Guarantees of Origin (GOs) are a reliable tool for customers to ensure the power they buy truly comes from renewable sources

Guarantees of Origin (GOs) are a reliable tool for customers to ensure the power they buy really comes from renewable sources. Widely used for electricity, GOs are becoming available for gas, heating, and cooling too.

Demand for renewable energy is surging. Customers want to ensure the energy they buy comes from renewable sources. The need has been recognised at the EU level, and Finnish national legislation based on the Renewable Energy Directive is due to enter into force in 2021.

Under the Guarantees of Origin (GO) system, GOs can be obtained for electricity, gas, heating, and cooling produced from renewable energy sources. Senior Consultant Markus Klimscheffskij from Gaia Consulting has studied GOs as regards the various energy forms.

GOs provide customers with a participation mechanism in the renewable energy market and form part of an efficient whole. They’ve been used for electricity for 20 years, and now other energy forms will be put on equal footing.

- Markus Klimscheffskij, Senior Consultant, Gaia Consulting

Klimscheffskij says GOs will be equally applicable to gas and heating as to electricity, but there are also some differences. Heating and biogas are produced at facilities of very different sizes and from different energy sources, which needs to be reflected in the definition of GOs.

“It’s important to identify the origin of biogas and district heating, as their verification requirements differ from those of electricity. We should also remember that this is a Europeanwide system,” says Klimscheffskij.

Relationship to excise duty the key issue

For biogas, one of issues emerging is to do with off-grid production. Finnish national preparatory documents recommend the inclusion of off-grid gas production in the GO system. The crucial point is to avoid double counting of gas.

“This is important for the reliability of the system and the free movement of gas. The Finnish gas market has been opened up, and trading can take place across borders on physical gas energy as well as on GOs,” he explains.

With regards to the market, one of the key issues is how biogas GOs relate to the excise duty, an indirect tax.

“In line with official directives, the starting point here is that the GO shows the origin of the gas to the end user but has no impact on the taxation of the gas used,” says Klimscheffskij.

Big customer promises

According to Klimscheffskij, Finland is leading the way in GO legislation, with the system due to be launched in summer 2021. Gasum Portfolio Manager Mervi Leskinen has monitored the preparations closely and agrees with Klimscheffskij.

“Progress in the preparations has been made through open discussion in a good spirit of consensus,” says Leskinen.

The EU directive allows some scope for interpretation in national decision-making. Leskinen underlines the importance of legislation for customers.

“The law provides added credibility and opportunities for customers to make responsible choices. We then verify the origin with a certificate. It’s our promise to our customers that we’ve taken care of it all so that they get green energy,” she explains.

Ville Pesonen, Gasum’s Head of Energy Market Services, gives priority to customer needs. Responsible choices are on the rise in the business world, and the debate on practical targets and actions is lively. Many ambitious carbon neutrality pledges have been made.

There’s been a big change in corporate behavior. Companies now want to be involved in utilising emission-free energy, but this alone isn’t enough.

- Ville Pesonen, Head of Energy Market Services, Gasum

He talks about additionality – renewable energy that truly replaces fossil production.

“Businesses are keen on entering projects that generate something new. At Gasum we’re working on such projects relating to wind power, for example,” says Pesonen. 

GALLUP:

How is sustainability visible in your company’s electricity consumption and sourcing?

Matti Kalervo, Vice President, Corporate Sustainability, Kesko Corporation

• The K Group aims to become carbon neutral by 2025 and to reach zero emissions from our own operations by 2030.

• We are cutting emissions by using renewable energy, increasing store energy efficiency and designing efficient logistics. All electricity purchased by Kesko for K-stores and the Kesko Group’s other properties in Finland has been 100% renewable since the beginning of 2017.

• We are also increasing our share of renewable electricity by sourcing wind power for the next 15 years from a new wind farm constructed in Finland.

• We have developed a new energy recycling model for K-food stores, which will reduce heat consumption by as much as 95% and make our stores almost carbon neutral in terms of energy. Motiva awarded our system with the Energy Genius of the Year 2019 recognition.

Elina Saarivuori, Sustainability Manager, Gasum

• At Gasum we use renewable electricity generated from Nordic hydropower in all of our operations.

• Investing in renewable power is a natural choice for us, as promoting cleaner energy solutions is at the core of Gasum’s operations. It is easy to source renewable electricity by obtaining Guarantees of Origin for electricity, and Gasum Energy Market Services is an expert in this market.

• In our Corporate Responsibility Program, we have made a commitment to curbing climate change, and increasing the efficiency of energy use plays a very important role in this.

• We are also committed to the Energy Efficiency Agreement for Industries and, consequently, to reducing our energy consumption by 7.5% by 2025. We are right on track to reach the target.

 

1.12.2020