How do markets develop renewable electricity trading?
At first, there was no market.
The government regulates the price in a tariff.
Then market liberalization comes…
The spot market is established.
Every day, parties talk and agree on the price for tomorrow’s delivery.
Then market participants start talking…
David, the Customer, says: “Hey, I’d like to fix my price for the next year.”
Anna, the Account Manager from the Utility, says: “Let’s do it.”
The forward market is established.
Every day, parties talk and agree on the price for next year’s delivery.
But then, customer’s investors strat asking about #sustainability of their operations…
David: “Hey, I’d like a certificate my electricity comes from renewables.”
Anna: “Let’s do it. I’ll give you mine, and if I’m short, I’ll get the rest from 3rd parties.”
As a result, an Energy Attribute Certificate market is established.
Every day, parties agree on the price for the certificate of electricity attributes, e.g., source/time/region.
But then, the customer gets accused of #greenwashing by his customers.
David: “Hey, I was accused of greenwashing. You were supposed to sell me renewable electricity.”
Anna: “I did certify that there’s a match between the amount of electricity I sold you and the amount of renewable…
David: “Yeah, but in Norway in January. I’m in Spain and consume 24/7/365.
Anna: “Ok. I’ll sell you hourly certificates from Spain, but remember the sun does not always shine and the wind does not always blow.”
As a result, a market for hourly Energy Certificates is established.
Every hour, parties agree on the fair price for the hourly certificate of renewable electricity.
But if the mix of renewables changes.
Carbon emission factors kgCO2/kWh consumed change as well.
Does your energy monitoring tool use dynamic carbon emission factors?
Or do you still use yearly averages?