Right which is used to transfer the green

ments. In this regard the track-

witstan

ers endment period in which the electricity generation which they are associated to has oc-

Aud

defined as the right to claim the green attributes of any electricity volume (or a portion of it) generated from an eligible installation which has been approved against the ac-creditation criteria.

By introduattributes between generators, traders and finally suppliers it is no longer necessary to link these transfers to physical electricity trading arrangeing mechanism is more or less following the concept of a certificate system, however

hout any standardised commodity (as the Green Power Rights do not represent a dardised generation volume).

Participants of the program are advised to track the titles based on a paper trail. Suppli-are allowed to conduct transfers of Green Power Rights within eight weeks of the of the calendar year. However Green Power Rights are only valid within the settle-

curred. Some exceptions from this rule are applied in form of flexibility mechanisms.

iting and verification procedures

Generator reports: Approved generators are obliged to annually submit to the Project Manager a generator report including information about the meter readings (in order to determine the eligible generation volume), a list of companies to which the electricity was sold and the MRET status of the respective power plant.78

78

77 Tier 1: international or multinational accounting firm; Tier 2: city-based accounting company. The MRET status specifies whether the power plant has been accredited and registered under the MRET scheme, whether it has been classified as "new" and whether it receives or abstains from re-ceiving RECs.

130


Quarterly status reports: Accredited suppliers need to submit four quarterly status reports per year to the Project Manager. Quarterly status reports mainly provide infor-

an

ormation:

reports comprising all information provided by the quarterly re-g a product development plan; these technical reports have to be

corresponding number of RECs as issued under MRET).

g advertising statements have to be changed.

to the national quota obligation MRET, a minimum of 100 GWh of the labelled electricity

l RES-E production. This corresponds to approx.

e compatible to the Eugene Gold Standard but would need to adjust its eligibility criteria for hydropower plants to become accredited.

mation about the electricity balance and portfolio of the labelled product in the report-ing period (e.g. total sales volume and number of customers broken down between resi-dential and commercial customers, total generation/purchase volume broken down be-tween all power plants involved). Quarterly status reports need to be submitted within 1 month of the end of each quarter. Enclosed to the two quarterly reports which are sub-mitted in July and J uary electricity suppliers need to submit all marketing materials which refer to the fact that the respective product has been approved by the Accredita-tion Program.

Annual audit report: Suppliers are obliged to submit an annual audit report to the Pro-ject Manager within three months of the end of each calendar year (deadline 31 March). The annual audit reports are based on a format provided by the Project Manager and include the following inf

• Technical auditing ports and includinindependently audited by an auditor.

• Details as to whether the product complies with the additionality criteria of the Ac-creditation Program (minimum proportion of generation classified as "new" as well as redemption of

Verification: The Project Manager is verifying all quarterly status reports and annual audit reports. Where information turn out to be inadequate the Project Manager has the right and duty to directly consult the respective electricity supplier or the plant operators which contribute to the green product in question. Furthermore the program manager verifies whether marketing materials comply with the criteria laid down in the accredi-tation document or where misleadin

Market Impact

At the beginning of 2005 the Accreditation Program labelled 18 products corresponding to a labelled volume of approx. 125 GWh. As at least 80% of each product must consist of electricity which has been generated in new power plants which do not contribute

volume can be regarded as additiona3% to the MRET target for 2005 (3.400 GWh).


In principle the Green Power Accreditation Program would b

131


7.13 NORWAY


7.13.1 Introduction

Norway deregulated its electricity market in 1991 and a tariff system was implemented in order to provide a possibility to the customers to choose their supplier freely. Statnett was established as a transmission system operator from 1992. Already in 1993, Statnett

utilities competing to supply electricity to Norwe-

at wfor generation is almost exclusively coming from

tinucap lso led to

iendly natural gas solutions. Enova has been operating from January 2002 and is owned by the

orway, represented by the Ministry of Petroleum and Energy, which

by 3 TWh/year by the year 2010.

Enova's work is financed through the national Energy Fund which was established in inistration of the Energy Fund is regulated by an agreement be-

n. According to the agreement, Enova shall trigger off savings- and new renewable production projects which by 2010 sum up to 10 TWh/year.

The Energy Fund is financed by a levy on the transmission tariff for electricity and from ordinary grants over the State budget. In sum this has been approximately 60 M€ annu-

established the power exchange Statnett Marked which was initially an exchange cover-ing only the Norwegian market. Later on, this market became a joint market between Norway and Sweden and the market was renamed to Nordpool.

Today, there are approximately 200gian customers in an open market, where customers can switch between energy provider

ill and at no switching cost. There are no requirements as to specific electric meters small consumers. Norwegian power

hydropower, with only 1% other sources contributing, mainly stemming from thermal power production. The low cost of the electricity production has however led to an con-

ously increase in consumption. Today Norway has the greatest consumption per ita in the world reaching in total 115 TWh. This high consumption has a

increased import. There is therefore an interest to build more hydro power plants but there is considerable public opposition.

National support system for renewable energy

The Norwegian Parliament, Storting, has established a new public enterprise, Enova, responsible for promoting energy savings, new renewable and environmentally fr

Government of Nalso defines Enova's tasks and goals.

The goal of Enova is to work towards the energy policy objectives and national targets that were approved by the Norwegian parliament in 2000. The main objective is to limit energy use considerably, to increase the annual use of central heating based on new renewable energy sources, heat pumps and waste heat by 4 TWh/year by the year 2010 and to increase wind power production capacity

January 2002. The admtween the Norwegian State and Enova. The purpose of the agreement is to ensure that Enova manages the Energy Fund in line with the objectives and intentions embodied in the Storting's decisio

132


ally over the last years. For the year 2004 the Norwegian Government has proposed to s support to 70 M€.

t the same Renewable obligation as in Sweden. The certificate systems could be merged and ROCS

ould be freely traded between the two countries. The intention was to implement the ry 1th 2007, however a decision on the integration of the two

eantime.

ed internationally. Pro-

to consumers. In most cases, the production has

orwe-

increa e the financial

In addition to Enova, there are discussions to implemencertificate systemcmerged system at Januamarkets has been postponed in the m


Norway has implemented a system for the Guarantee of Origin (GoO) according to arti-cle 5 of the RES-E Directive. The Norwegian GoO system is based on the RECS-standard, and the Issuing Body Statnett issue combined RECS-/GoO-certificates. The RECS-/GoO-certificates are used both nationally and when tradducers are free to choose if they want an electronic RECS/GoO to be issued.



Background

Bra Miljöval was introduced by the Swedish Society for Nature Conservation in Nor-way in 1998 in cooperation with the Norges Naturvernforbund / Friends of the Earth Norway (FoEN). In average there have been 5-6 Norwegian suppliers with a licence to sell Bra Miljöval-labelled electricity been sold to Swedish suppliers and finally to Swedish consumers. The sales of Bra Mil-jöval-labelled electricity to Norwegian consumers has been very modest, most likely because the Norwegian production consist of 99% renewable sources. The recent change from export to net import during the last years may change the situation. With the present criteria, there is one supplier of Bra Miljöval-labelled electricity to Ngian customers.

The ‘Bra Miljöval’ label is described in greater detail in the Sweden section (7.10).

133


7.14 SWITZERLAND

Louis von Moos (VUE)

7.14.1 Introduction

In 2004 the division of renewable energy production in Switzerland was as follows:

The total share of renewable energy is approx. 56% of the total electricity production in l , the renewable electricity market is mainly

dominated by hydropower due to the geographical conditions of Switzerland. Approx. l duced in peak plants, 24% in run-of-river plants. As

the electricity market of Switzerland is only opened for big consumers up to date, com-ferent distributors is somehow limited. Nevertheless different

distributors have electricity products on the market where customers can choose the respective production quality. Still this voluntary market has to be regarded as a niche

rket. Under the top class label naturemade star electricity products of approx. 300

andatory RES-E market in Switzerland (as for example in Germany). In nly the so called independent producers with smaller RES-E plants get

egel"). Independent producer means basically not being an professional

ible ES device to

a) connect the respective RES installation and

b) buy electricity from the installation in accordance with the fixed feed-in tariff (15 Rp/kWh which is approx. 9.5 €-cents/kWh) which is set forth in the law and corresponding provisions. There is no degression of the tariff over the years

• hydropower approx. 35'000 GWh

• biomass approx. 35 GWh

• solar power approx. 16 GWh

• wind energy approx. 6 GWh (BFE 2004/ and BFE 2004/2).

Switzer and. As shown in the figures above

32% of e ectricity production is pro

petition between the dif

maGWh are certified.

There’s no mSwitzerland osome limited subsidies ("15-Rp.-Regel", see below).

Legal framework

The Swiss electricity system is regulated within different laws. Regarding RES-E the most important regulations are:

• Energy Law (Energiegesetz EnG)

• Energy Regulation (Energieverordnung EnV)

Within the EnV the above mentioned subsidy system for independent producers is regu-lated ("15-Rp.-Rpower producer such as the typical energy producing companies (utilities). The "15-Rp.-Regel" obliges the grid operator whose grid is closest to the location of an eligR

134


Eligible sources are clearly defined including hydro power plants (up to 1 MW), bio-w er. Obviously this "limited" feed-in tariff doesn't pay for

the costs (paid to the independent producers) on nnual basis from the national Transmission System Operator (TSO) which gets the

l consumers by putting an surcharge on all electricity deliveries. ehow provisional because discussions regarding the

are highly debated at present (enlarged feed-in system, quota systems etc.).


The EU Directive 2001/77/EC which introduces the concept of Guarantees of Origin (G ber of the EU. How-

patibility in the field of import and export of electricity

plementation ricity disclosure was published by the government.

(who receives the GoO, what are the costs for them, etc.)

Up to date there is no regulation in place GoO (or RE their products labelled with one of

electricity product labels

Sin r quality labels for “green power”. Currently two labels respectively two labelling associations are dom

• ths

mass, ind power, solar powall the extra costs of the different renewable energy production technologies.

The respective grid operator can claimaadditional costs from alThe system has to be seen as somshaping of the future system for the promotion of renewable energy in Switzerland

oO) does not apply for Switzerland as Switzerland is not a memever the Swiss parliament has passed legislation (Swiss Energy Regulation EnV), which enables the government to introduce a GoO scheme. Currently, no such scheme is in place but a task force has been set up, in which government officials, utility representa-tives, the future Swiss TSO and experts from other organizations like the association "Energy Certificate System ECS Switzerland" (ECS CH) work towards a blueprint of a GoO system.

The system for the Guarantee of Origin (GoO) will be implemented "in line" with arti-cle 5 of the RES-E Directive (see EnV Art. 1d).

Basically the system is set up for 2 main reasons:

• International com

• Use of GoO within the national and international disclosure system(s). Swiss dis-closure is mandatory since beginning of this year and is regulated in the Swiss Energy Law (EnG) and the Swiss Energy Regulation (EnV). An imguide on elect

The Issuing Body (IB) for the Swiss GoO is not mandated up to date, as are not defined the detailed rules on the system

that obliges suppliers to redeemCS-certificates). But practically all suppliers have

the available labels (naturemade-Labels, TÜV-Labels, see below) where auditing is performed. As long as the products are labelled the consumer gets proof that the elec-tricity supplied is from renewable sources and double selling is prevented.

7.14.2 Green

ce 1999 there exist several private initiatives foinating the market:

e naturemade labels with the two niveaus naturemade star and naturemade ba-ic, labelling body: VUE Verein für umweltgerechte Elektrizität

135


• several label catalogues run by the TÜVs (Technische Überwachungsvereine).

The naturemade labelling concept is backed by environmental NGO’s (WWF CH, Pro Natura etc.). The TÜV Labels are described further in the German Country Report as they are identically for these two countries.

7.14.2.1 The naturmade labels (naturmade star and naturmade basic)

Background

The naturemade labels are operated by the registered association VUE Verein für um-weltgerechte Elektrizität, an association consisting of different stakeholder groups such as environmental organizations, renewable energy associations, association for water economy, electricity producers, distributors and suppliers as well as bulk power users. The membership structure was chosen intentionally as to combine different views and interests on the green power market in order to establish a self standing dependable la-belling solution. The operational labelling work is done by the main office of the asso-

lowing:

•

•

ciation.

VUE certifies green electricity production facilities and green electricity products not companies. By mid 2005 VUE had labelled the fol

• Production facilities labelled naturemade star: Approx. 580 GWh

• Production Facilities labelled naturemade basic: Approx. 7,4 TWh

Electricity Products labelled naturemade star: Approx. 300 GWh

Electricity Products labelled naturemade basic: Approx. 6 GWh

An overview of all labelled production facilities and labelled products is provided by the website www.naturemade.ch . Since 2004 the naturemade star label is accredited against the Eugene Gold Standard.

The labelling criteria outlined below reflect the standard as it stands mid 2005. VUE regularly revises the criteria in light of any changes of the legal framework for the green electricity market and the experiences gained during the ongoing labelling process.

Contact: VUE naturemade, Oetenbachgasse 1, CH-8001 Zurich, Switzerland, phone +41-44-213 10 21, fax +41-44-213 10 25, email: [email protected] .

Label criteria

The label criteria of the naturemade labels are laid down in a criteria document which is available in a short version as well as a comprehensive long version at the website of

naturemade. VUE

136


La

rved for green power whose superior eco-logical status is founded on the fulfilment of several highly exacting criteria.

atically crease the amount of certified naturemade star generated by the sun, wind, biomass

and water in Switzerland ("naturemade supply model", see below).

Labelling criteria naturemade basic production plant

belling of two qualities

The naturemade seal of approval recognizes two distinct qualities of electric power:

• naturemade basic stands for electricity from renewable sources.

• naturemade star is a designation rese

Consumers who choose to use naturemade (star and/or basic) electricity automin

criteria have to be fulfilled:

waste, power from wood, power from agricultural biogas, power from sewage

Th

fol-

The respective company must satisfy all technological and legal requirements to operate

The following

ZK = Zertifizierungskriterien (certification criteria)

E=Erzeuger (producer)

ZK-E1. Energy sources (Eligibility):

- Exclusively renewable energy can be certified.

- Certifiable energy systems are: water power, solar power, wind power, power from organic gas

ZK-E2. Declaration of origin:

e following aspects have to be stated:

1. origin of energy sources used

2. percentage out of each energy sources used in final product

3. location of power plants

ZK-E3. Aim of corporate strategy

Sustainable production and efficient use of electricity has to be declared part of the cor-porate strategy.

ZK-E4. Environmental management system

Plants with an output exceeding 10 MW have to introduce a management system (lowing the ISO 14'001 standard or similar).

ZK-E5. Legal compliance

a power plant.

ZK-E6. Energy management

The company must carry out suitable metering and monitoring operations on the respec-tive power plant.

137


ZK-E7. Information

Suitable information towards customers must be given.

Labelling criteria naturemade star production plant

ollowing criteria have to be fulfilled: The f

th

tor 99 assessment method

cally manipulated organisms (biomass) permitted

st be guaranteed (in case of biomass)

t by plant extensions or new buildings

• solar power: no plants on "untouched" sites (only plants on existing buildings)

ve been definied within a national of landscape protection

• , wood and agricultural BIOGAS criteria on fer-

• of EAWAG's Greenhydro® criteria

power:

made Eco-Fund", see below)

lants (<100 kW)

ication criteria.

GK: Globale Kriterien (criteria on local scale)

LK: Lokale Kriterien (criteria on local scale)

S. Sonderanforderungen (special conditions per energy system)

Criteria ZK-E1 to ZK-E8 have to be fulfilled together wi

GK. Global: ecological criteria:

• ecobalance must comply with the Ecoindica

• no use of geneti

• fertility and yield of ground mu

• no detraction of surrounding environmen

LK. Local: criteria on local scale per energy system:

Every energy system must fulfil specific criteria:

• wind power: only plants on sites that hastudy, taking into account aspects

for power from organic wastetility, origin of biomass etc.

water power: fulfillment

S. Special requirements for water

• establishement of fund for ecological improvements in and around the plant ("nature

• no fund required for small hydroelectric p

• no fund required for drinking water and waste water power plants

Naturemade Eco-Fund

The fund is used to finance regular ecological improvements for hydroelectric power stations (hydrological catchment area). The funds may not be used to finance measures that help to meet certif

138


Financing:

Contributions to the fund are made by producers of naturemade star-certified hydroe-o the fund:

Switzerland

lectric power. The following amounts are channelled int

• 0,1 Rappen per kWh generated

• 0,9 Rappen per kWh sold to end-users in

Implementation:

The measures are negotiated by the power plant operator, the local authorities and envi- power plant operator.

output of less 100 kW, as well as drinking water and waste

Label

L=Lie

ZK-L1.

• has to be declared

• ne remade star certifi-

• na er products are permitted to contain power that

-L rovement: the sustainable and efficient of the central objectives of any pro-

ZK-L3. Legal ust satisfy all technological and legal

ZK-L etering and monitoring operations to ensure energy management appropriate to the

ct: customers wishing to cancel an electricity supply agreement must be able to do so at no risk to themselves

ZK-L7. Guaranteed supply: the supplier's concession must run for longer than any of the power supply agreements made with customers

ronmental protection bodies. The fund is administered by the

Hydroelectric power plants with an water power plants, do not have to contribute to this fund.

ling criteria electricity products

ferant (distributor)

Declaration of origin:

• clear identification of energy sources

percentage of energy sources used in final product

Mixed power products:

naturemade star: mixed products are permitted to contain power only from re-wable sources or hydroelectric power plants that hold natu

cation

turemade basic: mixed powholds naturemade basic or star certification

ZK 2. A commitment to continual impprovision of electricity must be one vider

compliance: company mrequirements to operate a power plant

4. Energy management: company must carry out suitable m

company's standing

ZK-L5. Availability: within a calendar year the company must achieve a balance between the energy provided and the amount of certified electricity sold

ZK-L6. Cancellation of contra

139


ZK-L8. Product information: the supplier is obliged to provide information about his products above and beyond the certification document

ZK must be adhered to

Additionality

odel

ZK-L9. Complete certification documentation

ZK-L10. Fulfilment of the naturemade supply model (see below)

-L11. VUE communication and CI guidelines

Naturemade supply m

Implementation:

The supplier must satisfy the supply model criteria at the time when he makes a sale ofnaturemade-certified electricity. The supply model encourages the use of the sun, wind, biomass and water power certified by naturemade star.

the actual amount of certified electricity

of na ity: At least 5% of the power must be supplied fro n. Of this, at least half must be generated by new wind, solar or biomgo

ctricity: At least 2,5% of the power must be generated bynatur

In principle, all suppliers of naturemade star power generated by the sun, wind or bio-ma

For imports frbeen accredited against the Eugene standard) the so called three filter model, introduced

• The minim Eugene counterpart organization

• The minimmust also

distributo plant has fallen out of the national support m

the

In case of imp peration

product needs

In all figures given below, 100% representssold to end-users.

Supplier turemade basic electricm plants with naturemade star certificatio

ass plants ((new plants mean plants with at least 5 year on-ing lifetime at point of time of certification).

Supplier of naturemade star ele new wind, solar or biomass plants (definition of new plants see above) which hold

emade star certification.

ss fulfil the supply model.


om countries with a Eugene counterpart label (which is a label which has

by Eugene, applies. In such a case the following conditions must be fulfilled:

um eligibility criteria laid down by thein the exporting country must be complied with.

um eligibility criteria applied by the naturemade star label (see above) be complied with.

• The criteria for additionality defined by the naturemade star label must be met. The r has to prove, that the ecological benefit hasn't been counted twice. If a

odel because of age are not eligible under naturemade star label.

orts from countries in which no Eugene accredited label is in othe respective supplier who wants that imported RES-E contributes to a labelled green

to consult VUE which decides the eligibility of these imports on a case

140


to case basis. Here VUE draws special attention to the imports of electricity generated er at least until Eugene has agreed on a common methodologyfrom hydropow for as-

sessing the eco-standard of this technology.


RECS certificates, developed by the RECS initiative are eligible in the scope of VUE labelled green electricity products. They can be used as proof of origin within the audit-

r the use of RECS certificates the same rules and criteria apply (eligibil-r to avoid double counting of the environmental benefit

issued may not have already been mar-

the respective RES de-esented by the certificate is required. This allows the auditor to assess

ly be accepted as proof of origin when they have been issued within

t existing yet (see above), the interface

in Switzerland a taskforce has been put in place by the

ling process

ing process. Foity, additionality). In orde("greenness") RES-E for which certificates wereketed or fed into the grid as electricity with green attributes.

As the criteria of the naturemade labels currently cannot be verified solely based on the information content of a RECS certificate, the identification ofvice which is reprall relevant plant specific information required within the auditing process.

Certificates are onthe calendar year of the respective product label.


As in Switzerland Guarantees of Origin are noLabel-GoO has not been defined up to date. Regarding the actual securing of "no-double counting" within the label, see section on auditing.

For the implementation of GoObeginning of 2005 with the aim to establish a GoO-system witch is able to fulfil at least the requirements set by the respective EU-Directive.

Organisation of label

specialist; not applicable to drinking water and waste

4.

5.

Procedure

1. Completion of a questionnaire in advance of the audit

2. Preliminary study and management concept for naturemade star hydroelectric power, except for drinking water and waste water plants

3. Audit by a VUE-accredited auditor (naturemade star hydroelectric plants require an additional inspection by awater power plants)

Certification by the VUE

Annual inspection and audit

6. Recertification every five years

141



Green electricity suppliers: The certification procedure is regulated within a labelling contract between a green electricity producer or supplier and VUE. The signing of this

fication has been positively done!

ck the com-

blication of the label criteria and the verification whether marketing material used by electricity suppliers complies with the

ocument.

contract can only be made after certi

Auditors: For the naturemade star labels the role of the independent auditor is assigned to the following competent institutions: ProCert (CH), SQS (CH), SwissTS (CH), Arse-nal (A), TÜV Süd (D). Auditors are required to undergo a formal accreditation process. They have to be experienced in environmental auditing and must be independent from electricity suppliers and generators and all other players involved in the labelling proc-ess.

Labelling Body: As labelling body VUE is responsible for assisting the auditors to cor-rectly apply the label criteria and to ensure sound verification of all auditing reports. In the context of verification VUE has also the right to perform random checks at the premises of green electricity suppliers. Moreover VUE has the right to chemunication of the label and its procedures. This comprises the provision of a helpdesk for consumers, suppliers and generators, the pu

communication rules laid down in the criteria d


Tracking mechanism

Energy balance Electricity suppliers have to proof that they have purchased sufficient green electricity with an energy balance. For the energy in the energy balance the two main tracking methods are:

option electricity contracts provide evidence that green electricity (or at least the corresponding green attributes) have been trans-

the respective supplier.

(for the conditions f

Annual control audit

prodinconsistencies VUE addresses the responsible auditor or, when necessary, directly the

p and/or supplier. In order to ensure sound verification checks at the premises of the producer

/ and necessary) directly at the site of renewable power

• Contract based tracking: In this

ferred to

• Acquisition of green power attributes through the RECS systemor the recognition of RECS certificates see above).

Annual audits have to be carried out for all labelled production facilities and labelled ucts. In its role as labelling body VUE is verifying all audit reports. In the case of

res ective electricity producerVUE has the right to carry out physical randomand or supplier and (if applicable generators involved.

142


Market Impact

By mid 2005 under the top class label naturemade star electricity products of approx. 300 GWh are certified. Due to the status of liberalisation in the electricity market, only few products are offered nationwide.The market share of naturemade star labelled elec-tricity of the whole domestic market is of approx. 0,5% (300 GWh in comparison to 55 TWh).

Regarding power production, compared to the overall annual production of 36 TWh, the share of labelled production facilities is approx. 20,5% (7,4 TWh naturemade basic) and 1,25% (0,45 TWh naturemade star).


Since 2004 the naturemade star label is accredited against the Eugene Gold Standard.

143


7.15 USA


7.15.1 Introduction

In the US, the first green power products were offered by utilities in regulated electric-ity markets in the early 1990s. Today, more than 500 utilities in 34 states offer optional green power programs. The number of programs has grown steadily during the past few years, with between 15 and 25 new programs appearing annually. The extra price range

uch as 17,6$¢/kWh, with a median of 2.0$¢/kWh and a mean of that feature solar-only products represent the high end of the

e 000, while the median premium declined by 20% in 2003 after remaining constant for

e 400,000 electricity customers are purchasing a green power product through their regulated utility company, from green power marketers in a competitive market setting, or in the form of RECs. While the most successful utility programs have achieved customer participation rates of 4% to 11%, average participation is only about 1% for utility programs. Competitive markets have yielded similar averages where mar-kets are conducive to competition and, thus, customer switching is occurring. Renew-able energy certificates offer another product alternative and have been particularly popular with non-residential customers.

Table 9: USA - Estimated Green Power Customers and Sales by Market Segment (2003).

Customers Sales (billions of kWh)*

from 0,6$¢/kWh to as m2,62$¢/kWh. Programs range. The average price premium has dropped at an annual average rate of 9% sinc2several years.

Nationally, som

Utility Green Pricing 265.000 1,3 Competitive Markets 150.000 1,9 REC Markets 5.000 0,7 Retail Total 420.000 3,9 *Includes sales of new and existing renewable energy

144



7.15.2.1 Green-e

Background

The Green-e Renewable Electricity Certification Program was introduced in 1997 after consultation with power marketers, consumers and environmental stakeholders. The Program is administered by the non-profit Center for Resource Solutions and based in San Francisco, California. Green-e certifies renewable electricity products that meet the environmental and consumer protection standards established by the Program. The Pro-

mittees who ensure that the consumer protec-When roduct

is verified annually for its power content and that the electricity provider selling the ower has met the Green-e Program ental and consumer protection stan-ards.

cheme was originally designed to be used in California, but is being e in other States. Basic re specified, but regio takeholder

the ability to recommend r ts to the criteria. Therefore, for exam-rnia but not in Pennsylvania or New

ngland. Also, because there is a limited supply of renewable energy in Pennsylvania and New England at present, power companies have the option to substitute "negawatt hours" of energy efficiency for some of the renewables portion of the 50% renewable requirement in the early years of the programme.

gram also requires that electricity providers disclose information about their product to their customers in a standardised format. This enables consumers to make informed purchasing decisions and helps to build consumer confidence in retail renewable elec-tricity products. Through these efforts, the Green-e Program hopes to expand the retail market for renewable electricity products and for power from cleaner non-renewable generation.

In each state where Green-e is active, the Green-e Program works with diverse stake-holders to form Regional Advisory Comtion and environmental standards of the Green-e Program work for their regions. consumers see the Green-e logo, they can be sure that the renewable electricity p

pd

's environm

Label criteria

The Green-e sadapted for us c a

efinemenriteria nal s

groups have ple, Municipal Solid Waste is included in CalifoE

145


Product Requirements79

When the Green-e logo is displayed next to an electricity product, the product must f equirements:

• 50% or more of the electricity supply comes from one or more of these eligible renewable resources: solar electric, wind, geothermal, biomass, and small or cer-tified low-impact hydro facilities80,

• if a portion of the electricity is non-renewable, the air emissions are equal to or lower than those produced by conventional electricity,

re no specific purchases of nuclear power, and 81

services for Tradable Renewable energy Certificates (RECs). RECs certified by Green-e will directly support generation from newly developed renewable energy

certificates are created when a renewable energy facility generates elec-

meet the ollowing r

• there a

• the product meets the Green-e new renewable requirement .

Electricity Provider Requirements

Electricity providers selling Green-e certified electricity are required to abide by the Green-e Code of Conduct, which governs participation in the Green-e Program. Specifi-cally, electricity providers must:

• make full disclosure of the percentage and type of renewable resources in their electricity product;

• present product pricing and contract terms in a standardised format, for easy comparison;

• submit their marketing materials for review twice a year so Green-e can ensure they are not making false or misleading claims; and

• undergo an annual independent Process Audit to verify product content claims and ensure enough renewable power has been purchased to meet customer de-mand.

The Green-e Renewable Energy Certification Program offers also certification and veri-fication

facilities. Thesetricity. Because the certificates represent all the features of renewable electricity except the electricity itself, they can be marketed as a separate product and sold, traded, or re-tired anywhere in the US. The part of renewable energy that is not electricity includes a

79 The definition of new renewable resources varies by region. See the Green-e standard for a more

detailed discussion at http://www.green-e.org/ipp/standard_for_marketers.html 80 Green-e defines small hydro as dams 30 megawatts or

been certified by the Low Impact Hydropower Instituteless in size. Hydropower facilities that have

(LIHI www.lowimpacthydro.org), regardless of size also qualify for Green-e, beginning in 2001 in California and 2002 in all other states. The LIHI criteria for certifying dams takes into account the environmental impacts of the hydropower plants.

81 The Green-e Program's new renewable requirement defines new renewables as renewables that are generated from solar electric, wind, biomass and geothermal facilities which have come online since 1997, and in New England since 1998.

146


growing list of valuable attributes, including many positive environmental benefits.

RECs marketers participating in Green-e will vol aand env

Elig i

Importe


Green-e is governed by an independent board called The Green-e Governance Board olutions serves as the program administrator. The

ey remain consistent with changing circum-stan smendat r Marketers Advisory Committee, the Utility Green Pricing Adv opractical and consistent with broader public policies. A subcommittee of the Board will also serve to review and mtions fo

Green-e also admcom ipetitive(UGPAC), which is comprised of representatives from each utility that is offering

goals.

Green-e verification consists of the semi-annual Compliance Review and the annual

m

Thr

sico ses company contracts, invoices, and billing state-

RECs bundle these attributes into a single, marketable commodity. RECs can be sold independently or combined with "generic" electricity to provide customers with all the benefits of renewable electricity service.

unt rily undergo an independent audit to verify that they meet Green-e's consumer ironmental protection criteria.

ib lity of imports

d electricity is not eligible.

(Board). The Center for Resource SBoard ensures that the Program's standards and policies are appropriate and necessary to meet its stated goals and objectives, and that certification and verification are handled in a credible and effective manner. The Board regularly reviews the Program's standards and will amend them as necessary so that th

ce and evolve with market conditions. The Board will receive and act on recom-ions from the Powe

is ry Committee, and Regional Advisory Committees to ensure the Program is

ake recommendations for Board approval of Green-e applica-r utility green pricing programs.

inisters a Power Marketers Advisory Committee (PMAC), which is pr sed of representatives from each marketer that is selling a Green-e certified com-

electricity or RECs product, and a Utility Green Pricing Advisory Committee

Green-e certified green pricing products. In addition, in each region where Green-e is active, Green-e has established and administers Regional Advisory Committees, which consist of representatives from environmental groups, regulatory groups and the indus-try. The Green-e Governance Board receives and may act on recommendations from the PMAC, UGPAC or regional groups, to ensure the program is practical and consistent with local public policies. Green-e also relies on an Ad-hoc Governmental Advisory Committee to ensure that the Green-e Program remains consistent with national policy

Process Audit. The purpose of these verification processes is to instil consumer confi-nce in the renewable power market and to document that the electride city providers are eeting strict Green-e certification standards.

e Process Audit requires retail and wholesale power providers to complete an annual thi d party verification of their power purchases and sales. The Process Audit is de-

gned by the Center for Resource Solutions and conducted by a certified public ac-unting firm. The Process Audit u

147


ments to verify that the electricity provider has purchased enough power in quantity and type to meet its customer demand for each product.

The Compliance Review, conducted by Green-e staff, ensures that the electric service provider is abiding by the Green-e Code of Conduct, which governs the use of the Green-e logo and outlines the Green-e Program's customer disclosure requirements. This includes proper disclosure and truthful information on direct mail, customer bills,

mmercials and other marketing materials. During the Compliance that the electricity provider is not making false or misleading

hat they have made the pricing, power, and contract disclosure to customers as required by certification.

radio and television coReview, staff confirmstatements about their product and t

Market Impact

The following table presents annual totals of customers purchasing Green-e certified products

Table 10: USA - Cumulative Number of Customers Purchasing Green-e Certified Power

1998 1999 2000 2001 2002 2003 Residential 56.600 144.700 154.000 93.600 118.000 61.100Non-residential 5.800 27.700 8.600 13.400 8.000 480Total 62.400 172.400 162.600 107.000 126.000 61.600

Sources: Center for Resource Solutions (1999; 2000; 2001; 2002; 2003) *2003 data represent preliminary (unaudited) figures.

Of the 61.000 customers tallied in 2003, about 60% were located in Texas and Califor-nia; with the remainder in: Maryland, Massachusetts, New Jersey, New York, Pennsyl-vania, and Washington, D.C. Although the number of customers purchasing Green-e certified products nearly tripled from 1998 to 2000, the California power crisis caused the number to decline by 40% in 2001 as many green power marketers were forced to exit the market and return their customers to default service. The number of California customers purchasing Green-e certified products fell from about 155.000 in 1999 to 88.000 in 2001.

According to un-audited figures released by Green-e, about 625 million kWh of renew-able energy were sold to consumers through Green-e certified products in 2003. About 30% of the sales were to non-residential customers. Although sales of green power in the Northeast increased by about 75% during 2003, the loss of a large number of cus-tomers in California (as described earlier) is responsible for the overall decline in sales of more than 50% from 2002.

148


Table 11: USA - Annual Sales of Green-e Certified Green Energy in Competitive Markets (millions of kWh)

1998 1999 2000 2001 2002 2003* Residential 303 761 1.125 741 1.135 439 Non-residential 81 466 459 209 301 186 All Customers 384 1.227 1.584 950 1.436 625 New Renew-ables

n/a n/a n/a 251 926 n/a

Sources: Center for Resource Solutions (1999; 2000; 2001; 2002; 2003) t preliminary (unaudited) figures.

ompatibility

Not relevant.

*2003 data represen

Eugene c

149


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