Friday, 04 September 2020
RECS International has worked with stakeholders in attempting to secure technical agreement between the EU and Switzerland on the mutual recognition of Guarantees of Origin (GOs) between the two parties. Brexit also gives rise to similar concerns over UK and REGOs.
The need for such an agreement arises from the Renewable Energy Directive (RED) II Article 19 Paragraph 11:
"Member States shall not recognise guarantees of origins issued by a third country except where the Union has concluded an agreement with that third country on mutual recognition of guarantees of origin issued in the Union and compatible guarantees of origin systems established in that third country, and only where there is direct import or export of energy."
Due to the implementation of this into national law of the RED II in July 2021, Swiss renewable energy producers will no longer be able to sell their GOs into the EU’s Internal Market for usage in national disclosure schemes as regulated in RED II.
However, the Swiss Federal Office of Energy (SFOE) has decided that Switzerland will unilaterally allow Swiss energy consumers to import GOs from the EU’s Internal Market for cancellation in Switzerland.
The UK is in a similar situation as they prepare to leave the EU. With regards to UK GOs (REGOs). The administrators of the REGO scheme, Ofgem, have stated they will continue to accept EU GOs regardless of exit negotiation outcomes. However, similar to Switzerland, there is uncertainty regarding acceptance of their domestic (RE)GOs by EU member states.
Switzerland and the UK are net importers of GOs; acceptance of EU GOs in these jurisdictions is seen as a key measure to avoid sharp price swings for domestic GOs.
Nevertherless, both nations report sizeable GO exports to the EU (5.4 GWh for Switzerland in 2019 production, 7.5 TWh for the UK for 2019-2020), highlighting the importance of further negotiations.
Norway, the largest issuers of GOs in the AIB, while not part of the EU are party to the European Free Trade Agreement (EFTA), thus part of the European Economic Area (EEA) and will not be hindered by similar issues.