Origin Proofs for the German Mittelstand: How Electricity Can Truly Become Green

In recent years, the awareness for environmental protection and sustainability has significantly increased among both consumers and companies. Particularly, the German Mittelstand shows a growing interest in switching its electricity consumption to renewable energy sources.  One concrete outcome of this development is the rise in demand for green electricity with origin proofs (UN-ER), as predicted by the Federal Environment Agency. According to their estimates, demand is expected to rise by approximately 168.5% from 2023 to 2030, from 216 TWh to about 580 TWh. This impressive growth reflects the increased interest and commitment of companies to renewable energies.

But what exactly are origin proofs and what quality differences exist? In this article, we will address this topic and particularly focus on the concepts of quantity parity, regionality, simultaneity, and additionality.

Source: Federal Environment Agency

What are Origin Proofs?

Origin proofs, also known as "Guarantees of Origin" (GoOs), serve as evidence that a certain amount of electricity has been produced from renewable energy sources. They are a system that creates transparency and trust in the green electricity market. They are regulated in the Energy Industry Act (EnWG).

The origin proof register (HKNR) records and verifies all information regarding electricity generation and marketing. For each amount of electricity produced from renewable energies, an origin proof is issued as an electronic document, which is assigned to the respective electricity producer. By acquiring origin proofs, companies and other customers can ensure that the electricity they use (industrial) electricity actually comes from renewable sources. There are various types of origin proofs, such as the "Origin Proof EE" for electricity from renewable energies and the "Origin Proof KWK" for electricity from combined heat and power.

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What Quality Differences Exist and What Should be Considered?

When selecting origin proofs, companies should pay attention to various quality differences to ensure that their electricity supply is truly green.

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1. Quantity Parity

The first step towards fully purchasing green electricity is quantity parity when buying origin proofs. Companies should ensure that they receive an origin proof that accurately covers the amount of renewable energy produced that they consume.

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2. Regionality

The German Mittelstand often wants to contribute to the energy transition in their own region. In this context, many companies prefer origin proofs that confirm the procurement of electricity from regional renewable energy sources. By purchasing regional origin proofs, companies can support the development of renewable energies in their immediate vicinity.

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3. Simultaneity

A crucial quality aspect is simultaneity. This means that the electricity generation and consumption are based on the same timeframe. Simultaneous origin proofs ensure that the consumed electricity is immediately covered by generation from renewable sources. This is an important factor for companies looking to improve their CO2 footprint and reduce their dependence on fossil fuels. Simultaneity is significantly determined by the choice of the underlying technology. Hydropower has a steady generation profile, while solar power is only generated during the day - especially in summer.

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4. Additionality

Finally, additionality is another quality factor, but it is rarely achieved. This means that the origin proof confirms that the renewable energy was produced in addition to regular electricity generation. Additionality ensures that the purchase of origin proofs actually creates or promotes new renewable energy capacities.

What Criticisms Exist Regarding Origin Proofs?

Despite the positive aspects of origin proofs in the electricity market, there are also criticisms. The lack of uniformity in certification systems leads to a lack of transparency and confusion among consumers. Additionally, there is the challenge of regionality, as electricity can be generated in one place while the origin proofs are sold in another. This raises questions about the actual contribution to the energy transition. Furthermore, it is difficult to measure the actual environmental impact of electricity since origin proofs do not provide concrete information about this. To address these challenges, uniform and transparent certification systems are necessary that establish clear criteria for electricity generation. Additionally, companies should check whether origin proofs meet the criteria of quantity parity, regionality, simultaneity, and additionality. Through careful selection, companies can ensure that the electricity they use actually comes from renewable sources and that they contribute positively to climate protection.

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What Costs Are Associated with an Origin Proof (HKN)?

Currently, the prices for origin proofs for end customers vary depending on the underlying production technology (wind, solar, etc.) and region of origin (e.g., Europe, Scandinavia, etc.), averaging around 8 EUR per megawatt hour, which is 0.8 cents per kilowatt hour (as of July 2023). However, prices also vary with the quality differences described above. Origin proofs can typically be obtained more cheaply by entering into a Power Purchase Agreement (PPA).

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Conclusion: Genuine Green Electricity Is Difficult to Find but Necessary for the Energy Transition

Overall, origin proofs in the electricity market can be a useful tool to give consumers the opportunity to make conscious decisions for a sustainable electricity supply. Nevertheless, further efforts are needed to improve the transparency and reliability of origin proofs and to comprehensively consider the environmental impacts of electricity. Only then can origin proofs reach their full potential and contribute to the energy transition.

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‍trawa relies on verified origin proofs and sources genuine green electricity. We also pass on this practice to our SME customers to provide them with reliable access to sustainable electricity.