The UK government has begun a consultation on the removal of scheme cost exemptions for green imported electricity and the recognition of EU Guarantees of Origin (GoOs).
The government has considered three options in review of the green import exemptions.
Option one is to retain the green import exemptions in their current form.
Option two is to extend the green import exemptions to all international trading partners.
Option three, which is the preferred option, is to repeal the green import exemptions ensuring scheme costs are equally distributed across suppliers.
The government said option three is the most straightforward option and would ensure a fair opportunity for all potential trading partners.
The government’s consultation document said: “It would simplify the operation of the Supplier Obligation and the levelisation process and restore a level playing between all GB suppliers, in that each supplier’s contribution to CfD and FIT costs would match more closely their market share of GB electricity sales, thereby removing market distortions and red tape.”
The EU has not recognised UK REGOs since 1 January 2021.
As a result, there is currently an asymmetry, whereby the UK recognises GoOs issued in the EU, while the EU no longer recognises REGOs issued in the UK.
To remedy this lack of reciprocity, the UK government intends to cease the recognition of EU GoOs through legislation so that, longer term, domestic recognition of GoOs issued in EU countries will take place only on a reciprocal basis.
Law firm Ashurst energy partner Antony Skinner said: “The government has said that going forward domestic recognition of GoOs issued in EU countries will take place only on a reciprocal basis.
“It is hoped that such reciprocal arrangements can be developed to facilitate trade in renewable electricity between the UK and the EU, particularly given that current focus on boosting investment in renewables in both the UK and the EU to ensure energy security.”