2021-01-08
What will change with FaStGO and RED II?
Previously we discussed the outputs of FaStGO from the perspective of an IT system provider. This time we take another angle and look at the changes from the perspective of the issuing body, the organization that implements the changes brought by RED II and CEN 16325 in practice.
In this post we will explain the effects of the changing regulations. We discuss the considerations brought by the new energy carriers, outline the new data fields and list the topics each issuing body should be considering now regarding the possible HUB connections and changes in the GO scheme rules.
New energy carriers and new considerations
The new regulation will add new energy carriers, gas including hydrogen and heating/cooling, to the Guarantees of Origin (GO)-system. These new energy carriers will require some new administrative infrastructure. Making choices relating to it forms the basis to other necessary changes. The new mandates must be assigned either to existing electricity GO issuing bodies or to new one(s). For example, in Sweden, the Energy Agency will be the issuing body for all energy Carriers. In contrast, the neighboring country Finland seems to lean toward separate issuing bodies. Either way, changes in national regulation and the organization structure may often be required.
Once the organizational structure is decided on, there are several registry-related practical points to consider. For example new data fields and a HUB connection will be necessary. Also new business processes are needed to cover the needs created by the new energy carriers’ GOs.
Regarding these changes, each issuing body needs to ask themselves the following questions:
- What kind of data needs to be handled in practice?
- Can the current registry handle all the new energy providers and several schemes?
- How much would these changes cost?
- Should we buy an additional registry instead of updating the existing one?
Laura Malinen and Marko Lehtovaara
Laura is Grexel’s project manager who spends her days building customer success in various projects. She is a curious follower of the trends and development of the field.
Marko is the CEO of Grexel who has spent the last 20 years studying, building and fixing energy certification systems in Europe and abroad.
In this blog they discuss the FaStGO-project especially from the perspective of a registry service provider.
Each issued GO will contain more information
So, what are the actual changes an electricity GO issuing body must implement? The simple answer would be those that the national implementation of the RED II will require.
The problem is that in many countries the national implementation seems to be late from the June 2021 deadline. This is likely to lead to narrow implementation windows for the issuing bodies. What we can do, even at the absence of national rules, is to look at the RED II itself and the developments around the CEN 16325 standard directly.
This time there is considerably less space for national deviations compared to the earlier versions of the EU GO regulation. In the future the new energy carriers will require new data fields for each newly issued GO. These data fields are either mandatory or optional.
Mandatory fields are such which an issuing body must include and must be able to issue so they need to be considered also in the regulation and scheme rules. Optional fields need not be issued or considered by the national regulation. It is, however, important to study them carefully because, with all the likelihood, also these must be included. This means registries must be built and updated so that they are able to handle also all the optional fields so that no certificate data is lost when they are imported and exported.
The new mandatory fields for power GOs are likely to include
- Energy carrier
- Distribution channel (grid connection)
- Type of support scheme
- The carrying medium
- Aggregation stage
- Temperature range
- Maximum supply pressure and
- Network identity
will be mandatory GO data fields, at least according to the outcome of FaStGO. Naturally the mandatory fields depend on the mandate of the issuing body.
The list of optional fields is much longer and still quite uncertain. We can already safely say it includes a lot of fields relating to sustainability, CO2, and target accounting. The full list of optional and mandatory fields per energy carrier and GO type as proposed by the FaStGO project is available at the Task 3.2 report.
More restricted cancelling
The issuing body’s ability to cancel GOs might become more restricted. The Issuing Body might only be allowed to cancel a GO for use in its own domain. If the issuing body wishes to cancel the GO for use in any other country or domain, several conditions need to be met.
These conditions include for instance such domain being either an EU country (or to have an agreement with EU) and that the Issuing Bodies from both domains and/or countries have agreed to such cancellation.
International transfers
If the domain wants to trade GOs internationally, the choice of HUB to join must be made. Then, naturally, all the related technical changes need to be mapped, planned and made. This is where the cooperation with the registry provider becomes crucial.
The two most dominant HUBs today are AIB and ERGaR. While ERGaR focuses on renewable gases, the AIB focuses on renewal energy in general and has scheme groups for both gas and electricity.
In addition to making choices about the scheme and the associated HUB for biomethane, the issuing body also has to consider hydrogen. The European hydrogen registry has been founded in the frame of the CertifHy project. In the current stage of the CertifHy the hydrogen registry will be opened for broad trading of both renewable and non-renewable hydrogen in the EU.
Links to surrounding regulation
In addition to the above-mentioned considerations, also other surrounding regulation must be considered when creating the RED II compatible system for the second half of 2021. The most important links to other regulation include:
• RED II Article 3 (Union targets)
• Directive 2012/27/EU (Energy Efficiency) Article 14(10) HC-GO
• RED II Article 23 RE-HC targets
• RED II Article 24 DHC RES-% disclosure
• RED II Article 25 Transport sector targets
• RED II Article 29 Sustainability and GHG savings criteria
• Internal Electricity Market (IEM) Directive (2019/944), Annex I (5) Disclosure
To plan and implement the necessary changes, it is important to have a working understanding of these regulatory points. We will cover some of these linkages more in-depth in the future.
Does this sound like a lot of work?
It is, for sure, but the good news is that Grexel can do a lot of it for you.
Grexel’s systems are always compliant with all relevant regulation. This means our customers do not need to worry about their registry being compliant with it. They also don’t have to worry about the cost of compliance.
In other words, we make sure our systems are compliant as a part of our service. There are no added or hidden costs to the customer.
We are also here for you for the scheme creation and other challenges you may face in the process of implementing the new regulation. Having been in the business for almost 20 years, we are able to help. Read more about our consulting services here.
Let’s talk– we are here for you.
