100% renewable energy of ON Power
The guarantee of origin of electricity is a business system, which European countries developed to encourage renewable energy production.
What is guarantee of origin?
Guarantee of origin is a confirmation that electricity is produced from a renewable natural resource.
How does the system work?
The guarantee of origin system was put in place to counteract global warming in accordance with international treaties. Guarantee of origin provides a user of electricity an approved way to make known that their electricity use is eco-friendly. With European directive 2009/28/BC and later Icelandic regulation 757/2012 the guarantee of origin became a specific commodity that carries information about the method of production (wind power, hydroelectric power, geothermal power) along with the age of the power plant that provided the electricity. Marketing a specific method to harness green energy is made possible with this system.
The system allows each power plant developer to sell their guarantee of origin on the open market and to gain better yields for their product as a result. This is the incentive for renewable production as the developers can sell guarantee of origin and increase their revenue with eco-friendly energy production. A higher market price for guarantee of origin means a greater incentive to harness renewable energy.
Why sell guarantee of origin?
The electricity produced domestically utilizes renewable energy allowing Icelandic power companies to sell their guarantee of origin while using the increase in revenue to invest in eco-friendly projects.
Where can I get confirmation for eco-friendly electricity use?
ON Power provides its customers, excluding heavy industry, with a guarantee of origin for their use of electricity free of charge. On My pages users can apply for a guarantee of origin confirmation.
Heavy industry is offered to buy their guarantee of origin at market value.
Who wants to buy a guarantee of origin?
There is great demand for guarantee of origin from abroad where the electricity in the transmission system is not pure and therefore no way of confirming, without guarantee of origin, whether the electricity flowing through the electric outlet is from a renewable energy source. Individuals and companies concerned for the environment can buy guarantee of origin and in the act help support renewable energy. Some of the largest companies in the world have made it their goal to certify all their electricity use by buying guarantee of origin. Creating further incentive for power plant developers to invest in renewable energy.
How does ON Power use the income from guarantee of origin sales?
The income generated from guarantee of origin sales forms a fund that is utilized for projects with environmental benefits and innovation at ON Power. All funded projects aim at reduction of greenhouse gases.
Between 2014-2019 the fund supported projects in relation to the energy switch in transportation.
Guarantee of origin in a nutshell
- By law Iceland belongs to the European energy market and its certification system for the origins of electricity.
- Guarantee of origin supports renewable energy production and counteracts global warming.
- Without guarantee of origin the electricity is considered to come from the joint energy pool of Europe. Which is the reason why energy sources that are not used in Iceland (like nuclear energy) appear on local energy bills.
- Renewable energy is used in Iceland but to get it certified as such a guarantee of origin is necessary.
- Participation in this system does not affect Iceland’s obligations with regard to climate issues.