Green certificates system – what does it consist in?

Green certificates system – what does it consist in?
Darrius Drew
It takes approx. 4 minutes to read this article

Renewable energy sources are supposed to help protect the planet. To this end, national governments are trying to support the installation and use of RES. One way of support is green certificates.

Industries based on coal and oil are slowly going down the drain. They were great sources of energy for industrial development, technology development and improvement of living comfort. However, with each passing year, the problem of fossil fuels becomes more acute. Each of us is contributing to the deterioration of our planet by using electricity, much of which is produced from coal. We know that we can’t afford to do this if we want to continue to thrive while preserving nature as we know it.

This problem can be perfectly solved by using what surrounds us and is renewable. This is why more and more homes and businesses are switching to solar, wind, water, biomass and geothermal energy. An additional advantage of using “clean” electricity is the possibility to reduce electricity bills or even to eliminate them practically to zero. Governments through various tools are trying to mobilize us to install renewable energy sources. One of the ways to encourage the transition to green energy is a green certificate.

What are green certificates

Green certificates are digital certificates of origin, which confirm that the electricity produced comes from renewable energy sources, for example by photovoltaic panels. The green certificate system was introduced in Poland on October 1, 2005 and is issued by the president of the Energy Regulatory Office.

Certificates are issued to the producer for each unit of energy produced, i.e. for each 1 kWh. Such certificates allow generators to earn extra money, as they are resold on the Polish Power Exchange

The price of a green certificate is set by the President of the Energy Regulatory Office and is directly linked to the level of the substitution fee, which is made public on 31 March each year. The current price of the green certificate can be checked on the website

The green certificate system applies to RES installations that started selling electricity before the amendment of the law in 2015. After this date, any seller of clean electricity is bound by the auction system, which is increasingly chosen by power plants and is slowly replacing certificates.

Power utilities are required to demonstrate the appropriate share of renewable electricity that has been delivered to consumers. In order to fulfill this obligation, power utilities can buy energy obtained from RES directly from producers or purchase green certificates on the exchange

Substitution fees and penalties are not so bad after all

In case the power utility does not show enough green certificates, it is obliged to pay a replacement fee. If it happens that the replacement fee is also not paid, the power company faces penalties

All fees paid under green certificates go to the National Fund for Environmental Protection and Water Management. This is a very important source of funding for projects related to Renewable Energy Sources. So, if the utility fails to meet the requirements and is forced to pay a higher amount, it simultaneously increases support for the development of RES.

Where did green certificates come from?

Pro-environmental activities of the European Union oblige member countries to act in order to support ecology. Poland also had to comply with the European Energy Law. Green certificates were created for this purpose

Polish power plants have to show appropriate energy balance. In 2020 the balance of green energy was supposed to be 15% of total power production, however it was not achieved.

Main photo of the article: Designed by Freepik

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