Germany's power grid operators are discussing the possibility of buying renewables guarantees of origin (GOOs) for their grid losses, delegates heard at a recent online event.
Grid losses in Germany's power system account for about 5-6pc of generated power, amounting to about 27TWh per year. Greenhouse gas (GHG) emissions released by the grid losses total 10.8mn t of CO2, on the basis of Germany's current power mix, Rade Lukic of regional grid operator Schleswig-Holstein Netz's regulatory management unit said.
Germany's grid operators have committed themselves to finding ways to "greenify" their grid losses, Susann Freitag of the regulatory unit of Dutch-German power transmission system operator (TSO) Tennet said. Under current German energy legislation, certifying grid losses is not possible. Grid operators are obliged to tender for grid losses, with the lowest price the only criterion.
TSO representatives at the event acknowledged that part of German grid regulator Bnetza's raison d'etre is to keep grid access fees low. It would be difficult to define an "acceptable" price for a GOO, they said.
Andreas Jahn, senior associate at the Regulatory Assistance Project, said grid operators' business is a regulated one, meaning the issue of potential GOOs should be dealt with by lawmakers and Bnetza.
GOOs are mainly a marketing instrument, and should not be used by regulated companies, Jahn added. A number of delegates rejected this view as being out of date.
Radic said that some distribution grid operators are already starting to face calls to lower their carbon footprint.
The case is even more urgent for green energy retailers, renewable power and gas retailer Lichtblick energy and climate policy co-ordinator Ralf Schmidt-Pleschka said. A renewable retailer "will not have a clean balance" if the grid losses are not taken into account, Schmidt-Pleschka said. Lichtblick precisely does not intend to take the "easy" way, but rather, to fully account for its entire value chain, he added.
A possible change could start with energy legislation stipulating that ecological factors play a role in procuring grid losses, some delegates suggested.
A TSO representative suggested that a mandatory share of GOOs is conceivable, which would call for a certain share of the GOOs used by the TSO to be from renewables sites connected to the respective power grid.
Freitag pointed out the Netherlands, which since 2020 obliges grid operators to fully label their grid losses. And EU legislation allows for the certification of grid losses, she said.
The additional demand for GOOs could easily be met by the current offer within the Association of Issuing Bodies (AIB) region, Hamburg Institut senior researcher Alexandra Styles suggested, referring to a study commissioned by the grid operators to look into the issue of GOOs for grid losses.
Styles said that while the supply of Norwegian and Swiss GOOs may soon face restrictions, this fall in volume will be compensated for by the further expansion of renewable power capacity, and by the opening up of GOOs for subsidised renewables capacity, as suggested under the draft Renewable Energy Directive (RED III).
The lack of transparency on the GOO market remains a problem, Styles said. This may be solved in the medium term, given plans by energy exchange EEX to launch spot auctions for GOOs, she added.
Procuring power purchase agreements (PPA) for grid losses, is not a solution, Freitag said. Not only is signing a PPA significantly more complicated than buying GOOs. PPAs would also hardly be cost-efficient, especially not in the longer term, and the long lifespans of PPAs make comparisons difficult, Freitag said.
Some TSOs are looking at generating some of the power they need themselves, but face restrictions given unbundling rules, Freitag said. The "classic" example would be photovoltaic installations on transformer stations, which would cover just a maximum 5pc of grid losses, Freitag said.
