Does the EU Renewable Energy Sector Still Need a Guarantees of Origin Market?

CEPS Policy Insights No. 2017-27

9 Pages Posted: 19 Oct 2017

See all articles by Jaap Jansen

Jaap Jansen

Centre for European Policy Studies (CEPS)

Date Written: July 7, 2017

Abstract

The European Commission’s Renewable Energy Directive of 2001 mandated EU member states to develop a system for the guarantees of origin (GOs) of renewable electricity. In 2016, this market had an estimated value of €120 million per year across the EU, of which €100 million was income for generators of renewable electricity. Yet the GO system has been criticised for lacking environmental credibility and having little impact. The current legislation of the GO instrument leads to an oversupplied GO market and a double-counting problem. This enables suppliers who want to launch renewable electricity products, and corporations seeking to make their electricity demand more renewable, to do so in a legally correct and cheap but environmentally questionable way, which leads to little or no extra generation of renewable electricity.

The author argues that well-designed reforms could address these weaknesses and provide additional, consumer-driven income streams to help realise new renewable energy projects in the future. He proposes a number of recommendations for action.

Keywords: EU Renewable Energy, Renewable Energy Sector, Renewable Electricity, GO Market, Guarantees of Origin

Suggested Citation

Jansen, Jaap, Does the EU Renewable Energy Sector Still Need a Guarantees of Origin Market? (July 7, 2017). CEPS Policy Insights No. 2017-27, Available at SSRN: https://ssrn.com/abstract=3055638

Jaap Jansen (Contact Author)

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres, 1000
Brussels, 1000
Belgium

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