Green electricity · Glossary

Green electricity is electricity that is allocated to a customer, a tariff or a company as electricity from renewable energies. It usually refers to electricity from wind, solar, hydropower, biomass or geothermal energy. The term does not describe a physical property of the electricity at the socket. It describes an allocation in accounting, in the contract and via certificates. Green electricity is not a legal term. The same applies to the word "Ökostrom" (eco-electricity), which is often used synonymously: in Germany there is no statutory definition for it.

In the grid, electricity is not separated by origin. Once it has been fed in, it technically mixes with all other feed-in. One can picture it as a lake: an inflow of rainwater cannot be directed specifically to a particular shore. However, one can record precisely who has fed in how much rainwater. A household with a green electricity tariff therefore physically receives the same electricity as its neighbour with a conventional tariff. What differs are the supplier's procurement, labelling and certificates. Nor does green electricity automatically mean that consumption in the same hour was covered by a renewable plant.

Guarantees of origin

The central instrument is the guarantee of origin (GO). Under EU Directive (EU) 2018/2001 (RED), it is an electronic document. Its sole purpose is to prove to a final customer that a certain share or quantity of energy was produced from renewable sources. By default, one certificate applies to 1 MWh. In the consolidated version of 2023, it can also be divided into smaller units, provided they are multiples of 1 Wh. At most one certificate may be issued for each unit of energy produced. For transactions, a GO is valid for twelve months from production. Certificates that have not been cancelled expire at the latest after 18 months. A GO states, among other things, the energy source, production period, location, type, capacity and commissioning date of the plant.

In Germany, the Federal Environment Agency (Umweltbundesamt) issues, transfers and cancels the certificates in its guarantee-of-origin register. The EEG likewise provides that a guarantee of origin is issued for a quantity of electricity of one megawatt hour that has been generated and supplied to final consumers. Certificates from other countries can be recognised. Only upon cancellation may a supplier assign the renewable attribute to a customer or product. The register thus prevents the same megawatt hour from being sold several times. However, the certificates separate physical delivery from the attribute "renewable". A supplier may therefore buy electricity on the wholesale market and additionally acquire GOs, for example from Scandinavian hydropower. This is permissible, but says little about the procurement strategy or about whether new plants are being built.

Electricity labelling in Germany

Under § 42 EnWG, electricity suppliers must state on invoices, in advertising material and on their website which energy sources their overall mix comes from. The statutory categories are nuclear power, coal, natural gas and other fossil energy sources, tenant electricity (Mieterstrom) supported under the EEG, and renewable energies with a guarantee of origin that are not supported under the EEG. The relevant period is the last or the second-to-last year. From 1 July of a year, the previous year's values must be stated. In addition, information on CO2 emissions and radioactive waste is required. If a supplier offers different products, for example an eco tariff and a standard tariff, each product needs its own electricity label. In addition, the share of renewable energies supported under the EEG must be shown. The Federal Environment Agency checks the renewable information, and the Federal Network Agency (Bundesnetzagentur) receives the reports. § 42 EnWG was last amended with effect from 23 December 2025.

Electricity labelling answers a specific question: which renewable attribute was assigned to a supplied annual quantity? It does not answer whether consumption was covered by renewable generation at the same time or whether new plants were built. Electricity without cancelled certificates is represented in the accounts via the residual mix. The RED calls it the residual energy mix: the annual energy mix of a Member State excluding the quantities already allocated through cancelled guarantees of origin.

EEG support and the ban on double marketing

An important limit applies in Germany. Anyone who receives a payment under § 19 or § 50 EEG 2023 for their electricity, that is, mainly the market premium or the feed-in tariff, may not pass on guarantees of origin or other evidence of origin for it. Conversely, if an operator passes on certificates, the entitlement to payment for that electricity lapses. In addition, renewable electricity may in principle not be sold more than once. This is intended to prevent state-supported generation from additionally being sold as exclusive green electricity. The EU Directive expressly allows Member States not to issue certificates for supported generation.

Regional certificates under § 79a EEG are exempt. They allow suppliers to show, for the EEG-supported share in the electricity label, the extent to which this electricity comes from the consumers' region. This is not a freely tradable green electricity certificate. In practice this means: a large part of the renewable electricity generated in Germany appears in the label as "supported under the EEG". Many eco tariffs are therefore backed with certificates from non-supported plants, often from abroad.

Distinction from renewable electricity, eco-electricity and the electricity mix

Renewable electricity is electricity physically generated from renewable sources. Green electricity is the marketed form of this attribute, or the form allocated in accounting. A wind turbine generates renewable electricity. A supplier sells green electricity when it proves this attribute and assigns it to a customer. In practice, "Ökostrom" often implies additional quality criteria, such as a contribution to funding new plants or an age limit for the plants. Because the term is not legally defined, such criteria arise only from tariff terms and quality labels.

The electricity mix describes how total generation or supply in a balancing area is composed over a period. Green electricity tariffs, by contrast, assign renewable attributes to individual customers. The physical generation mix changes only if this gives rise to additional demand, long-term contracts or investment. Accounting alone does not build a plant.

Additionality, PPAs and temporal matching

A tariff can be correctly backed by guarantees of origin and still trigger hardly any new investment. This applies especially if cheap certificates come from old, fully depreciated plants that would keep running even without the tariff. Additionality asks whether an action brings about renewable generation that would not otherwise have come about, or only later. This question contains a counterfactual: what would have happened without the contract? Additionality is therefore harder to demonstrate than the mere origin of a quantity of electricity.

Power purchase agreements, PPAs for short, can have a different quality than the mere purchase of certificates. Here, a buyer commits to taking electricity from a specific plant over many years. This can create financing certainty. However, even a PPA is not automatically additional. What matters are the term, the allocation of price risk, the age and support status of the plant, and the question of whether the contract actually influenced the investment decision.

Temporal allocation also plays a role. An annual balance can show that, arithmetically, as much renewable electricity was procured as was consumed. A data centre can thus be accounted as fully green over the year and still draw electricity from the general mix on low-wind evenings. The consolidated RED provides that certificates for renewable electricity can be related to the imbalance settlement period, that is, to short time intervals instead of the whole year. The higher the share of renewable energies, the more important load profiles, storage, flexible demand and time-matched procurement become.

Limits in the power system and on price

Green electricity makes demand for renewable attributes visible. However, it must not be confused with security of supply and grid operation. The grid must balance generation and consumption at every moment, regardless of which tariff a customer has. Frequency control, redispatch and grid reserve operate independently of whether an annual quantity is labelled as green. Consumption accounted as green also uses the same grids and balancing mechanisms as any other consumption. A system with a lot of renewable generation additionally needs grid expansion, storage, controllable loads and firm capacity.

Green electricity is also not inherently more expensive or cheaper than other electricity. The end-customer price is made up of procurement, grid charges, taxes, levies, sales costs and risk premiums. What a guarantee of origin costs depends on technology, country of origin, plant age and market conditions. A low premium can indicate certificates from existing plants. A higher price can finance additional services, but does not have to. Only tariff terms, label criteria and contract structure are informative.

Anyone speaking precisely about green electricity distinguishes four things: renewable generation, accounting allocation, temporal matching and additional build-out. The term is useful when it makes questions of certification and procurement visible. It becomes imprecise when electricity flows, climate impact, investment impetus and security of supply are lumped together under a single label.

Sources

Energiewirtschaftsgesetz (EnWG) § 42 Stromkennzeichnung, Transparenz der Stromrechnungen, Verordnungsermächtigung — Bundesministerium der Justiz / gesetze-im-internet.de; unbekannt (Fassung nach Änderung mit Wirkung vom 23.12.2025). § 42 Abs. 1 Nr. 1 und 2, Abs. 3, Abs. 5, Abs. 7
EEG 2023 § 80 Doppelvermarktungsverbot — NWB Verlag (Gesetzestext EEG 2023); unbekannt. § 80 Abs. 1 und Abs. 2
Erneuerbare-Energien-Gesetz (EEG 2023) — Bundesministerium der Justiz / gesetze-im-internet.de; unbekannt. § 79 Abs. 3 und 5, § 79a
Richtlinie (EU) 2018/2001 zur Förderung der Nutzung von Energie aus erneuerbaren Quellen, konsolidierte Fassung — Amt für Veröffentlichungen der EU / EUR-Lex; 2023-11-20 (konsolidierte Fassung). Art. 2 Nr. 12 und 13, Art. 19 Abs. 2, 3 und 7
Marktanalyse Ökostrom – Endbericht (UBA-Texte 04/2014) — Umweltbundesamt; 2014. Begriffsbestimmung Ökostrom; Abschnitt zum Herkunftsnachweisregister

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Edited by eCMS on 12.11.2026 05:05