ADEME launches VertVolt, an anti-ambiguity label on "green" electricity

Olivier ABULI, advice and analyses consultant

October 26, 2021

With an obvious wink, it is on Friday 22 October, World Energy Day, that the French Agency for Ecological Transition (Ademe) has chosen to present a new demanding label dedicated to renewable electricity supply offers: VertVolt.

With this label, Ademe intends to challenge suppliers and consumers by pursuing two complementary objectives
- to provide consumers with real transparency on the geographical origin and production method of their electricity
- to help accelerate the development of renewable energies in France and, by domino effect, in the European Union.

The technical constraints of a permanent adjustment of supply to needs
As a fluid, electricity can only be stored to a limited extent and very temporarily. The volumes injected into the distribution network are therefore constantly adjusted to demand by integrating the specificities of the different production sources. The production capacities of renewable energy units, whose share should cover 40% of the needs in 2030, are for example subject to variations according to seasonality and weather conditions. In the end, the existence of energy units which can be piloted (for instance nuclear or gas-fired plants) together with interconnection of the European grids that allows frequent cross-border electricity exchanges to optimize the regulation and security of supply.

The complex traceability of the origin of the electricity supplied to the end customer
It is therefore not materially possible, with rare exceptions, to determine the source and origin of the electricity supplied to a given delivery point. This can raise legitimate questions about offers that include a quantified percentage of "green" electricity. How tangible is this? Of course, a Guarantee of Origin allows eligible sites to issue European certificates proportional to their volume of activity. These certificates attest to the production of renewable energy, which is injected into the grid by the installation for distribution.
But by whom was it consumed; where, how and in what form was it marketed?
This is where there is a grey area in the value chain that can lead to confusion. The sale of "green" electricity is decoupled from the sale of the certificates to which it gives access.
Indeed, each European renewable energy producer can now sell all or part of the guarantee of origin certificates it holds separately, in all EU countries.
This system allows suppliers to buy on the wholesale market, where the electricity on offer is essentially nuclear and fossil fuel-based, and then to acquire the necessary certificates at a lower cost to justify the "sustainable" part of the offers they market.
The French example illustrates a mechanism that is at odds with current transition policies. In 2018, 49% of our guarantee of origin certificates were resold in a third country. Yet our production of "green" electricity now covers 20% of needs. But the fact remains. To date, only 11% of French consumers have signed a voluntary contract to supply renewable energy.

VertVolt, a label to change the paradigm
The logic behind VertVolt is to push suppliers to pay French "green" electricity producers to accelerate the energy transition.
The base of the label thus privileges the joint purchase of the energy and the Guarantees of Origin which are associated to it. In case of different origins, both components must come from the same region and the same technology. Particular emphasis is also placed on the efforts made to encourage and support the control of energy consumption.
These elements constitute level 1 of the label, which corresponds to a "committed choice".
Level 2 goes beyond this to support the development of new production units. It will be awarded to suppliers able to prove that 25% of the "green" electricity they supply comes from recent installations that do not benefit from public support or that are subject to shared governance (such as citizen projects). This "premium" level is described as a "very committed choice".

Finally, it should be noted that if a supplier does not use any electricity from nuclear sources, it may mention this on its certified offer. ("solutions to decarbonize-(re)localize-digitize")