– Have you heard?
– Heard what?
– RE100 has revised its Technical Criteria.
– You mean the document with rules for member companies of the RE100 campaign regarding renewable electricity procurement and related claims?
– What are the most interesting changes?
– The single market for renewable electricity in Europe was redefined, and RE100 introduces a 15-year commissioning date limit on the facilities which RE100 members may claim purchased renewable electricity from.
– Why is the European single market boundary so important for corporate renewable energy buyers?
– Because within the market boundary, guarantees of origin can be transferred from one country to the other, and are recognized for making renewable energy claims. This also means that by signing a so-called pan-European virtual power purchase agreement, the associated guarantees of origin from a renewable energy project located in one country can be used for the company’s electricity consumption all across Europe, for making renewable energy claims.
– What are the new criteria for a country to be considered as part of the single market in Europe?
– The country should be in the EU single market and should be a member of the Association of Issuing Bodies (AIB). Also, it should have a grid connection to another country meeting the previous two rules.
– What about Bulgaria, Poland, Romania and the UK?
– They won’t be considered as parts of the European single market, because they are not members of the AIB. The UK is not a member of the EU single market, either.
– I see. Is Ireland still part of the European single market?
– It isn’t, because currently the country has an interconnector only with the UK, so it is not grid-connected to the single market for renewable electricity in Europe recognized by RE100. However, this will change once the Celtic Interconnector between Ireland and France is built and operational (expected in 2027). Very tricky, right?
– Yes, it is. Are there any countries exempted from the new rules?
– A couple of microstates like The Channel Islands and Liechtenstein are exempted. They have little domestic energy production and import much of their energy, including renewable electricity attributes from bordering countries which meet the single market rules.
– Great and it makes sense. Does this mean RE100 and CDP will apply the same criteria for the European single market? That would help a lot for companies.
– Probably, and RE100 says that CDP will also adopt these changes in its own guidance.
– That would be fantastic. Now let’s talk a bit about the 15-year commissioning date limit. What does this mean?
– The RE100 technical criteria require companies to procure renewable electricity from projects which were commissioned or repowered not more than 15 years ago.
– What is the reason for this change?
– RE100 says this change is necessary to effectively use corporate demand for renewable electricity to drive change on the grid at the necessary pace.
– It sounds reasonable. However, this may negatively impact the applicability of onsite self-generation and PPA structures, and off-site PPAs, as well.
– Not at all, because these structures (and some others) are exempted from this rule. In case of long-term project-specific contracts corporate buyers are exempted if they are the original offtaker from the project(s), and extensions of those contracts are exempted, as well (even if they exceed 15 years in length).
– Good news. And what about short-term PPAs with projects in the post-subsidy era (for example in Germany) or if a project exits the 15-20-year state subsidy scheme before it expires?
– Great question and I need to check this.
– What should a company do in case of unbundled energy attribute certificate procurement and green electricity supply contracts?
– Corporate buyers should verify the commencement date of projects from which renewable attributes are being sourced from. It can be difficult to identify a project, especially if the retail contract with a supplier is not transparent regarding the energy attributes or if there are many projects included in the supply. The Technical Criteria contains suggestions about how to deal with this challenge.
– Good to know. Is the 15-year rule applicable to 100% of a company’s global electricity consumption?
– RE100 members may exempt procurement of renewable electricity up to a threshold of 15% of their total electricity consumption from this requirement. However, RE100 recommends that companies voluntarily phase-out their use of the 15% threshold as quickly as possible.
– Fair enough. Are the new rules applicable already in 2023?
– No. The new criteria apply to electricity procured in January 2024 and beyond.
– I see. So companies have almost a year to deal with the changes in the Technical Criteria.
– I don’t agree. Companies should get prepared and, among others, review existing renewable energy procurement contracts to see if they meet the new criteria.
– And how many sleeps till breaching the 400 RE members level?
– Considering there are already 397 reported members, we are only weeks or months from there.
– Fantastic! Thank you so much for the detailed explanation, Jason.
– You are always welcome, Jones.