green energy

A better understanding of the green revolution

Depending on the times and their origins, ecological projects and movements have been numerous and diverse.

In France, the environmental movement was born in the 1970s. It aims at conserving nature and "respecting" the natural balance.

Entering the economy

Green thinking appeared in developed countries in the 1970s (in the United States especially) - with the idea of creating a green economy that would save the planet.

The "ecology first" approach - a unique solution to any natural and financial issues - began as early as the financial crisis from 2008.

Today, the green economy is far from being a niche market dedicated to small Greentech companies. According to the index provider FTSE, 6% of the global capitalization of listed companies would even be devoted to it.

Entering the market

“Green finance" is a concept defining financial actions and operations that promote the energy transition and the fight against global warming.

🌱 It consists in favouring responsible investment (RI); adding environmental, social and governance (ESG) criteria to those of a purely financial nature.

🌱 Even though it certainly grows exponentially, the green finance needs to be monitored and promoted by the States.

🌱 Among the many instruments of green finance are green bonds and the pollution rights market.

photography of the sky from the clouds

Carbon Market

The carbon market is a pollution control instrument that consists of a trading system for CO2 emission allowances, or “rights to pollute” issued to companies.

The carbon market is listed on several exchanges and therefore follows the rules applicable to a listed market.

Carbon inventory and footprint

In accordance with the United Nations Framework Convention on Climate Change (UNFCCC), the European Union and its Member States are required to submit their greenhouse gas emissions to the UN on an annual basis.

These inventories are performed by applying the methodological principles defined by the Intergovernmental Panel on Climate Change (IPCC).

This “inventory” approach focuses on so-called territorial emissions, i.e., emissions taking place on national territory.

It differs from another approach, that of the “carbon footprint” of a given territory. The latter includes all emissions caused by the consumption of products, whether manufactured in this territory or abroad.

However, various methodological elements may vary depending on the organization.

red pipeline wired in the fog

Natural Gas Market

Natural gas is a gaseous mixture that occurs naturally in gas fields or in certain porous rocks (shale gas), unlike LPG (butane, propane) which is produced by refining.
Over the past decade, the natural gas market has opened to deregulation and has become a fully-fledged market driven by supply and demand. Prices are quoted on exchanges either continuously or from Monday to Friday for the futures market (operating from hubs). Natural gas is transported by pipeline or by ship (LNG - liquefied natural gas).
The gas market has started to go green.

Diagram showing the different aspects of the natural gas market

Electricity Market

Just like other commodity markets, the European electricity markets are deregulated. Prices are quoted on exchanges either continuously or from Monday to Friday for the futures market.

Weather conditions, the rise of renewables, changes in demand behaviour, such as during the COVID 19 crisis, and geopolitical problems all generate volatility.

By creating portfolios with different maturities and a flexible pricing, Indar New Energies provides you with tools to manage both market volatility and risks.

Electricity is generated from several basic sources: nuclear, natural gas, coal, fuel oil, and renewables - all of them impacting the prices.

Diagram presenting the different aspects of the electricity market

European Energy Certificate System

seated man signing documents

A guarantee of origin (GO) represents the generation of one Megawatt hour of electricity produced during a specific period. The certificate contains all the relevant information concerning the unit of production (the unit construction date, its size, if it is subsidized), the source (wind, solar, hydro, biogas) and the quality (mainly through the use of labels such as naturmade STAR, Ekonergie, OK Power, Tüv, Der blaue Engel, Milieukeur, Bra Miljöval, Green-e, Greenpower, etc.) in order to identify the environmental value of the renewable energy generated.

Once in the grid, renewable energy is impossible to segregate from the conventionally generated energy. This makes purchasing of a GO equal to purchasing a claim, that the certificate owner consumed energy from the renewable portion of the whole energy in the grid. The certificates can be traded separately from the energy produced.

The certificates are issued and registered on national registries in order to track all commercial deals. The valorization is done by market actors on EEX or during over-the-counter (OTC) market transactions.

Different mechanisms exist worldwide to support green electricity generation and to track the source used by companies: guarantee of origin for Europe, Renewable Electricity Certificates, - RECs in North America, and International Renewable Electricity Certificates, I- RECs in a growing number of countries in Asia, Africa and South America.

AIB logo (association of issuing bodies)

Le but de l'AIB est de développer, d'utiliser et de promouvoir un système normalisé européen de certificats énergétiques - "EECS".

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