To support renewable energy matching, energy exchange Nord Pool and start-up Granular plan to launch an auction system for hourly guarantees of origin (GOs) transaction in the third quarter, as part of a pilot project for establishing 24/7 renewable energy matching in the UK.
Representatives from Nord Pool and Granular revealed during a webinar on January 26 that the firms are finalizing the market architecture for the demonstrator and aim to publish a registration for hourly renewable certificates in the second quarter before moving to an auction test phase. Following that will be a 12-month operational auction phase.
Hourly certificates for renewable generation and storage output would be issued by participating enterprises, which could be exchanged against consumption.
The plan would be linked to the renewable energy guarantee of origin (Rego) mechanism controlled by UK energy regulator Ofgem to avoid double counting the certificates. However, Granular co-founder Bruno Menu stated during the webinar that Ofgem is not a partner in the program.
Despite the fact that the Rego system is annual, Menu claims that certificates can be granted on a monthly basis. Hourly certificates will be issued in one of two ways: either before the relevant Regos are issued and as near to the electricity generation as possible; or generators will release monthly Regos that will be stopped by Unicorn Systems, who provides and operates the Granular certificate registry for the project, and hourly certificates will be issued later.
Auctions might operate on a day-ahead basis, like power markets, or once a month, depending on the solution, Menu added. Consumer willingness and the technical feasibility of what can now be achieved in the UK will be used to make the decision.
To avoid double counting of certificates, the Nord Pool/Granular systems would run in parallel with the Rego scheme, according to Julien Cosse, Nord Pool's strategy and business development director. He stated that the mechanism they will develop in the United Kingdom will be adopted in other countries.
Toby Ferenczi, another Granular co-founder, explained that because existing GOs lack a time stamp and the system is based on annual matching, customers can claim to use solar energy generated during the day in the summer at night in the winter. “This is actually a mispricing,” he explained, “since renewable energy is valued at the same price regardless of the time of day or availability.”