Energy Attribute Certification
In 2021, Eskom and the South African-German Energy Programme (SAGEN) funded by the Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH commissioned a study entitled “Use Cases and Regulatory Requirements for the Implementation of an Energy Attribute Certification System for Renewables and Green Hydrogen in South Africa”.
The objective of the study was to equip stakeholders in the electricity industry with insights, emphasising the necessity for an adaptable, transparent, and all-encompassing energy attribute certification (EAC) system.
EACs are a market-based mechanism for tracking and trading the green attributes of electricity, such as its renewable energy content. EAC systems can provide a number of benefits, including:
- Promoting the development of renewable energy: EACs can make renewable energy more attractive to investors by providing a new source of revenue.
- Reducing greenhouse gas emissions: EACs can help to reduce greenhouse gas emissions by encouraging the use of renewable energy and other low-carbon electricity sources.
- Improving transparency and accountability: EACs can help to improve transparency and accountability in the electricity sector by providing a way to track the environmental attributes of electricity.
The document outlines a roadmap for the implementation of an EAC system in South Africa. The roadmap includes the following steps:
- Develop a legal and regulatory framework: The first step is to develop a legal and regulatory framework for the EAC system. This will include defining the different types of EACs that will be issued and the rules for trading EACs.
- Establish an EAC registry: An EAC registry will be needed to track the issuance and trading of EACs. The registry will need to be designed to be secure and transparent.
- Develop EAC standards: EAC standards will need to be developed to specify the requirements for EACs. These standards will need to be developed in consultation with stakeholders from the electricity sector.
- Pilot the EAC system: Once the legal and regulatory framework, EAC registry, and EAC standards are in place, a pilot of the EAC system can be conducted. This will allow the system to be tested and refined before it is fully implemented.
- Fully implement the EAC system: Once the pilot is successful, the EAC system can be fully implemented. This will involve making the EAC system available to all electricity market participants.
The implementation of a national EAC system in South Africa would provide a number of benefits, including promoting the development of renewable energy, reducing greenhouse gas emissions, and improving transparency and accountability in the electricity sector. The roadmap outlined in the document provides a clear path for the implementation of an EAC system in South Africa.
In essence, the study crafted a comprehensive roadmap for guiding South Africa’s journey towards a functional EAC system. The key recommendation of the study was that an EAC system had to be embedded in the national law, that it had to be made mandatory, and that corresponding legislation had to be elaborated and adopted, including:
- inclusion of the certification scheme in the Electricity Regulation Act;
- assignment of responsibilities to supervise and control the functioning and operation of a scheme to a designated body (mostly public);
- rules governing an EAC scheme in the form of, for example, ministerial regulation; and
- the relationship between an EAC scheme, on the one side, and a public support scheme and carbon offsets, on the other.