Tradable green certificates ASCerT Sandor MOLNAR REEEP - REC Workshop Szentendre 2003

12 month project (Jan – Dec 2003) Supported by European Commission Directorate General for Research Objective: To examine the potential for using tradable green certificates to promote renewable electricity in five EU accession countries. ASCerT project basics

Composition of the team Bulgaria, ESD Bulgaria Poland, EC BREC Hungary, Systemexpert Czech Republic, Cityplan Romania, ICEMENERG UK, ESD Austria, KWI

The ‘green value’ is split from the physical energy Environmental benefit - certificates Energy - kWh RE producer Certificate market Energy market Fundamental principle for TGCs

Environmental benefit - certificates Energy - kWh RE producer Certificate market Energy market Green certificate basics Tradable green certificates are: Issued to producers for each unit of energy produced by the eligible (i.e. accredited) renewable plant Denominated in units of energy (e.g. 1 MWh) Usually electronic, for ease of trade, tracking and storage

Element (1): Definition of the certificate Environmental benefit - certificates Certificat e market TGC Other points: Certificates can be sold separately from the electricity And unlike electricity: –Consumer does not have to be physically (grid) connected to producer –Certificates do not have to be sold/consumed at time of generation  Enables competition & increases market efficiency

Certificate uses For guarantee of origin of electricity (requirement of EU Renewables Directive) For green tariffs – consumer choice For enabling trade For renewable energy support schemes –Use with financial support (subsidies, tax breaks, feed-in tariffs) –Use for quotas (or ‘obligations’ or ‘portfolio standards’)

Value of TGC to support RES-E System marginal cost (mc) of RES-E production Wholesale electricity Price (P) x x RES-E producers competitive without support up to here Plant A Plant B A TGC scheme creates a market value for certificates to cover additional cost of RES-E production

ASCerT considering application of TGCs in Accession countries Main interest – using certificates to meet renewable energy targets (indicative targets part of the RE Directive) Can consider other applications as well –Guarantee of Origin –Mechanism to trade renewable benefits international (v. limited demand at present, but likely to increase)

ASCerT Objectives ‘Intellectual’ objectives Explore the options for utilising TGCs to achieve renewable electricity targets Examine the prospects for integration of TGC systems between the NAS and the EU Examine the use of TGC systems in the light of current and forthcoming EU legislation ‘Outward looking’ objectives Raise awareness Help achieve consensus among key stakeholders Assist the NAS to frame and develop market mechanisms to support renewables growth

Project approach Fact: Project has very modest budget Important to ‘work smart’: –Use existing information. –Maximise ‘in-kind’ contributions from stakeholders Important to maximise benefits for partners, for example: –Secure co-funding? –Secure follow on work? –Use project work to support other company activities? –Marketing – raise company profiles in area?

ASCerT activities Phase 3: Outline design of national schemes: - Working document - National seminar (September?) Phase 4: Cost benefit analysis & recommendations: - Working document - National seminar (December?) Phase 2: Assessment of electricity sectors: - Working document Phase 1: Inception - Formation of Country teams ASCerT activities in each study country : International activities: Regular ‘Core team’ meetings International seminar (Budapest, September 18th) International seminar (Sofia, December 4th) Project reporting (ESD Ltd)

Composition of the Hungarian country team After a bit of amendment to the invitation letter, it was sent to the potential partners and experts of this field, with the agreed necessary information. This was successful, as the Hungarian Country Team was founded with the aim to incorporate different areas of research and practice by experts from the following institutions: MVM, the Hungarian Power Companies REC, Regional Environmental Center CEU, Department of Environment Co-Energy, engineering firm specialising in renewable energy Ministry of Environment, Dept. of Strategic Planning Ministry of Economic Affairs,

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