What are guarantees of origin?

The topics of environmental protection, sustainability and resources have long since shed the ‘niche’ label. On the contrary: awareness of the need to conserve resources is constantly increasing, both in companies and in private households. As a result, the demand for green electricity is also increasing. More and more companies and consumers want their electricity to be generated using renewable energies. One way of guaranteeing this is through guarantees of origin (GOs). Their demand is currently experiencing a steep rise. The Federal Environment Agency even estimates that the demand for green electricity with guarantees of origin will more than double between 2023 and 2030, from 216 to 580 terawatt hours.

But what are the guarantees of origin all about and what are the differences? In this article, we provide an overview and clarify the most important questions.

Guarantees of origin could be described as the ‘birth certificate’ for every megawatt hour of green electricity. In Germany, electricity labelling is mandatory - end consumers must be able to identify the sources from which their electricity originates. These sources include coal, gas or renewable energies such as wind or photovoltaics.

Guarantees of origin for electricity are electronic certificates. They prove that a certain amount of electricity comes from renewable energy sources. They are listed in the Federal Environment Agency's register of guarantees of origin. The Federal Environment Agency issues an electronic document - the guarantee of origin - for each quantity of electricity from renewable energy sources. The guarantees of origin for electricity are allocated to the respective electricity producer. The producer can sell it and transfer it to the buyer - for example an electricity supplier or a company - in the register of guarantees of origin.

According to the EU Commission, guarantees of origin are the only way to declare green electricity as such. They are recognised as proof by EU Directive 2009/28/EC and national law. By purchasing green electricity and corresponding guarantees of origin, electricity suppliers can therefore actively contribute to the promotion of renewable energies.
 

The system of guarantees of origin is a useful instrument for bringing transparency to the market for green electricity. Guarantees of origin are traceable and prove that the electricity used was actually generated from renewable energy sources.
 

In this way, a guarantee of origin for electricity provides security:

• An electricity producer can sell its green electricity to an electricity provider throughout Europe.
• The electricity provider may sell on the green electricity to its customers in the exact quantity for which it has purchased guarantees of origin in the register of guarantees of origin.
• For every megawatt hour of electricity consumed, a certificate in the register of guarantees of origin is cancelled for the electricity provider - similar to a ticket.
• The HKN can then no longer be passed on. This means that green electricity cannot be marketed twice.
• Electricity suppliers can only show their end customers the amount of electricity from renewable energy sources that was actually produced.
   

The certificates of origin are issued by the Federal Environment Agency. This means that consumers and customers can be sure that their electricity was actually generated from renewable energy sources and fed into the electricity grid.

There are two types of green electricity guarantees of origin: the ‘Renewable Energy Guarantee of Origin’ for electricity from renewable energies and the ‘CHP Guarantee of Origin’ for electricity from combined heat and power generation.
 

On 4 January 2023, the German government also passed a new Guarantees of Origin Register Act. This provides for the establishment of a register of guarantees of origin for gas and hydrogen as well as a register for heating or cooling from renewable energy sources. The ordinance is also referred to as the Gas Heating and Cooling Guarantee of Origin Register Ordinance.

Just like a real birth certificate, a green electricity certificate also states the origin in facts and figures. This means that the proof of origin certifies how and where the green electricity was produced. It also contains information about how the electricity was produced, for example the location and age of the generation plant. Such information may be important later on, for example for the awarding of quality labels for green electricity. 
 

Every guarantee of origin for electricity must contain the following data:

• Master data of the plant (type, type, location, output, date of commissioning, start and end of electricity generation)
• Amount of electricity generated in megawatt hours
• Type and scope of the subsidy with which the construction or electricity generation was supported
• Date of issue of the guarantee of origin, issuing state and unique identification number
   

If you compare green electricity with a car, you could say that the guarantee of origin is the basic model and a green electricity label is the extra. The HKN certifies that one megawatt hour of electricity comes from a renewable energy plant. The quality of the green electricity can then be assessed using information such as the generation rate and the location of the plant. There are green electricity labels for this purpose. As with other quality labels, there are more and less stringent labels for green electricity. However, they all have to fulfil certain criteria.

In the case of renowned green electricity labels such as ‘Grüner Strom Label’, ‘OK Power’ or certain TÜV labels (such as TÜV Süd EE01 and EE02), the electricity must come entirely from renewable energy sources. In addition, the supplier must not have any involvement in fossil-fuelled power plants. Other criteria include a low age of the plants or the promotion of innovative projects for the energy transition or climate protection. A green electricity label therefore indicates that the electricity was produced from renewable energy sources and also proves what additional positive effects it has on the environment.

What function do guarantees of origin fulfil for customers and producers?

Everyone who wants to participate in the promotion of a clean electricity supply benefits from green electricity certificates. For electricity producers (e.g. wind and solar power plants), they also offer an additional source of income if they cannot or do not wish to receive the subsidy from the EEG.

Guarantees of origin are interesting for customers in many respects. First and foremost, green electricity certificates create transparency and security for consumers, as they guarantee that electricity suppliers are actually selling green electricity.

Customers can also support the energy transition with green electricity guarantees of origin: The greater the demand for green electricity, the more the expansion of renewable energies is boosted. Customers also have the option of customising the HKN for electricity to suit their individual requirements. Special quality criteria are becoming increasingly important, for example regionality, generation technologies or the synchronisation of generation and consumption. Companies can specifically purchase HKNs from wind, hydro or solar power. Or they can specifically purchase electricity with guarantees of origin from their respective region. In this way, they support the development of renewable energies for a more sustainable future in their region.

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