“Green” electricity – what do we mean by that?
When it comes to electricity derived from renewable sources, the term “green“ electricity is often used. Since this term is sometimes used in very different ways and is not protected, we would like to use this page to explain how we understand “green” electricity in the contexts that are relevant to us.
In everyday language, “green” electricity often refers to the electrical energy that is generated by plants that produce renewable energy. The term is not legally protected and there is no uniform definition or set criteria. A Guarantee of Origin certificate (“GOO”) can be used to demonstrate that electricity has been generated from renewable sources. A guarantee of origin is generated by the production of 1 MWh of electricity with a registered renewable energy plant that, taking into account the prohibition of double marketing, does not receive any further state funding based on the German Renewable Energy Sources Act (EEG).
A GOO contains information such as the type of renewable energy plant, the energy source, the location of the renewable energy plant and other plant-specific information. Once generated, a GOO is initially credited to the renewable energy plant operator’s account in a register of Guarantees of Origin. Each country in Europe has its own register of Guarantees of Origin for the GOOs generated in that country. In Germany, the Federal Environment Agency (UBA) manages this register (Herkunftsnachweisregister).
The plant operator then has the option of reselling the GOOs generated by their renewable energy plants, i.e. the renewable (or so-called “green”) attribute of the electricity they have produced. In this way, through selling GOOs, any electricity taken from the general power grid can be matched against electricity generated from renewable sources. If a corresponding GOO has been purchased, any matched electricity (whether derived from fossil sources or renewable sources) can be described as “green” or “renewable” electricity, without there being a physical connection, i.e. a cable, between the asset and the point of consumption.
The demand for GOOs can make a positive contribution to the expansion of renewable energies and thus support the energy transition.
Power Purchase Agreements (“PPAs”) are electricity purchase contracts concluded either between renewable energy plant operators and electricity purchasers or as a supply agreement between electricity traders and electricity purchasers. By labeling the electricity sold under a PPA with Guarantees of Origin (“GOO”), the respective seller of the electricity guarantees that the delivered and purchased electricity was generated from renewable energy plants. Such electricity backed up by a GOO can be referred to as “green” or “renewable” electricity.
Particularly in view of the expiration of EEG subsidies, PPAs offer renewable plant operators the opportunity to continue to operate their plants profitably even without statutory subsidies, thus improving the potential profitability of these plants and ultimately promoting the potential expansion of renewable energies.
The so called “other direct marketing” is a category of electricity marketing in which plant operators either market the electricity generated by their renewable energy plants on the exchange themselves or sell it to or through a direct marketing company. Unlike the direct marketing under the EEG, using the market premium model, marketing in these cases takes place without statutory subsidies. In addition to renewable energy plants built on non-eligible sites or not participating in tenders under the EEG, this particularly affects renewable energy plants whose subsidies have already expired (post-EEG plants). Through its joint venture GEWI GmbH, a direct marketing company, GETEC ENERGIE has access to a large number of renewable plant operators and is thus able to purchase electricity generated by those plants, including the GOOs generated by the production, as so called “green” electricity and supply it to its customers.
The electricity consumption of industrial customers or other large commercial customers does not usually correspond to the weather-related volatile generation profile of renewable energy plants.
GETEC ENERGIE offers its customers the option of being fully supplied with electricity from renewable sources at all times. GETEC ENERGIE sells surplus electricity volumes elsewhere without losing the “green” attribute purchased with the GOOs under the PPA. These GOOs can then be used in times of a shortfall, so that, viewed over the year as a whole, the quantity of GOOs corresponds to the quantity of electricity supplied and thus a full supply of electricity from renewable sources takes place. The term “greening of residual quantities” has become established in the energy industry for this procedure.