50 Shades of Green 19 Sep 2016

Within the last month, two reports have come out outlining the share of renewable energy in Ireland over 2015. The ‘SEM All Island Fuel Mix’ was published on the 7th of September with astounding news! 41% of the All-Island demand was covered by renewable sources. What an amazing result, why have we been so worried about meeting our 2020 renewable target when we’ve just surpassed the mythical 40% mark with 5 years to spare? 

The Sustainable Energy Authority of Ireland on the other hand painted a much more modest picture in their ‘Renewable Electricity in Ireland 2015’ report, stating that 27.3% of Ireland’s demand was supplied by renewable sources. How can that be, what could cause such a large discrepancy?  

The All Island Fuel Mix for 2015 shows that renewables made the largest contribution to the all-island electricity supply at 41.06% (up from 34.46% in 2014) and this is the number that will be printed on the bills of consumers across the country. Delving a little bit deeper into the report with some statistical analysis of demand figures for each supplier outlined in the “Retail Market Report 2015” and the renewable generation outlined in the fuel mix. The results show an even larger figure of approximately 53% of the demand in the Republic of Ireland supplied by renewable energy as Irish suppliers SSE Airtricity, Energia and Vayu all reported 100% renewable energy. 

What the All Island Fuel Mix has though is quite a large caveat: 

“For the purposes of the Fuel Mix Disclosure, suppliers can purchase renewable Guarantees of Origin (GOs). These GOs are certificates that provide customers with certainty that the electricity has been generated from a renewable source. As a result, the renewable share of the supplier fuel mix in this report is higher than the renewable sources used in the production of electricity in Ireland.”    

So what exactly are these Guarantees of Origin and how do they work?

GOs are electronic certificates issued for energy from renewable sources. GOs are issued to eligible Generators, for every 1 MWh of energy produced and effectively labels the electricity as from a renewable source to provide information to electricity customers on the source of their energy.   GOs were introduced in 2009 by an EU Directive (2009/28/EC) which was transposed into law in Ireland, in 2011, via Statutory Instrument 147 of 2011. Suppliers are free to acquire GOs from renewable energy generators from other EU Member States for use in their Fuel Mix Disclosure.

The number of GOs imported from Europe and the UK by suppliers for use in their fuel mix figures increased from circa 5 million in 2014 to 9.6 million in 2015. That equates to 9.6 TWh of renewable energy included in the fuel mix disclosure over the year 2015 that came from outside of Ireland. The graph below shows the percentage of the total Irish demand for 2015 that was supplied by renewable generation produced in Ireland as stated in the SEAI report. This 27.3% can be classified as the greenest of green energy, the rest of the green energy purported by Irish suppliers in the Fuel Mix Disclosure was procured through Guarantees of Origin. 

The sole purpose of GOs is Fuel Mix Disclosure. Suppliers are free to acquire GOs from other EU Member States and the GO does not need to follow the physical flow of the electricity to which it relates. There lies the crux of this whole predicament. The fact that GOs don’t rely on physical flow means that a supplier can replace its conventional “dirty” generation from gas and coal in Ireland with guarantees that an equivalent amount of electricity was produced from “clean” renewable energy somewhere else in Europe. The clean energy bought by the supplier can come from somewhere like Norway which has an abundant amount of hydro generation and can sell GOs at a very cheap price, effectively “green washing” the supplier’s Irish generation.  

When looking at it plainly one might say that renewable energy is still being generated somewhere and the electricity that flows through the lines is the same no matter the source. The green energy that suppliers are paying for when buying GOs is benefiting the same atmosphere and fighting the same climate change issues but can it really be said that the value to the Irish consumer is equivalent to the physical wind farms producing energy on the island?   


SEM-16-055 SEM All Island Fuel Mix & CO2 Emissions 2015

Sustainable Energy Authority of Ireland (SEAI) Renewable Electricity in Ireland 2015

CER16149 Retail Markets Annual Report 2015