Guarantees of origin are a certification system that enables electricity consumers in Europe to support the production of renewable energy. The system provides an additional financial incentive for energy companies to produce renewable energy. The ultimate objective is to increase the production of renewable energy within Europe and thereby reduce greenhouse gas emissions.
Guarantees of origin enable electricity consumers in Iceland and Europe (both households and businesses) to ensure that the electricity they consume is renewable, in accordance with a European standard. Guarantees of origin are also used to fulfil the requirements of a number of international ecolabels. This type of certification provides opportunities for companies in the international marketing of products and services. Many global companies choose guarantees of origin as a way of reaching their environmental goals, including
The availability of renewable energy varies in Europe. Many residents and companies are located in areas with limited access to renewable sources of power. Inadequate transmission systems can also make it difficult to develop renewable energy power stations close to the point of consumption. Therefore, electricity consumers who want to support the production of renewable energy may find themselves unable to physically source such energy within their own neighbourhoods.
Guarantees of origin were designed to give all electricity consumers the opportunity to support renewable energy production anywhere in Europe by certifying their electricity purchases, regardless of location.
Guarantees of origin are traded independently, irrespective of the physical energy supply. The figure below shows the flow of electricity through the transmission system and the registration system for the flow of guarantees of origin.
Businesses all over the world are increasingly focusing on environmental leadership and now commonly require suppliers to comply with rigorous environmental protocols that include the use of certified renewable energy.
Guarantees of origin are used in a number of environmental protocols, including the global Greenhouse Gas Protocol. In addition, the European Union increasingly uses guarantees of origin as a prerequisite for participation in public tendering processes within the Union. Companies in Iceland can take part in these tenders because Iceland participates in the guarantees of origin system.
Ecolabels that require guarantees of origin may increase revenues for businesses as value of their products and services increases and the market share grows. Many people are willing to pay higher prices for products with ecolabels and often show greater brand loyalty. Please see links below to Ecolabels that use guarantees of origin as part of their criteria.