Green certificates or Guarantees of Origins (GOOs) are very important for the end user in a corporate PPA or direct PPA. Often the company, datacentre or industry has renewable energy targets for its energy consumption.
Buying separate green certificates is a possibility. Major imports of certificates from existing hydroplants in Scandinavia has occurred over the last 10 years. These imports do not create extra sustainability and as such NGOs are becoming more critical of using these certificates for renewable energy claims.
A more acceptable way is contracting directly with a windfarm or solarfarm for a long period of time, where both the power and the green certificates are bought. This makes the purchase of green power very transparent. Furthermore a direct PPA ensures that the claim can be made that the end-user has truly added to sustainability in the world.
Pricing of the certificates in a long-term (>10 years) contract is difficult. Market circumstance are expected to change.
On the one hand there several factors increasing the price of certificates. The demand of the certificates is growing with more companies signing up to renewable energy targets. In Europe, the import of Scandinavian certificates from existing hydroplants is becoming less acceptable (greenwashing).
On the other hand there is a factor decreasing the price. More renewable energy projects are being developed.
Uncertain are the changes in the regulatory systems on certificates. Will a regulator reduce compensation for power if a windfarm makes more money on certificates? Will a change of the regulation system occur? Will additional certificates become available (e.g. NOx certificates)?
Prices of certificates in the PPA can be fixed for shorter periods of time, they can be indexed, they can have break clauses, they can be fixed and they can be escalated. A thorough understanding of the needs of all parties (developer, end-user, bank) is needed together an analysis of the local certificates, the trends and the regulatory system. Wind4ind can do this for you.