50Hertz and partners launch green granular guarantees of origin

Eneco subsidiary LichtBlick, transmission system operator 50Hertz and start-up Granular Energy have launched a pilot project aiming to provide hourly transparency on the origin of green power.

As part of the project, several LichtBlick corporate customers have been given access to a platform set up by Granular Energy to track the time at which they purchase green electricity from specific renewable generation plants.

The certificates of origin generated in the process can then be collected and managed in 50Hertz’s Energy Track & Trace Register.

In a public release issued by 50Hertz on the announcement, they state the importance of market-based integration of more electricity from renewable energy sources as crucial for reaching climate neutrality.

More detailed guarantees of origin for green electricity, they add, can play an important role in this by using price signals to stimulate the efficient and system-serving use of storage facilities or flexible appliances, such as heat pumps or electric vehicles.

Enno Wolf, chief operating officer of LichtBlick, stated that “guarantees of origin are green energy birth certificates. They create transparency and prevent the double marketing of green electricity. So far, however, the certificates have not usually guaranteed that the green electricity assigned to a customer has actually been generated at the time of consumption.

“This is where the system can and must be improved. Through our project, we are demonstrating that it is possible to reconcile the generation and consumption of green electricity on an hourly basis.”

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Granular guarantees of origin

According to the German TSO, 50Hertz, companies in the future will need more transparency concerning the origin of their electricity.

They will want to know the exact times at which they are purchasing electricity from renewable sources so that they can use this as a basis for coordinating procurement strategies and consumption patterns.

Granular guarantees of origin that are provided on an hourly basis would allow these companies to ensure that they are purchasing a certain amount of green electricity over the course of a year – green electricity which is verifiable on an hourly basis.

“Hourly energy tracking is critical for increasing confidence in green power products. It also creates a razor-sharp price signal that will accelerate investment in the technologies needed to deliver clean energy around the world on a 24/7 basis,” explained Toby Ferenczi, the co-founder of Granular.

“This is because companies will be able to set more precise targets for matching the production and consumption of electricity. This will also generate financial incentives for the growth of flexibility and storage.”

To be able to acquire and manage the hourly certificates, 50Hertz has launched a system called the Energy Track & Trace Register with Elia Transmission Belgium, the Danish grid operator Energinet and the Estonian grid operator Elering.

Dirk Biermann, chief markets and system operations officer (CMO) at 50Hertz stated: “Across the 50Hertz grid area, renewable energy already meets up to 65% of annual electricity consumption.

“To make this 100%, we need additional market-based instruments to set the right investment incentives. Under the current system, consumers can claim to consume solar energy during the night. Going forward, the market and the physical reality must be more closely aligned.”

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A green ‘birth certificate’

Since 2013, for electricity to be declared ‘green’ in Germany, it has needed to bear a green certificate of origin, which must be purchased by electricity suppliers in addition to the physical electricity itself.

Guarantees of origin, state 50Hertz, are the only precisely defined method for proving the renewable origin of electricity; they also serve as a stamp of approval that provides security, transparency and traceability in the green electricity market.

Electricity consumers can find this label on their annual electricity bills and can thus understand the composition of the electricity mixes of their electricity suppliers. Until now, providing this information on a yearly basis has been sufficient.

Hour-by-hour reconciliation between consumption and production is not required in Germany, however, electricity from renewables generated in the country and marketed and remunerated based on the Renewable Energy Sources Act (EEG) does not receive a guarantee of origin.

The legislator has so far justified this with a ban on double marketing. However, this is currently under discussion at EU level.

The project will be evaluated within the Marktoffensive Erneuerbare Energien framework.