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AIB's stamp of approval to Lithuania and Latvia

Wednesday, 17 February 2021

The Association of Issuing Bodies (AIB) announced yesterday (16 February 2021) that the issuing authorities in Latvia and Lithuania have now been granted the right to export Guarantees of Origin (GOs) over the AIB hub. 

In a statement released yesterday (16 February 2021) the AIB announced that Litgrid AB (Lithuania) and Augstsprieguma tīkls AS (Latvia) are now able to export GOs over the AIB hub. The AIB further noted that "both members had been granted an import-only membership pending adaptations to their national disclosure legislation."

In Lithuania's case, their right to issue and export GOs was withheld due to the presence of section C5.2 of their Electricity Domain Protocol  which stated:

Lithuanian legislation has a deviation from EECS RULES sections A2.1.2, C3.3.1 and E3.3.14, it does not yet foresee in the avoidance of double disclosure of GOs issued for production in Lithuania.

This meant that in order for Lithuania to be granted their export status this deviation needed to be lifted. 

Furthermore, the AIB announced that GOs issued in both Latvia and Lithuania can now be called EECs GOs "for production from 1 December 2020 in Latvia and 1 January 2021 in Lithuania."  This means that current members within the AIB have expanded to 30 members for electricity GOs spanning from all over the EU and EFTA. 

What does this mean for the GO market?

Greenfact's latest breakdown of AIB GO statistics shows that there has been an oversupply of GOs in the market which has also contributed to bearish GO market prices. 

It could be assumed this new export stamp of approval to Lithuania and Latvia could potentially translate into even further oversupply in the GO market especially with the AIB being in talks with other remaining European countries to join the hub that could be supply focused. Further oversupply in the market could lead to increased downward pressure on already low GO prices. 

Lithuania and Latvia are net energy importers with net imports in 2019 of 9.4 TWh and 1.1 TWh and both countries being small energy producers with outputs of 3 TWh and 6.2 TWh respectively. In 2019, Lithuania had a 76% and 60%  renewable share in its residual production and supply mixes respectively while Latvia had a 50% and 48% share from renewable sources in its residual production and supply mixes. 

According to recent 2020 AIB stats Lithuania cancelled 1.3 TWh of renewable GOs mostly originating from biomass and hydropower which translates to a 0.2% share of the total renewable GOs issued in 2020.