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Oslo company's products enable buyers to say they caused a renewable project to be built

Buying renewable energy certificates (RECs) or their European equivalents, guarantees of origin (GOs), doesn’t guarantee additionality i.e., that the purchases contribute to the construction of a clean-energy project that otherwise wouldn’t get built.

A Norwegian company whose managing director I spoke with last week has created two products that use the guarantee of additionality as a selling point. The company is Oslo-based ECOHZ, whose name is a combination of the preface “eco” and the symbol for hertz and is pronounced ek-KOSE. The products are called GO2s because they allow buyers to both purchase GOs and provide, individually or with others, the financing that allows a renewable project in Europe to get built.

The projects that GO2s help finance are identified by the ECOHZ Renewable Energy Foundation, which is chaired by ECOHZ’s managing director, Tom Lindberg. The developers of the projects must have at least 85 percent of the financing for them and be able to start building them when they get the rest of the financing.

Money from the sale of the GO2s goes to buying GOs and to the foundation, which uses it to provide financing to the projects the GO2s are helping to build. GO2 Signatures allow buyers to provide the financing for a project by themselves. GO2 Uniteds allow multiple companies to contribute to the financing for a project.

I got some of the details about GO2s in a Skype conversation last Friday with Lindberg, who had just returned to Oslo from the World Future Energy Summit, which was held in Abu Dhabi last week. I wanted to talk to Lindberg to see how the Trump administration and the energy policies it’s likely to implement are being perceived by people in the clean-energy industry outside the U.S. While looking at ECOHZ’s website, however, I came across the GO2s, and thought they were interesting enough to merit a long mention.

As their name suggests, they’re only marketed in Europe and Lindberg said they’re both relatively new and a niche product for ECOHZ. Still, something like them could have potential as at least a limited financing source for renewable projects in the United States because it would give companies and other organizations another way besides buying RECs to promote their green-mindedness. As a white paper by Boulder, Colo.-based Renewable Choice Energy points out, in the U.S., power buyers looking to obtain additionality are pretty much limited to signing the power purchase agreement or providing the equity investment that enables a renewable project to be built.

ECOHZ works directly with the European operations of giant multinational corporations. Its customers include Unilever, the British and Dutch consumer goods maker, and Swedish clothing retailer H&M, which was involved in the first GO2 project, a small wind farm that is slated to come online in Sweden in March.

ECOHZ works with U.S. companies through Natural Capital Partners, a London and New York company that is still a leader in its original focus of helping organizations reduce and/or offset their carbon emissions, but has expanded into other areas, including renewables.

The growing demand among corporations for renewable power and reduced carbon emissions is something Lindberg sees continuing regardless of the Trump Administration’s energy positions. He wrote a blog about it in December called “The corporate renewable tsunami,” in which he predicts that leading corporations “will challenge, push and kick local energy providers and governments until they can deliver on their renewable pledge.”

That trend is one reason Lindberg thinks the amount a President Trump can set back renewable power efforts in the U.S. is limited. Others are the renewable efforts of states such as California, and the fact that subsidies for wind and solar power have caused prices to fall so much that those generation sources are becoming competitive on their own.

The most harm Trump could do by moving away from policies that favor renewables is slow the progress of makers of renewable power equipment in the U.S., Lindberg said. The beneficiaries of that slowdown, he thinks, would be Chinese companies that can keep moving forward thanks to massive renewable projects in their home country.

“I think the Chinese are just laughing their heads off saying, ‘We just gained four years on the U.S. renewable industry,’” he said.

 

 

 

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