A Decade in Green Trading: Reflections on My 10-Year Stocktake

Over the past 10 years, the GO market has transformed from a niche concept into a vital component of the global green transition. The value of the GOs has increased in recent years and market size continues to grow, but little attention has been given to the important market structure role of GOs as an information carrier and accounting system. This oversight hides how important GOs are for making sure renewable energy is used and accounted for correctly, and that makes it harder to fully grasp their importance beyond just their economic value.

As someone who has closely observed the Guarantee of Origin (GO) market for a decade, I find myself reflecting on the remarkable evolution it has undergone. Over the past 10 years, the GO market has transformed from a niche concept into a vital component of the global green transition.

GOs, or Energy Attribute Certificates more broadly, serve two crucial purposes:
1. they act as both a tracking and accounting method for renewable energy generation and consumption, and
2. they function as a tradable commodity in the marketplace.

The value of the GOs has increased in recent years and market size continues to grow, but little attention has been given to the important market structure role of GOs as an information carrier and accounting system. This oversight hides how important GOs are for making sure renewable energy is used and accounted for correctly, and that makes it harder to fully grasp their importance beyond just their economic value.

GOs as Instruments of Integrity

As industries prioritise clean electricity and electrify their operations, the GO market remains on a solid foundation. Particularly in hard-to-abate sectors, there's a growing demand for green hydrogen and its derivatives made with renewable electricity, aiming to cut emissions. The GO market had been thriving very well, and the rise of the Power Purchase Agreements (PPAs) provided an additional boost to the market. Now, as the green transition gains momentum, it's imperative to stay vigilant: monitoring green energy consumption remains hugely important. The market and the infrastructure surely have to evolve, but without GOs it's difficult to truly claim that the green transition is green. Without GOs, we wouldn't be able to distinguish between a grey and green transition.

Recognising GOs as more than mere tradable commodities allows stakeholders to grasp their pivotal role in driving the green agenda forward. As we navigate the complexities of energy transition, it's important to highlight the significance of GOs as instruments of accountability and integrity in the pursuit of sustainability. Amidst the growth and heightened scrutiny of the GO market, it's crucial to acknowledge their foundational purpose as guardians of renewable energy authenticity. Let's ensure that discussions about market trends always place the vital role of GOs in advancing sustainability at the forefront.

Beyond Minimum Standards

In addition to serving as a foundational framework, it's important to understand that rules and regulations set the minimum level for GOs. However, market participants have the opportunity to go above and beyond these minimum standards, enabling the creation of more accurate correlation if they want and see potential for their customers and stakeholders. As an example, by implementing monthly, hourly or 15-minute matching, additional information layers can be provided. A crucial point here is that the additional information layers do not need to be embedded in the GO itself to make these claims. Companies have always developed their individual customer experiences; relying on standardised products and GOs is no different in that respect. A company interested in this simply needs to walk the extra mile to achieve this from a product development point of view.

Ten years ago, I played lacrosse at the national level. Back then, while one of the oldest sports in North America, it was still considered a novelty in Finland. Similarly, I felt that GOs were in a comparable position. Fast forward to today, GOs have evolved into an indispensable aspect of the energy market. Let's not lose the momentum on the importance of such an accurate, reliable and robust instrument as GOs.

Joni Vuorela

Green Trading Desk Manager
Tel: +358 40 509 4906
joni[dot] vuorela[at] fortum[dot] com