electricity tracking in europe from 1990's to 2010's - basic syllabus
TRANSCRIPT
Electricity Tracking in Europe from
1990’s to 2010’s
Basic Syllabus
Slide 2 23.1.2015
1990’s No tracking
• Energy origin of electricity consumed by consumers is the production
mix of the country or that of their individual producer-supplier
Source: E-track
Slide 3 23.1.2015
Late 1990s – Need for tracking emerges
• Growing interest towards buying green electricity
• To satisfy the need suppliers start contractually allocating certain
production to certain consumers
Contractual linkages to track the value of energy origin of electricity
Source: E-track
Slide 4 23.1.2015
Late 1990s – Electricity Market Gets
Increasingly Complicated
• Separation of electricity production and supply companies
Expanding number of market players
Electricity is not only produced in central large-scale plants
• End-user market liberalization
Consumers are free to choose their electricity supplier
o Supply is detached from distribution what you buy is not
(physically) what you get
Consumers are more environmentally aware
Rising need for differentiation for suppliers (e.g. greenness)
• Growth of electricity exchanges and market places
Electricity is traded multiple times before it’s produced and consumed
Financial instruments become everyday life in the electricity market
• Markets are to a greater extent international
EU seeks to harmonize the European electricity market
Slide 5 23.1.2015
Turn of 2000’s – Contractual
linkages in modern electricity markets
Source: E-track
Slide 6 23.1.2015
Turn of 2000’s – Contractual
linkages in modern electricity markets
Source: E-track
Separation of production and supply
Slide 7 23.1.2015
Exchanges, Traders, Brokers...
Turn of 2000’s – Contractual
linkages in modern electricity markets
Source: E-track
Slide 8 23.1.2015
We need to...
• Make power exchanges establish different products for electricity from different sources
• Monitor what type of electricity is traded in each bilateral trade
• Control imported electricity so that we always know how it was produced
This will cost as much as electricity itself and we will still end up with double counting...
...Whilst hampering liquidity and internationalization of the electricity market.
Beginning of 2000’s – EU Member States must
make sure that electricity tracking is reliable
Slide 9 23.1.2015
2000’s Birth of Guarantees of Origin – De-linked
electricity tracking
GO Markets
GO Registry
CancellationIssuing Transfer
Electricity Markets
Grid
Slide 10 23.1.2015
2000’s Birth of Guarantees of Origin – De-linked
electricity tracking
GO Markets
GO Registry
CancellationIssuing Transfer
Electricity Markets
Grid
Electricity is delivered through the grid
Slide 11 23.1.2015
2000’s Birth of Guarantees of Origin – De-linked
electricity tracking
GO Markets
GO Registry
CancellationIssuing Transfer
Electricity Markets
Product: Electricity
Grid
Electricity is purchased from the electricity markets through a supplier
Slide 12 23.1.2015
2000’s Birth of Guarantees of Origin – De-linked
electricity tracking
GO Markets
GO Registry
CancellationIssuing Transfer
Electricity Markets
Product: Energy Origin (wind, domestic, small-scale, PV, Eco-labeled etc...)
Product: Electricity
Grid
Electricity origin is tracked with Guarantees of Origin
Slide 13 23.1.2015
2000’s Birth of Guarantees of Origin – De-linked
electricity tracking
GO Markets
GO Registry
CancellationIssuing Transfer
Electricity Markets
Product: Energy Origin (wind, domestic, small-scale, PV, Eco-labeled etc...)
Product: Electricity
Grid
Electricity origin is tracked with Guarantees of Origin
Slide 14 23.1.2015
2010’s Reliable and Efficient Tracking with GOs
• Electricity market is already one of the most complex creations of the human mind...
Following the physical flow is simply not feasible
• Instead, energy origin of electricity is
Detached from the physical electricity at point of production;
Traded separately from electricity; and
Reattached at point of consumption
• Guarantees of Origin
Are an efficient accounting system for energy origin
Do not disturb the underlying market
Prevent double counting
Are considered in the grid mix residual mix
• Each GO records all relevant attributes of underlying production
Country of origin, received support, energy source, size of plant, eco-label...
o These details influence GO price significantly
Consumers can buy exactly the type of electricity they want
Slide 15 23.1.2015
2010’s Reliable and Efficient Tracking with GOs
• Electricity market is already one of the most complex creations of the human mind...
Following the physical flow is simply not feasible
• Instead, energy origin of electricity is
Detached from the physical electricity at point of production;
Traded separately from electricity; and
Reattached at point of consumption
• Guarantees of Origin
Are an efficient accounting system for energy origin
Do not disturb the underlying market
Prevent double counting
Are considered in the grid mix residual mix
• Each GO records all relevant attributes of underlying production
Country of origin, received support, energy source, size of plant, eco-label...
o These details influence GO price significantly
Consumers can buy exactly the type of electricity they want
GOs are a RES policy backed by European legislation and designed to allow consumers to vote with their feet
Slide 16 23.1.2015
Electricity Origin without Tracking
Markets for homogenous physical electricity
Residual Mix
Supplier
Generation
Generation Mix
Certificate Registry
Slide 17 23.1.2015
GOs Make Other Electricity ”Dirtier”
– Which they should
GO Registry
GO market
CancellationIssuing
Markets for homogenous physical electricity
Markets for generation attributes
Transfer
Residual Mix
Supplier
Generation
Certificate Registry
ElectricityProduct
