Certificates of origin of energy – renewable sources

What are certificates of origin of energy?

A certificate of origin of energy is a document confirming that a specific amount of electricity was generated from renewable energy sources. In Poland, the body responsible for issuing these certificates is the President of the Energy Regulatory Office (URE). Each certificate is transferred by URE to the Register of Certificates of Origin maintained by the Polish Power Exchange (TGE). Certificates of origin of energy are transferable and constitute an exchange commodity, meaning they can be traded on the energy market. Thanks to this, producers of energy from RES have the opportunity to obtain additional revenue from the sale of these certificates.

Why are certificates of origin of energy obtained?

Obtaining a certificate of origin of energy brings several benefits for both producers and consumers of energy:

• Financial support for RES producers - the sale of certificates of origin is an additional source of income for producers of energy from renewable sources, encouraging investment in this type of technology.
• Fulfillment of legal obligations - energy companies are required to obtain and submit for cancellation a certain number of certificates to increase the share of RES in the national energy mix.
• Transparency for consumers - certificates of origin allow end users to confirm that the energy they have purchased comes from renewable sources, which is important for companies and individuals who care about their ecological image.
• Development of the green energy market - trading in certificates of origin on the energy exchange contributes to the development of the RES market, promoting competition and innovation in the energy sector.

What regulations govern energy certificates of origin?

In Poland, issues related to certificates of origin of energy are regulated by the following legal acts:

• Act of 20 February 2015 on Renewable Energy Sources

Specifies the principles and conditions for the generation, transmission, and distribution of energy from renewable sources, including procedures related to obtaining certificates of origin.

• Energy Law

Regulates the general principles of the functioning of the energy market in Poland, including the obligations of energy companies related to renewable sources.

• Implementing Regulations of the Minister of Climate and Environment

Detail the procedures and requirements for issuing and canceling certificates of origin.

At the European level, the key legal act is Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (the so-called RED II Directive), which establishes a legal framework for promoting renewable energy sources in EU member states.

Energy certificates of origin in the EU and the world

Internationally, energy certificate systems are widely used in the European Union and many other countries. In Europe, so-called Guarantees of Origin (GO or GoO) operate, confirming that a specific amount of energy was produced from renewable sources. National GO registers are maintained by institutions designated by the Member States, such as regulatory authorities or network operators.

According to Article 19 of Directive (EU) 2018/2001, Member States must mutually recognize guarantees of origin issued by other EU countries. Thus, guarantees of origin for RES energy generated in Poland must be recognized in other EU Member States. This approach promotes the harmonization of the renewable energy market in Europe, enabling cross-border trade in certificates and supporting the development of green energy across the continent.

Disadvantages of energy certificates of origin

Despite the advantages offered by the energy certificates of origin system, it also has some disadvantages:

Instability of certificate prices

The prices of energy certificates of origin are shaped by market mechanisms, which can lead to significant fluctuations. Such volatility makes it difficult for RES producers to plan financially and can discourage potential investors from engaging in renewable energy projects.

Risk of oversupply of certificates

In a situation where there is an excess of certificates of origin on the market, their value can drop significantly. Such a situation has occurred in the past, leading to a reduction in the level of support for RES producers and undermining the efficiency of the system.

Restrictions for new investors

The green certificate system is available mainly to RES installations that started producing energy before the amendment of the Act in 2015. New producers are covered by the auction system, which may be less beneficial and constitute a barrier to market entry for new investors.

Challenges related to energy certificates of origin

One of the main problems of the certificates of origin system is the lack of a direct link between the purchase of a certificate and the actual consumption of green energy by the consumer. This can lead to greenwashing and undermine trust in the system. Additionally, the volatility of certificate prices makes it difficult for renewable energy producers to plan financially and can discourage potential investors. It is also worth noting that some "green" energy offers are based solely on the purchase of guarantees of origin, without real support for new investments in renewable sources. This raises doubts about their actual impact on the development of the renewable energy sector.

"Energy certificates of origin are a mechanism supporting the development of renewable energy sources. By confirming the origin from a green energy source, they not only increase market transparency but also motivate companies to invest in renewable technologies. However, for this system to be effective, it must be constantly adapted to changing market and technological realities. Regulatory changes and increasingly restrictive requirements - such as the EU ETS system - necessitate emission reductions, which, in turn, impact energy prices for end users." - says Przemysław Kurylas, Operations Director at DB Energy.

To improve the system of certificates of origin for electricity from renewable energy sources (RES), several aspects should be changed.

First, simplifying administrative procedures for obtaining and redeeming certificates of origin could encourage more producers to use the system.

Second, increasing transparency and availability of information on current rates and forecasts for green and blue certificates would help producers make informed investment decisions.

Finally, introducing mechanisms for flexible adjustment of the level of the obligation to redeem certificates of origin to changing market conditions could ensure a better balance between supply and demand, contributing to greater stability in the RES market.

The future of certificates of origin

The importance of certificates of origin for promoting renewable energy sources is expected to continue growing in the coming years. In the European Union, there is increasing interest in trading guarantees of origin and rising certificate prices, which underline their role in promoting and using energy from RES. At the same time, regulatory changes - such as those introduced in Poland in December 2024 - modify the rules for the cancellation of certificates of origin and fees related to renewable energy sources, potentially affecting the strategies of energy companies. Additionally, growing environmental awareness among consumers and companies is increasing demand for energy from renewable sources and contributing to the further development of the certificates of origin system.

In summary, the certificates of origin system plays a key role in promoting renewable energy sources and supporting the energy transition. However, to make it more effective and responsive to contemporary challenges, continuous monitoring and necessary modifications are required. This is the only way to ensure stable and predictable support for renewable energy producers while achieving sustainability and environmental protection goals.