Insights

Guarantees of Origin (“GOs”) are electronic documents which confirm that a specific quantity of electricity was produced through high-efficiency cogeneration or from renewable energy sources. They are considered to be essential tools in the transition to a green economy as they play a crucial role in tracking and claiming ownership of clean energy, reducing greenhouse gas emissions, and helping companies achieve renewable energy goals.

The issuance, transfer and cancellation of GOs in Malta are regulated by the Guarantees of Origin of Electricity from High-Efficiency Cogeneration and of Energy from Renewable Energy Sources Regulations (Subsidiary legislation 545.36 of the laws of Malta, and hereinafter referred to as the “Regulations”), which were issued in December 2021.  The Regulator for Energy and Water Services (“REWS”) is the regulator which is tasked with issuing GOs in Malta.

This article delves into the key aspects of the Regulations and how the Regulations envisage GOs to work in practice.

The Regulations’ Scope and Objectives

The Regulations’ primary aim is to create a regulatory framework with three key objectives:

1. Issuing GOs for electricity generated through high-efficiency cogeneration or renewable energy sources;
2. Providing end consumers with information about the share of renewable energy in their energy supply; and
3. Ensuring that the origin of energy produced from renewable energy sources can be guaranteed in accordance with objective, transparent and non-discriminatory criteria.

Applying for GOs

An application for GOs in Malta must cover a period of at least four months and should be in relation to energy or electricity generated in Malta.  A GO is to be issued with respect to each megawatt hour (1MWh) of electricity or energy produced.

An application for a GO is to include detailed information about the electricity or energy being generated, the applicant’s identity and a statement of entitlement by the applicant, the place where the electricity or energy is produced, the type of plant generating or producing the electricity or energy, the date when the installation became operational, and other technical details depending on the energy source.

Upon receiving an application, REWS is required to acknowledge it within 15 days.  A GO will be issued if the application requirements are fulfilled and if REWS is satisfied that the electricity or energy being produced is generated from high-efficiency cogeneration or from renewable energy sources.

The Regulations also clarify that the Regulator is to also recognise guarantees of origin issued by competent authorities in other EU Member States.  GOs issued by third countries will however not be recognised unless the EU would have concluded an agreement on mutual recognition with such third country.

Use of GOs

The Regulations outline how GOs can be used, emphasizing that for the purposes of demonstrating to final customers the share or quantity of energy from renewable sources in an energy supplier’s energy mix (and in the energy supplied to consumers under contracts marketed with reference to the consumption of energy from renewable sources) a GO shall be valid for 12 months from the production of the relevant energy unit.  The Regulations (as well as the Electricity Regulations (Subsidiary legislation 545.34 of the laws of Malta) also require guarantees of origin to be made use of when an electricity supplier is required to demonstrate the share or quantity of energy from renewable sources in its energy mix, including in bills issued to its final customers.

Conclusion

By establishing clear regulations for GO issuance and usage, transparency and accountability is promoted by also enabling businesses to reduce their carbon footprint and support the transition to a sustainable, low-carbon energy future.

To-date these Regulations have sparingly been used in practice, particularly since guarantees of origin cannot be issued to a producer of energy from renewable energy sources that would have received financial support from a support scheme (such as feed-in tariffs).  Nevertheless, opportunities for use of GOs do exist and they offer energy producers a different option where feed-in tariffs (or other support schemes) would not have been obtained for particular projects.