Flanders: Quota system (Groenestroomcertificaten)
Updated: 08.02.2019
Author: Stijn Anciaux
The region of Flanders uses a quota system and a certificate trading scheme to support renewable energy (Article 7.1.10 in conjunction with Article 7.1.1, Article 7.1.5 § 1 2° Energy Decree). In general, all renewable energy generation technologies are eligible for the quota system (Article 7.1.1 in conjunction with Article 7.1.3 Energy Decree, Article 6.1.16 Energy Regulation). The green electricity certificates are issued by the Flemish Regulator of the Electricity and Gas Market (VREG). The amount of electricity to be produced for one certificate varies across technologies and is based on a technology-specific banding factor. This so-called banding factor accounts for the specific technology costs and efficiencies for amortisation. Thus, one certificate is not necessarily equal to 1 MWh. The grid operators are obliged to meet their quota obligations, i.e. present green certificates for the quota defined by law, every year by 31 March (Article 7.1.10 §1 in conjunction with Article 7.1.5 § 1 2° Energy Decree).
Eligible technologies
In general, Flanders supports all renewable energy generation technologies (Article 7.1.1. in conjunction with Article 7.1.3 Energy Decree, Article 6.1.16 Energy Regulation). Green certificates for plants generating more than 200 kWh of electricity from renewable sources can only be issued if an inspection report of the installation is submitted to the Flemish Energy Agency (Article 6.1.4 Energy Regulation). Small installations with a capacity lower than 10kW are no longer eligible for green certificates.
Wind energy | Eligible (Article 6.1.16 §1 2° Energy Regulation). The certificates for offshore wind energy are issued by the Federal Authority for the Regulation of Electricity and Gas (CREG). |
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Solar energy | PV installations are eligible (Article 6.1.16 § 1 1° Energy Regulation). |
Geothermal energy | Eligible (Article 6.1.16 § 1 5° Energy Regulation). |
Biogas | Both biogas from biological fermentation of organic substances in fermentation plants (Article 6.1.16 § 1 6° a) Energy Regulation) and landfills (Article 6.1.16 § 1 6° b) Energy Regulation) are eligible. Moreover, biogas from liquid biomass has to fulfil sustainability criteria. |
Hydro-power | Plants are eligible if their capacity is less than 10 MW (Article 6.1.16 § 1 3° Energy Regulation). |
Biomass | Eligible (Article 6.1.16 § 1 7° Energy Regulation). |
Amount
Amount of quota and period of application | The quota is calculated according to a formula set by law (Article 7.1.10 § 2 Energy Decree) The factor “Gr” is determined by law. It is equal to:
Since 31 March 2017, the factor Ev is decreased for intensive industries (Art. 7.1.10. §3 Energy Decree):
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Adjustment of quotas | According to current legislation, the quota obligation will be in force until 2021 (Article 7.1.5 §4 Energy Decree). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of certificates according to technology | The green electricity certificates are issued by the Flemish Regulator of the Electricity and Gas market (VREG). The amount of electricity to be produced for one certificate is calculated by multiplying 1 MWh with the corresponding banding factor of the respective technology (Article 7.1.4. §1 Energy Decree). The banding factor is technology specific and represents the ratio between the “onrendabele top” (amount of € necessary per MWh for amortisation) and “banding denominator” (fixed to € 97). The banding factor is communicated by the Flemish Energy Agency (VEA) to the Flemish government and the Minister of Energy before 30 June each year (Art. 7.1.4/1. §1 Energy Decree). Amount of kWh per 1 GSC for installations erected after 01.08.2018 Photovoltaic energy:
( ) : Amount of kWh per 1 GSC Onshore wind:
Biogas: fermentation of manure and / or agriculture related products:
vegetable, fruit and garden waste:
recovery of landfill gas:
fermentation of sewage water treatment:
other:
Biomass: Biomass (liquid and solid):
Biomass (households and commercial):
Waste based on biomass:
Project developers have to contact the Flemish Energy Agency (VEA) if they want to add a representative project category to the above list (Art. 6.2/1.2.Energy Regulation). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum price per certificate | For installations with a start date of 1 January 2013 and later, the minimum price per certificate is € 93 (Art. 7.1.6 § 1. Energy Decree). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fees and penalty charges | Electricity suppliers that fail to meet their quota shall pay a fine of €100 for every missing certificate (Article 13.3.5 §1 1° Energy Decree). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual average certificate price | The most recent average certificate market price is from April 2017 – March 2018, when it was €89.03. |
Addressees
The entities obliged to purchase green certificates are the distribution grid operators or ELIA, the transmission grid operator, depending on whose grid a given plant is connected to. The grid operators shall meet their quota obligation as defined by law by presenting green certificates to the Flemish regulatory authority (VREG) by 31 March (Article 7.1.10 §1 in conjunction with Article 7.1.5 § 1 2 Energy Decree). ELIA has been obliged to satisfy a quota since 1 July 2003; however, its obligation only applies to plants installed less than 10 years ago. In the case of offshore wind power plants, only ELIA, the transmission grid operator, is obliged to purchase certificates. The persons benefiting from the quota system are the operators of renewable energy plants, as they may sell their green certificates to the grid operators at a guaranteed price (Article 7.1.10 in conjunction with Article 7.1.5 § 1 2° Energy Decree).
Procedure
Process flow |
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Competent authority | The Flemish Ministry of Finance, Budget and Energy defines the quota obligations and the allocation process of green certificates. The Flemish Electricity and Gas Regulator (VREG) is responsible for the award of certificates to the plant operators (Article 7.1.1 Energy Decree). Green certificates awarded for offshore wind power generation are issued by the Federal Authority for the Regulation of Electricity and Gas (CREG). |
Distribution of costs
Consumers | According to information from the Flemish Electricity and Gas Regulator (VREG), consumers bear the costs of the quota system in Flanders. |
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Distribution mechanism | Distribution grid operators buy the certificates and pass the costs to consumers via higher prices (Art. 7.1.15 Energy Decree). |