French GOs now extended to cover non-renewable sources

Section 5 extends the right to issue GOs from the current selection of solar, wind, hydro, geothermal and biomass (mostly biogas) to all other primary energy sources, including nuclear.

Non-renewable GOs will need to specify: 1) energy source from which the electricity was produced, 2) the overall efficiency of the installation, 3) the quantity of GHG directly emitted by the electricity produced, and for nuclear GOs 4) the quantity of radioactive waste emitted.

EEX, as a member of the AIB, will henceforth 

allow the import and export of non-renewable GOs through the AIB hub

Competent body in charge of the GO registry

Sub-section 2 amends the French Energy Code by replacing the ‘administrative authority’ with the ‘Ministry in charge of the Energy’ which is responsible for designating the competent body, after a competition process and for a period of five years. Furthermore, it includes provisions for the Minister to impose financial penalties or terminate the organisation’s mission if it fails to fulfil its regulatory obligations.

EEX is already the issuing body for power GOs In France, mainly in charge of auctions. Since October 2023, EEX has also been operating the French registry for biogas GOs and is currently preparing for cleared biogas auctions, scheduled for 2024.

Rules for GOs auctions are being clarified within sub-section 1. It is now specified that the creation of a state account on the national register of GOs should occur within a defined timeline for registering eligible installations (one or two months after notification, without any costs for the producer). The producer can also create their own account at their expense.

In terms of data submission by installations, new requirements are being enforced. All installations auctioning GOs must have an automated collecting system available for the network manager.

GOs for energy collectives will be cancelled immediately and cannot be sold. The municipality (or group) should specify five days before the auction starts the amount of GOs it wants to buy. Volumes sold in such a way can be limited.

Note, pursuant to Article L 314-14 of the Energy Code, GOs cannot be issued by a renewable energy producer having concluded a feed-in tariff (FIT) or a Contract for Difference (CfD) with EDF. In fact, the producer should first terminate their contract and then reimburse the additional remuneration as part of the CfD or FIT.

Our earlier analysis provided an overview of potential impact of

. On the supply side, EDF plans to sell GOs from its power nuclear fleet: if all its output were to be issued with GOs, this could potentially flood the market with 279 TWh volume of cheap nuclear GOs (based on 2022 generation output data). Yet, it is worth mentioning that EDF is assessing the volume of nuclear GOs it would sell “

without flooding the market and drastically lowering prices

”. Currently, these are trading around 0.6 EUR/MWh mark for current year compared to the closing price of a Nordic Hydro 2023 vintage of 4 EUR/MWh (as of 10 November 2023). As it stands, the market for nuclear GOs is already oversupplied. The prospect of French nuclear GOs coming onto the market could further dampen the price level and also affect prices of renewable GOs to the degree end-users are concerned with GHG accounting rather than the renewable attributes. 

Timewise, there is no certainty as to when EDF would open the gates for nuclear GOs to the market; however, EDF’s willingness to start offering nuclear PPAs with duration of 10-15 years might serve as an indication. 

Up to 20 TWh/year could be supplied to energy-intensive companies via PPAs

, representing 5% of the nation’s total demand. The utility is reportedly already in talks with some of the companies with no mention of the prices.

We expect a growing demand for nuclear GOs on the back of legislative context that steers the market towards making environmental claims from a life-cycle emissions perspective. Specifically, the

 Green Claims Directive incentivises Environmental Footprint methods

 that measure and communicate the environmental performance of products and organisations across their whole lifecycle emissions. Since nuclear energy has one of the lowest life-cycle emissions (0 tCO2/MWh), this ought to push the market towards nuclear GOs, giving us a bullish outlook on the demand side.

The EU’s corporate sustainability framework could further add to this sentiment: under the Corporate Sustainability Due Diligence (CSDDD) and the Corporate Sustainability Reporting Directives (CSRD), companies are expected to adopt and publish their decarbonisation plans in line with the Paris Agreement goals. This could exert additional pressure on the demand curve for nuclear GOs.

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Our community offers access to webinars, discussions and updates from industry leading experts and analysts. 

French decree N 2023 – 1048 relating to electricity GOs

 entered into force on 19 November 2023, after a public consultation in June 2023. The decree modifies the terms and conditions for auctioning supported RES-E GO and responsibilities of a competent body designated to ensure the issuance, transfer and cancellation of GOs. It also extends GOs to non-renewable sources, thus enabling nuclear GOs and specifies the rules applicable to GOs for self-consumed electricity benefiting from support mechanisms.

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French decree extends GOs to non-renewable sources, nuclear GOs to hit the market

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