Residual Mix Calculation MythBuster: Debunking Common Misconceptions   

Ever felt like the residual mix calculation is shrouded in an aura of mystery, known only to nuclear physicists and GO greybeards?

While it may seem that way, the truth is far from it. Despite its reputation, understanding this calculation is more straightforward and logical than one might think, especially for those with experience in guarantees of origin and energy. In this article, we’re on a mission to demystify the residual mix calculation and debunk the common myths that surround it. We’ll delve into the process details and address some of the most frequently asked questions. 

The timing couldn’t be better as the data collection for the 2023 residual mixes is well underway with the help of disclosure competent bodies across Europe.  

Myth 1: Residual mix calculation is very complex 

Whether this myth holds true is up to interpretation, but I’ll try to break the process down. 

Residual mix is the pool of untracked production 

Residual mix is simply “all generation attributes which are not explicitly tracked”. For each energy source we start from the generation data and deduct all attributes of issued certificates1 and add attributes of expired certificates (expired GOs are considered as though they were never issued). 

For example, the volume of wind power in the residual mix =
Wind power production – issued wind GOs (and other tracking) + expired wind GOs 

This process is repeated for each energy source2. The resulting mix of attributes is called the “Domestic Residual Mix”, which still needs to be balanced with the European Attribute Mix before it becomes the Final Residual Mix. 

The timeframe for all certificate transaction data is 1.4.X – 31.3.X+1, where X is the year for which residual mix is calculated. For electricity generation and consumption data as well as non-certificate-based tracking data, the timeframe is the calendar year X. 

Residual mix is applied to untracked consumption 

The purpose of the residual mix is to “give energy origin” to electricity consumption which is not explicitly tracked with GOs or other tracking instruments. In the next stage of the calculation, the Domestic Residual Mix is compared with the volume of untracked electricity consumption in the country. Untracked consumption means power consumption for which no GO or other tracking instrument is used to guarantee its energy origin. 

Residual mix is balanced internationally 

If the Domestic Residual Mix is larger than untracked electricity consumption in the country, the country has an attribute surplus and “gives” the extra attributes to a so-called “European Attribute Mix” (EAM). The surplus has the energy source distribution of the Domestic Residual Mix. In the opposite case, a country has a larger untracked electricity consumption than its Domestic Residual Mix. In this case, it takes in the European Attribute Mix to fill in the attribute deficit of its Domestic Residual Mix. Because electricity is produced and consumed in equal quantities, the surpluses and deficits match in volume across Europe as a whole. 

The surplus/deficit of attributes always results from the combined effect of international exchange of power and GOs, in the following manner: 

Attribute Surplus/Deficit = Generation – Consumption + net export of power – net export of GOs. 

In essence, if a country exports more GOs than power it has an attribute deficit and vice versa.  

Residual Mix is final after balancing with the European Attribute Mix 

For surplus countries, the composition of the Final Residual Mix is identical to the Domestic Residual Mix. This is because attributes are “given” to the EAM based on  their shares within the Domestic Residual Mix (although the volume reduces, the shares stay the same). For deficit countries, the intake from the EAM is combined with the Domestic Residual Mix to form the Final Residual Mix. 

What about the CO2 value of the residual mix? 

The calculation of the environmental indicators of the residual mix follows the logic of the general calculation with energy sources. We start with the total CO2 emissions of the power sector using input factors from the Ecoinvent-database. From the total CO2 emissions, any emissions represented by tracked fossil GOs are deducted to distinguish how much CO2 resides in the domestic residual mix3. The CO2 factor (in g/kWh) of the Domestic Residual Mix can be obtained by dividing the volume of CO2 (g) in the RM with the RM’s size (kWh). 

In terms of attribute balancing with the EAM, surplus domains give CO2 to the EAM according to the CO2 factor of their respective domestic residual mix. After the surpluses are summed to form the EAM, the CO2 factor of the EAM is established. Deficit domains intake CO2 by multiplying their deficit with the CO2 factor of the EAM. 

Just as in the energy source calculation, for surplus domains, the CO2 factor is the same in the Domestic and Final Residual Mixes, whereas for deficit domains the CO2 from the EAM is pooled with the CO2 in the Domestic Residual Mix to calculate the CO2 factor in the Final Residual Mix (see below). 

The same process is applied to radioactive waste. 

For more information, formulas and figures, please see the residual mix calculation methodology document: 

European Residual Mix | AIB (aib-net.org) à Revised Residual Mix calculation methodology 2020: Shifted Issuance Based Methodology 

Myth 2: No one is able to tell which greenhouse gases and lifecycle emissions are included in the residual mix CO2 value 

Not true. The input factors from Ecoinvent include only direct CO2 emissions so other greenhouse gas emissions as well as lifecycle emissions are not included in the final residual mix CO2 values. It’s true that sometimes the input CO2 factors for residual mixes are reported by the Competent Bodies, in which case they can determine which emissions are included. In general, however, the same scope applies in these cases: no lifecycle emissions and no other GHG than CO2 are included. 

Transmission and distribution losses are considered as consumption in the calculation. Hence the residual mix doesn’t include emissions from T&D losses either. In other words, these T&D losses, just like any other consumption, can be greened with GOs or have the origin of the residual mix. 

Myth 3: Year X residual mix is applied to disclosure only in July of the following year, because it takes 6 months to calculate the residual mix. 

Partly true. However, the biggest reason for the time lag in applying the residual mix to disclosure stems from the disclosure deadline of 31.3. Transactions, which are applicable to disclosure year X continue until 31.3 of year X+1 and thereby we can only start collecting data in April of year X+1. To clarify, this does not mean we think that the cancellation deadline should be moved any earlier, it just explains why there is a delay. 

When data collection  starts in the beginning of April, Competent Bodies need to have adequate time to compile the necessary data. Also, AIB must gather GO statistics covering Q1 of year X+1. 

In early May, we compile the preliminary results of the residual mixes, which are circulated across European Competent Bodies. The Competent Bodies have 1-2 weeks to react in case of clear conflicts with their national results. For these reasons, the final residual mixes can be published at the end of May. 

But the process doesn’t end there. Still, there needs to be time for electricity suppliers to apply the new residual mixes to their bills and promotional materials. The usual given leeway is 1-2 months from the publication of the results. Hence, the residual mix is updated in disclosure statements of suppliers more than half a year after the end of the reference year. 

Myth 4: Residual mix published by AIB is the same as the official residual mix of the country 

Partly true. Yes, for many countries, the methodology accords with the AIB Shifted Issuance Based Residual Mix Calculation Methodology, and the differences between nationally calculated and AIB results are very small if any. Some countries skip the national calculation altogether and rely solely on the mixes published by the AIB, which is a logical and completely reliable approach. In the end, AIB is doing the calculation with the data reported by the competent body so there’s no actual need to do the calculation twice. 

Greater differences are, however, possible. Due to legal or other reasons, some countries may need to apply their own methodologies, such as the approach to remove all renewable energy from the production mix to form a residual mix. 

To avoid conflict with legal disclosure information, the national practices and figures published by the competent body should be checked. 

Myth 5: Residual mix calculation of year X only considers transactions of GOs relating to production year X. 

Not true. This is a common misconception, but it’s easy to see why it’s not true. On March 31, 2024 , a great volume of production year 2023 GOs remain uncancelled, and some might not even be issued yet. Hence, if we restrict the calculation to the reference year production GOs, a significant number of transactions are never considered in the residual mix (because next year the reference year would be 2024, neglecting production year 2023 GOs). 

Therefore, the transaction data collected (issuing, cancellations, expiries) is purely transaction time-based. All transactions occurring between April 1, 2023, and March 31, 2024 are considered, regardless of the production year of the associated GOs. And yes, also issuances are transaction based. 

Another reason for focusing only on the transaction time is that transaction time-based statistics tend to be more reliable throughout Europe than those based on production time. The collected data needs to be compatible across all countries in the calculation. 

As a side note, some countries link the production year of the GO to the year it’s applicable for disclosure. This means, for example, that for disclosure of 2023 consumption, only GOs of production year 2023 may be used. In such cases, most or all the previous production year GOs are used by March 31 of year X+1. But again, we need a methodology that works for all countries. 

As another sidenote, the fact that GO transactions are transaction-based and production data is (well) production based, may lead to some peculiarities. For example, if January and February of year X+1 are very rainy, these issuances would be considered in the RMC of year X, thereby removing more attributes than what are actually issued for year X production. This necessary inaccuracy in the correct portrayal of production years ensures that the RMC fulfills its main goal: protecting the rights of those buying renewable energy by making sure that each issued GO is deducted from the Residual Mix. The portrayal of correct production year in this deduction is only the secondary target.