Guarantees of origin: what they are and how they are sold

What it is, and which regulations govern it

The guarantee of origin, abbreviated as GO, is an electronic certificate attesting to the renewable origin of energy. Each GO corresponds to 1 MWh, and no more than one can be issued for each unit of energy: the same renewable energy is counted only once.

The legislation gives them a single purpose: to show end customers how much energy from renewable sources is in a supplier’s mix, or in the energy sold under a “renewable” contract. The certificate can be transferred together with the energy or on its own.

The basis is European: Article 19 of Directive (EU) 2018/2001 on renewable sources. Italy transposed it with Legislative Decree 199 of 2021, in Article 46. The details are in Ministerial Decree no. 224 of 14 July 2023 of the Ministry of the Environment and Energy Security (MASE), which set up the national GO registry at the GSE, Italy’s energy services operator.

Who issues them, when, and when they expire

They are issued by the GSE, only for plants that hold the IGO qualification, that is, the plant’s qualification for guarantees of origin. The producer applies to the GSE for it online; it lasts five years, unless the plant undergoes significant changes. To receive, transfer and cancel GOs you need an ownership account with the GSE.

Issuance is monthly: the GSE acquires the metering data for the energy produced and fed in, validates it and makes it available on the Certigy platform; the producer requests issuance and, if the check is successful, the GOs arrive in the ownership account.

A GO can be transferred for 12 months from the production of the energy. After that, the holder can only cancel it, within the following six months and in any case no later than 31 March of the second year after the year of production. For producers, therefore, the time to sell it is 12 months.

Where they are sold

GOs are traded on the venues of the GME, Italy’s energy markets operator:

• the GO market (M-GO), where the GME acts as central counterparty and guarantees that transactions are completed;
• the bilateral trade registration platform (PB-GO): anyone selling under a direct contract, outside the market, must register the quantity and price there;
• the GO board, where sellers and buyers publish anonymous, non-binding listings for long-term contracts.

Who buys them, and why

They are bought by electricity supply companies. Every year these must tell end customers what mix of sources was used to produce the energy supplied the previous year: this is the “fuel mix disclosure”. And those who sell energy as renewable prove it with GOs: by 31 March of the year after the year of supply, every supply company must cancel GOs equal to the energy it sold as renewable.

They can also be cancelled by withdrawal dispatching users, energy-intensive companies and those who buy energy under a long-term purchase agreement (PPA).

If the plant receives incentives, the GOs go to the GSE

GOs do not always stay with the producer. They are issued and transferred immediately to the GSE, without payment, when the plant:

• sells its energy through the GSE dedicated withdrawal scheme;
• is under net metering (scambio sul posto);
• receives incentives under a mechanism in which the GSE withdraws the energy;
• receives an incentive, among those created by Legislative Decree 199 of 2021, that does not take account of the market value of the GOs.

In these cases the GSE allocates the GOs through competitive procedures: the GO auctions. In the other cases the GO is issued to the producer.

What EKA does for guarantees of origin

In our experience many buyers only deal in large blocks, and the GO market is volatile: an attractive price may not last long. That is why we collect offers from buyers by pooling the volumes of several producers, coordinate the transfers and check receipt and payment, with a full signing mandate, as part of the service for producers. You, or your technician, apply to the GSE for the IGO qualification: on GSE procedures, for now, we do not provide professional assistance.