Latest Changes to Principles

1
Latest Changes to Principles Rules of
Operationand implications

• Enabling a European Energy Certificate System
• Paul Dirix
• (Board member, Association of Issuing Bodies)
• Eurelectric / RECS Lisbon, 18 March 2005

2
Topics

• Role of the AIB
• Standardisation of GO
• the Principles Rules of Operation, the PRO
• Relation between GO, disclosure target counting

3
What is the Association of Issuing Bodies?

• The AIB shall be the leading enabler of
  international energy certificate schemes.

4
AIB member countries by type
GO RECS
GO RECS (applying)
RECS
Neither
TSO (9)
Regulator (2)
Independent (5)
5
The story so far..

• Early 1990s swap deals
• Mid 1990s national initiaves
• I.e. The Groenlabelsystem (Dutch,national only)
• 1999 formation of RECS
• 2001 RECS test phase
• Rules, inter-registry systems link
• 2003 Guarantees of Origin
• Multi-purpose
• New, clearer rules needed
• 2005 PRO implementation, disclosure
• 2006-... CHP, biodiesel, biogas..

6
Highlights what is happening in European
certificate markets (RECS and GO)

• Current Test phase (2001-2)
• 64 million GO and RECS certificates issued 17
  million
• 10 million have been transferred 178
• 29 million have been redeemed 5 million
• Technologies
• Onshore wind (3) Hydro (35) Forestry (58)
• Exporters
• Switzerland (5) Spain (14) Sweden (17)
  Finland (58)
• Importers
• Germany Belgium (1) Switzerland (2)
  Austria (16) Netherlands (80)

7
International transfers (quarterly)
Import
Export
8
Why have a standard for certification?

• Inspection criteria
• Standard measurement

• Accredit
• Really renewable?
• Can you prove it?

• Audit frequencies
• Codes of practice

Other Issuing Bodies

• What is being burned?
• Is it a windy day?

• Inter-registry system protocols
• Connections to exchanges

Issue
Accounts
Transfer

• Certificate format
• Standard calculations

• Who got it?
• Did they want it?

Supplier/ government
Redemption

• Recording certificate use

9
Principles Rules of Operation the PRO

• Core Principles
• Objectives Guidance
• Core Document
• A generic standard for certificate administration
• Rules for Transfers
• Rules for Participation in EECS Schemes
• Compliance
• Change Control
• Chapters
• Scheme Specific Rules
• Subsidiary documents
• Technical standards, codes etc

10
How does the PRO improve on the old Basic
Commitment?

• Clarity
• Tighter meanings liabilities properly assigned
• Coherence a full and detailed process
• Based on experience proper dispute handling
• Subsidiarity harmonisation
• Risk management
• Better return on investment
• Change of process - maturing system
• Change of geographic scope - new countries
• Change of scope of application - new certificates

11
Changes to the framework

• Greater Clarity (and Length)
• Improved Governance
• Improved QA
• Improved Compliance Procedures
• Constitutional Changes

12
The EECS Framework
Admission Criteria
Admission Criteria


The PRO
CHAPTER 2 Voluntary scheme
CHAPTER 1 Obligatory scheme
General Provisions Certification
Voluntary scheme
Obligatory Scheme
DOMAIN PROTOCOL
DOMAIN PROTOCOL
Voluntary Scheme
DOMAIN PROTOCOL
DOMAIN PROTOCOL
Obligatory Scheme
STANDARD TERMS CONDITIONS
STANDARD TERMS CONDITIONS
STANDARD TERMS CONDITIONS
STANDARD TERMS CONDITIONS
Scheme
Member D Voluntary Scheme
Member C Voluntary Scheme
NATIONAL LEGISATION
NATIONAL LEGISATION
Member A Obligatory Scheme
Member B Obligatory Scheme
13
Relationship between parties
National system
Objective Management of Domain Protocol
Objective Management of Basic Commitment
AIB
Document Articles and/or Legislation
Document Articles
Document Basic Commitment
Issuing Bodies
Traders
Document Domain Protocol
Document Service Provision Agreement
Document Inter-IB Agreement
Document Service Provision Agreement
Sub-contractors
Objective Limit Liability
14
The problem single country
15
The problem generation in one country, supply in
another
16
The problem generation in one country, supply in
another (via a 3rd)
17
What is the problem?

• Traditionally, AIB supported a single certificate
  system designed for the voluntary market (except
  CO2)
• Recently, AIB and RECS-I decided about the
  further development of the RECS system into the
  EECS system, which supports Guarantees of Origin
• Meanwhile a variety of policies have been
  implemented, which might not work well with a
  single certificate model
• RES-E target (transfer)
• Revised support schemes (e.g. Elcert)
• plus considerations on how certificates can be
  better integrated in existing RES-E support
  schemes and other policies (such as disclosure)

18
The AIB project

• AIB needs to carefully design its systems in
  order to adapt them to
• Demands from generators, traders, suppliers and
  customers of electricity
• Requirements from EU and national legislation
• Agreement on the future business model is a
  condition for successfully implementing the new
  Principles and Rules of Operation (PRO)
• Any further development of the AIB business model
  should adequately reflect the views of members of
  the AIB and RECS International

19
Success criteria

• The future business model of AIB should
• resolve conflicts between different possible
  certificate systems
• not constrain policy design, but provide a
  tracking system to technically implement it
• accommodate (or otherwise identify) the often
  conflicting requirements of individual systems
• facilitate liquid, secure, transparent,
  non-discriminatory and efficient markets and
• integrate with other tradable certificate systems
  such as those which support emissions trading

20
Four basic models for certificate systems
21
Alternative approaches monolithic
22
Alternative approaches sequential
23
Alternative approaches parallel
24
Constrained parallel model




25
International trade single -gt parallel and back
(simple)
26
International trade single -gt parallel and back
(complex)
27
International trade parallel -gt single and back
(simple)
28
International trade parallel -gt single and back
(complex)
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