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Electricity from renewable sources - a new<br />

opportunity for companies from SEE<br />

Abstract – Modern society is facing rapid electricity demand<br />

growth. Environmental problems are part of almost all serious<br />

discussions regarding electricity. Import dependency of<br />

European countries is rising, too.<br />

One of the solutions is to provide incentives to the use of<br />

electricity produced from renewable sources (RES-E).<br />

Electricity produced from renewables has many well known<br />

advantages. Countries from South Eastern Europe (SEE) have<br />

opportunity to become more active in the green certificate<br />

market. Tradable green certificates and Guarantees of Origin<br />

are well known and are used all over the EU. Tradable green<br />

certificates are commercially based confirmation papers which<br />

are agreed between parties. Guarantees of Origin are part of<br />

EU legislation and they are recognized in all member states.<br />

Index Terms—Tradable green certificates, RECS<br />

certificates, Guarantees of Origin, Renewable sources, South-<br />

Eastern Europe<br />

E<br />

I. INTRODUCTION<br />

NERGY consumption is increasing with the<br />

development of society, despite essential improvement<br />

of technological procedures and efficiency measures. The<br />

development brings us new energy consuming devices<br />

which are accessible to an increasing number of customers.<br />

Increasing of electricity demand requires new production<br />

facilities in the whole system. The biggest negative<br />

influence on environment occurs at the electricity<br />

production side.<br />

Renewable sources (RES) are the best known solution for<br />

electricity production with minimum influence on<br />

environment. European directive on the promotion of<br />

electricity produced from renewable energy sources in the<br />

internal electricity market [1] requires from all member<br />

states to prepare their action plans on promotion of<br />

electricity from RES (RES-E). The directive also brings a<br />

clear definition which energy sources may be treated as<br />

renewable.<br />

In a fully liberalized market electricity from RES is often<br />

uncompetitive, mostly because of high production prices.<br />

Nevertheless, the EU countries are trying to achieve higher<br />

share of electricity produced from RES, as required by the<br />

Electricity from renewable sources – a new opportunity for companies<br />

from SEE<br />

A Špec, Energy Agency of the Republic of Slovenia, Strossmayerjeva<br />

ulica 30, P. O. Box. 1579, 2000 Maribor, Slovenia (e-mail:<br />

andrej.spec@agen-rs.si).<br />

G Škerbinek, Energy Agency of the Republic of Slovenia,<br />

Strossmayerjeva ulica 30, P. O. Box. 1579, 2000 Maribor, Slovenia (e-mail:<br />

gorazd.skerbinek@agen-rs.si).<br />

A. Špec, G. Škerbinek<br />

Directive [1]. To achieve this, they are using different types<br />

of support mechanisms. Well known and used are feed-in<br />

tariffs, tenders, quota obligations and fiscal incentives.<br />

With tradable green certificates (TGCs) and guaranties of<br />

origin (GoOs), producers provide evidences that electricity<br />

was really produced from RES. The addition value of RES-<br />

E due to environmentally friendly production is formed on<br />

the certificate market. Certificate markets are a big<br />

opportunity for countries from South Eastern Europe (SEE),<br />

because they have a large potential for electricity production<br />

from RES.<br />

II. TRADABLE GREEN CERTIFICATES AND GUARANTIES OF<br />

ORIGIN<br />

One of the most interesting tools for stimulating RES-E<br />

are tradable green certificates. A TGC represent an<br />

additional value of electricity due to its production in an<br />

environmentally friendlier way in comparison with the<br />

conventional way of production. This additional value can<br />

be traded in the certificate market.<br />

A. Tradable Green Certificates and Certificate Market<br />

A TGC represents an evidence that electricity was<br />

produced from RES. TGCs by themselves do not represent<br />

incentive for the use of RES-E. They should only be<br />

considered as a tool for achieving a transparent support<br />

system. Some possibilities of their use in supporting RES-E<br />

are given in the next chapter.<br />

The main idea in TGCs is that the added value they<br />

represent is traded in a separate certificate market that is<br />

fully independent from the electricity market. This concept<br />

is shown illustrated in Fig. 1.<br />

Fig. 1. Certificate and electricity market<br />

From the illustration it is evident that electricity and<br />

certificates representing environmental benefits are fully<br />

separated and traded separately. At the end of the supply<br />

chain they should both end up at customers to satisfy their<br />

energy needs (electricity) and environmental requirements<br />

(certificates).<br />

1

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