How the system works
The New Zealand Energy Certificate System (NZECS) enables consumers to purchase certificates from specific generation facilities. The system does not change the electrons that are supplied to you via the national grid.
Key aspects of operation
1. All electricity (renewable or otherwise) is fed into the national grid. Via the thousands of kilometres of transmission and distribution lines, this electricity is supplied to the nation's electricity consumers.
2. Once electricity enters the national grid, it becomes impossible to track. This means that no consumer can know for certain where the electricity they use has originated.
3. The NZECS enables generators of electricity to issue a 'certificate' for every unit of power they produce. This certificate contains information on how and when the energy was generated, and from where. This information is referred to as a 'generation attribute'.
4. NZECS certificates can be traded and transferred from electricity generators to electricity retailers, who can ultimately sell these certificates to energy consumers. Through the purchase of a certificate, a consumer 'reserves' that unit of generation as their own.
5. By purchasing generation certificates from renewable energy facilities, and matching them to their consumption via a process called 'redemption', a consumer can make clear statements about the type of electricity that they support..
6. By tracking all of these statements, we can make sure that each unit of energy is only counted once, and that no one is making false claims.
7. Finally, by tracking the flow of certificates, we can accurately adjust the attributes of the remaining supply to ensure that everyone gets a clear picture of the nature of the energy that they are purchasing. As more and more consumers purchase certified energy, the 'residual supply' becomes less and less renewable, incentivising further behavioural change.
Read more about the residual supply mix here.