Exchange trading of green certificates may appear in Russia
According to the forecast of the head of the Market Council association, Maxim Bystrov, the demand for “green” certificates may amount to half of all electricity produced from renewable sources and nuclear power plants in the Russian Federation - 200 million MWh per year.
Some sites intend to start organized trading in green certificates, and the launch of exchange trading is also being considered, said the head of the Market Council association, Maxim Bystrov. The law introducing a system of certification of the origin of electricity comes into force in Russia on February 1. According to Bystrov’s forecast, the demand for “green” certificates could amount to half of all electricity produced from renewable sources and nuclear power plants in Russia - 200 million MWh per year.
“Today we are already conducting preliminary work with several trading platforms that intend to engage in organized trading in certificates. We will continue to promote the work of such platforms, including stock exchanges. This will open up additional opportunities for buyers,” Bystrov said.
What is a green certificate
Green certificates are a tool confirming that a certain amount of electricity was generated using renewable energy sources. It can be stored and transmitted separately from electricity. At the same time, the manufacturer has the right to issue and sell certificates only for the volume of electricity that it can produce.
According to Bystrov, anyone can purchase “green” electricity, regardless of consumption volumes. “At the first stage, most likely, these will be enterprises and organizations. However, we expect that after some time the certificates will be interesting and accessible to ordinary people as well,” says Bystrov. He added that in many countries brokers and traders work in the certificate market: they buy instruments for their clients who, for some reason, do not want to do it themselves. The Market Council believes that such intermediaries will appear in Russia.
About the demand for green certificates
The Market Council emphasized that despite all the global changes, the task of decarbonizing the economy, which was set by Russian President Vladimir Putin, is still relevant.
“Our electric power industry is the largest emitter of greenhouse gases. In the generation structure, it is necessary to increase the share of carbon-free and low-carbon sources, and here voluntary demand for low-carbon electricity can play a significant role,” Bystrov emphasizes. According to him, the demand has been observed for several years, but until now consumers have not had reliable, universally accepted tools to realize this need.
“State interests here coincide with the goals of business and ordinary consumers. Our large companies - metallurgical, petrochemical and others - have not gone anywhere, the “green” agenda remains among their priorities. Ordinary people, mostly young people, also have a desire to make their consumption more responsible and environmentally friendly. The certification system allows both to move in this direction and opens up new “green” opportunities,” notes Bystrov.
Exporters can also be included in a separate group of potential consumers, since in Asian markets the requirements for the carbon footprint of products are sometimes even more stringent than in the West.
At the same time, the system being implemented is voluntary, so the potential of the market for generation attributes and certificates will develop gradually, according to the Market Council.
“In total, in our country, about 400 million MWh are produced every year from renewable sources and nuclear power plants - this is the maximum, maximum market volume for today. If we assume that consumers will demand at least half of this volume, then in the future this turnover could reach up to 200 million MWh per year,” the association believes. At the same time, in 2022, the volume of electricity sales on the wholesale market under direct contracts for supply from low-carbon and renewable generation facilities amounted to more than 70 million MWh.
Green Certificate Law
On February 1, a law came into force in Russia that introduces a system of certification of the origin of electricity - the law on green certificates. It involves the creation of a special organization that will take over the management of most of the business processes - the “Energy Certification Center”. The organization was created on the basis of the NP Market Council and will maintain a register of generation attributes and issue certificates of origin of electricity.
To use the electricity origin certification system, you need to enter into an agreement with the registry operator - the Energy Certification Center - and register in the system. Purchase will also be available through sales companies or other intermediaries. To use the certificate for its intended purpose, the owner must instruct the registry operator to redeem it. From the moment the entry is made in the register, he has the right to talk about the “greenness” of his electricity consumption, including publicly, and apply the “green” labeling of products.
Electricity producers who want to initiate the issuance of a certificate must qualify their generating facility as low-carbon - the procedure will remain the same, from February 1 it will be carried out by the Energy Certification Center. At the same time, the procedure for its payment has changed: if previously a manufacturer qualified its low-carbon facility conditionally “free of charge” - the entire market paid for this through membership fees to the association “NP Market Council”, now the generating company itself will pay for the qualification.
About the cost of transactions in the registry
For the services of the Energy Certification Center in maintaining the register, the Market Council has established two types of payments. “The basic cost of one operation with attributes or certificates will be 2.5 rubles per MWh. For the transfer of the certificate - one ruble per MWh. Depending on the chosen method of designing and transferring attributes, you need to perform several operations. Thus, when transferring generation attributes through a “green” bilateral agreement, the fee for the services of the “Certification Center” will be five rubles per MWh, and with the help of a certificate, if the transfer of rights took place once, six rubles,” explains Bystrov. He added that annual payments are also established for professional participants - users of the register: for a personal account - 50 thousand rubles per year, and for registration of generating facilities in the system - 10 thousand rubles per year for each object.