Green Certificates or Guarantees of Origin (GOs): An energy asset that companies can leverage

The so-called Guarantees of Origin (GOs) make it possible to certify that a given amount of electricity has been produced from renewable sources or through high-efficiency cogeneration.

For a company, they can represent much more than an environmental certificate. They can become an energy asset with economic and strategic value. This is where having an energy advisor capable of analysing not only a company's consumption, but also everything that can be obtained and optimised through its relationship with energy, becomes essential.

What exactly is a Guarantee of Origin?

A Guarantee of Origin certifies the renewable origin of a given amount of electricity. In Spain, the system is managed by the Spanish National Commission of Markets and Competition (CNMC).Each Guarantee of Origin represents 1 MWh of energy and is linked to information about its origin and characteristics. Therefore, when a renewable energy installation produces electricity, two different elements can be identified:

• Physical energy: The electricity actually produced by the installation, which can be self-consumed, fed into the grid or sold.

• The renewable attribute: The Guarantee of Origin associated with that production, certifying that the corresponding amount of electricity comes from renewable sources.

This distinction is essential to understanding the value that Guarantees of Origin can have.

Physical energy and the certificate are not exactly the same

A company can generate electricity through a photovoltaic installation and physically use that energy for its own consumption. However, renewable generation can also generate Guarantees of Origin which, within the regulated system, can be transferred and subsequently redeemed on behalf of a consumer.

The CNMC allows for the issuance, transfer, import, export and redemption of Guarantees of Origin. This means that the value of a renewable installation does not necessarily have to be limited exclusively to the savings achieved on the electricity bill.

There may also be value associated with the environmental attributes of the energy produced.

Can a company sell its Guarantees of Origin?

Yes, provided that the applicable conditions and requirements of the system are met. This can be particularly interesting for companies that own renewable generation installations.

A producer can request the issuance of its Guarantees of Origin and subsequently transfer them to other participants, suppliers or final consumers through the established mechanisms.

The CNMC states that producers can transfer their Guarantees to a Spanish energy supplier, export them to a European energy supplier or assign them directly to a final consumer.

Therefore, a company generating renewable energy may have an additional opportunity to create value from that production.

Where is the opportunity for businesses?

Depending on the characteristics of the installation and its contractual structure, it can analyse:

• The energy it self-consumes.

• The energy it feeds into the grid.

• Surplus energy.

• Financial compensation for surplus energy, where applicable.

• The Guarantees of Origin generated.

• The possibility of transferring or commercialising those Guarantees.

• The economic value associated with renewable attributes.

• The overall impact on the profitability of the installation.

The key is not to analyse each element independently.

Guarantees of Origin can become an additional source of income

For a company generating renewable energy, Guarantees of Origin may have an economic value independent of the value of the electricity itself. This makes it possible to develop a strategy for monetising the environmental attributes associated with renewable generation.

For example, a company can generate electricity through a photovoltaic installation and obtain value through several different channels:

1. Energy savings: Self-consumed energy reduces the need to purchase electricity from the grid.

2. Sale or compensation of surplus energy: Energy that is not consumed can receive specific financial treatment depending on the self-consumption arrangement and the contract in place.

3. Value of Guarantees of Origin: Renewable generation can generate Guarantees of Origin that may be transferred within the system and, where a commercially viable transaction exists, provide an additional source of income.

4. Corporate value: The company can use the traceability of its renewable generation to strengthen its environmental objectives and sustainability strategy.

In this way, a renewable installation can generate energy, economic and corporate value simultaneously.

What about companies that do not generate energy?

They can also benefit.A company without its own generation facilities can purchase electricity backed by Guarantees of Origin and have its electricity consumption certified through this system.

Redemption allows specific Guarantees to be assigned to a final consumer through its CUPS or, in certain cases, through the NIF associated with several supply points. This enables companies to obtain traceable certification of the renewable origin associated with their consumption.And this creates another opportunity.

Companies do not need to generate energy themselves to develop a renewable energy strategy.

A company can combine:

• Electricity supply.

• Guarantees of Origin.

• Self-consumption.

• Energy efficiency.

• Energy storage.

• PPAs.

• Environmental certificates and mechanisms.

• Contract optimisation.

The objective is to identify the combination that makes the most sense for its business activity.

Why can Guarantees of Origin be important for corporate strategy?

Guarantees of Origin also have a significant corporate dimension. Increasingly, organisations need to demonstrate to customers, stakeholders, investors and supply chains that their environmental commitments are supported by verifiable information.

There is an important difference between stating:

“Our company uses green energy.”

and being able to demonstrate that electricity consumption has been backed by an official Guarantee of Origin system.The CNMC system exists precisely to provide traceability regarding the origin of electricity and to prevent companies from making unsupported environmental claims.

For this reason, Guarantees of Origin can form part of a broader strategy focused on sustainability, ESG and corporate decarbonisation.

How can a company make the most of Guarantees of Origin?

This is where energy advisory and management becomes truly valuable.

A company generating renewable energy should ask itself:

• Am I making proper use of all the energy I produce?

• Am I optimising my self-consumption?

• What am I doing with my surplus energy?

• Am I properly managing the Guarantees of Origin associated with my generation?

• Could they have additional economic value?

• Am I correctly integrating my renewable generation into my corporate strategy?

A company purchasing electricity should also consider:

• Am I purchasing renewable energy with properly accredited Guarantees of Origin?

• Can I use this information as part of my ESG strategy?

• Is the contracted solution economically competitive?

• Is there an alternative that is better suited to my consumption profile?

These questions should not be analysed in isolation.

RwC Energy Partners: Comprehensive Energy Management

Our role as your energy advisors and energy management specialists is to analyse energy from a global perspective. We study consumption, contracts, energy markets, renewable generation and the opportunities that may exist around each installation.

Within the field of renewable energy, we can analyse together:

1. Self-consumption: To determine the real generation and savings potential of each installation.

2. Surplus energy: To assess the available alternatives and optimise the value of energy that is not self-consumed.

3. Guarantees of Origin: To analyse their management, traceability and potential economic value.

4. PPAs: To assess renewable energy supply solutions over the medium and long term.

5. Energy efficiency: To reduce consumption before determining new generation requirements.

6. Electricity supply: To secure competitive conditions suited to the company's consumption profile.

7. Ongoing management: Because a good energy decision today should continue to be reviewed tomorrow.

The real value lies in managing all these elements together

When all these decisions are analysed together, a company's energy strategy takes on a completely different dimension. 

• A photovoltaic installation can reduce the electricity bill.

• A contract can improve the price of energy.

• A Guarantee of Origin can certify the renewable origin of electricity.

• An energy-efficiency measure can reduce consumption and generate CAEs, creating an additional economic return.

We want to be your energy advisors and energy management specialists, continuously analysing where opportunities may exist for savings, optimisation, additional revenue or improvements to your energy strategy.

Because generating renewable energy does not simply mean producing electricity. It also means properly managing the value behind every MWh generated. 

And that is where effective energy management can make the difference.

RwC Energy Partners
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