The European Power Exchange (EPEX SPOT), European Energy Exchange (EEX) and European Commodity Clearing (ECC) plan to jointly launch a pan-European market for guarantees of origin (GOs) as part of EEX Group’s ongoing efforts to support the energy transition with market-based instruments.
The planned GOs spot auctions will be held once a month and operated by EPEX SPOT, Europe’s leading power spot exchange, under the exchange’s membership and market rules. Clearing and settlement will be conducted by the clearing house ECC and EEX will ensure delivery through its French GO registry. The launch of the new trading products is envisaged within the second quarter 2022, subject to successful testing and market readiness.
Guarantees of origin are a tracking instrument that allows to confirm the origin of electricity and to determine the quantity stemming from renewable production within the total of electricity that flows through the grid. This makes them an indispensable tool to promote the production and consumption of green electricity, by ensuring its traceability and to enable investments into renewables. Thanks to this mechanism, European consumers subscribing to a green electricity offer with their energy provider can be assured that the exact amount of electricity they consume has been injected from renewable sources into the grid.
Chief Strategy Officer of EEX Tobias Paulun said that EEX Group has a track record in operating registries for guarantees of origin and organizing GO primary auctions on behalf of member states. Through this launch, EEX Group is not only responding to a market’s need for a stronger and transparent price signal, it also falls within the efforts to fight climate change through a transition to renewable energy. In the context of the energy transition, a well-functioning and exchange-based GO market brings transparency on the traded products and the technologies that are most demanded on the market.
The market design of this new pan-European spot auction foresees a monthly multilateral auction for GOs from renewable production in selected countries that are part of the European Energy Certificate System (EECS), as set by the Association of Issuing Bodies (AIB). Buyers and sellers will be able to access both specific and generic GOs within one pay-as-clear auction, optimizing market liquidity. Several levels of specificity within three dimensions will be made available: country, technology, and subsidy regime. Indices will be published following each auction. Market participants will join a strong and diverse European trading community of more than 300 members backed by reliable membership and market rules.