Today’s energy transformation has led major energy consumers to explore new business models to take part in energy transition and use them for their own needs. Corporate consumers, who have an important place in accelerating the energy transition, have voluntarily turned to renewable energy supply to achieve the reducing greenhouse gas emission targets expected of them. In response to these needs, energy sector players have promoted renewable energy projects with different methods by developing business models that obtained an acceptance in many countries around the world.
In international energy markets, most preferred business models, in order to procure renewable energy by corporate consumers, are emerging as the systems of (i) self-generation or self-consumption, (ii) unbundled energy certificate attribute, (iii) green energy offers, and (iv) renewable power purchase agreements (PPA).
In electricity markets where not all of these supply methods have yet developed, one of the most preferred method of purchasing renewable energy of corporate consumers is the purchase of energy attribute certificates.
In this article, we will provide brief information regarding renewable energy attribute certificates in the context of the Turkish energy market.
Certification and Tracking of Energy Resources in the Context of Turkish Law:
One of the methods that institutions use when performing energy transition is the purchase of renewable energy attribute certificates from a renewable energy producer or from brokerage companies trading these attribute certificates in a way unbundled from electricity – without purchasing electricity – or along with electricity.
Companies meet their renewable energy consumption targets by purchasing these products in a way that corresponds to their electricity consumption.
These certificates, which are used to track the resource of the generated energy, contain information about the characteristics specific to the power plant where the electricity is generated, such as the location of the power plant, the resource from which the electricity is generated (technology), and the age of the power plant or whether it receives incentives.
Until the Regulation on Renewable Energy Resource Guarantee Certificate will enter into force, one should review the Regulation on Certification and Support of Renewable Energy Resources for information regarding renewable energy resource certificates. Article 24 of the Regulation on Certification and Support of Renewable Energy Resources states that the Renewable Energy Resource (the “RES”) certificate will be issued to producers producing electricity under the renewable energy resource license (i) to determine and track the resource type of electricity produced from the power plant and (ii) to benefit from the applications within the scope of RESSUM (the Renewable Energy Resources Support Mechanism). There is no regulation in the electricity legislation related to the unbundled transfer of the RES documents (without electricity purchase). However, the fact that the RES document is issued in order to benefit from RESSUM applications may be interpreted as that a power plant that benefits from RESSUM cannot transfer unbundled RES document. Moreover, the presence of certificates accepted in international markets will cause that the transfer of RES documents is not preferred by foreign institutions or institutions with foreign partners in practice. In addition, despite these regulations in the legislation, the RES document is not issued in practice. Therefore, the circulation of the RES document does not occur in practice.
Since 2016, it has been possible to certify Turkish renewable energy plants through the I-REC system and transfer these certificates unbundled.
Novelties in Renewable Energy Resource Guarantee Document System
Parallel to the developments in international markets, the Regulation on Renewable Energy Resource Guarantee Certificate in Electricity Market, issued by the Energy Market Regulatory Authority (the “EMRA”) on the subject, was published in the Official Gazette, numbered 31304 and dated November 14, 2020. The regulation will enter into force on June 1, 2021.
According to the statement made by the EMRA, the RES – G system introduced by the regulation was created by taking into account the guarantee of origin (“GO”) structure in order to facilitate compliance with the system used in the European Union.
The RES – G system introduced by the regulation can be summarized as follows:
- 1 (one) renewable energy resource guarantee document (“RES – G document”) may be issued for every documentable 1 MWh production.
- Although RES – G certification is provided only for licensed power plants in the current situation, the EMRA reported that it is working on a structure that will allow unlicensed power plants to enter this system.
- The system is designed as a voluntary market and has stated that only the resource of electricity consumed for consumers who supply electricity through the green tariff can only be made by the authorized supply companies with the redemption of the RES – G document obtained from the RES – G market.
- The relevant renewable energy power plant can be registered as a user in the RES – G system for each calendar year.
- In order to prevent double counting, the EMRA regulates that a power plant that registers in a certificate market aiming at providing information on the nature of energy, other than the RES – G system, in a calendar year will not be allowed to register in the RES – G system. Although the Procedures and Principles governing the details of the system have not yet been published, we believe that the tracking of double counting will be made based on the declaration and that the penalties stipulated in the legislation will be applied in case of violation.
- License holders which have multiple-source electricity generation plants will be able to participate in the RES-G system and the organized RES-G market if only all of the energy sources used in the plant are renewable.
- In accordance with the Regulation, the EMRA will function as a regulatory and supervisory body, Enerji Piyasaları İşletme A.Ş. (“EPİAŞ”), on the other hand, will perform the basic market functions included in the Regulation and assume the operation of the organized RES – G market by creating the RES – G system.
- In the RES – G system, the meanings given to the terms export, transfer, redemption, repeal, disclosure, and cancellation provide information on how the system will work. Accordingly, EPİAŞ will issue the RES – G certificate electronically with the request of the legal entity that owns the licensed power plant and is included in the database. The fact that a certain amount or proportion of electrical energy supplied to consumers is produced from renewable energy sources and documented through the RES-G certificate is disclosed to consumers by suppliers through an invoice and/or other disclosure means with it. By trading the documents, the transfer of RES – G documents between the system users will occur. A RES – G certificate is redeemed by the supplier by associating it with a specific renewable energy consumption. The life of an issued certificate is twelve months. At the end of these twelve months, the relevant document will be canceled.
- Certificates can be bought and sold between market players by bilateral agreement together with energy or unbundled from energy.
 For example, RE100 or Renewable Energy Demand Enhancement (REDE)
 The term “unbundled energy attribute certificates” (EACs) is used in America for the term GO, which is adopted in Europe.
 In some countries, it is used as utility green procurement.
 Corporate Sourcing of Renewables: Markets And Industry Trends, IRENA 2018 and EU WWF Report Global Corporate Renewable Power Procurement Models Lesson from India
 The reason why the license emphasis is specifically made here is to state that the Renewable Energy Resource (the “RES”) document will be used for producer license holders and only for the identification and tracking of proof of the resource type.