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Addressing residual supply

A primary role of certification is to take a system-wide view of all electricity claims that are being made. This involves using certificates as the vehicle for all transfer of attributes, and using the residual supply calculation as a method to avoid any double-counting.

Addressing residual supply requires introduction of the concepts of explicit and implicit certification. Any time an energy user actively seeks to purchase a volume of certificates, this certification is explicit. Implicit certification then is the allocation of the remaining generation volume to the remaining energy users who did not take action.

Naturally, as explicit certification seeks out the premium value, the characteristics of the residual supply mix become worse over time. In this case, as explicit certification will generally relate to renewable electricity, the residual supply mix will become increasingly carbon intensive as more users begin to actively participate in the system. This can, in time, incentivise development of more premium generation.

Below is a simplified diagram depicting the process of reaching the residual supply mix.

Uncertified generation naturally comprises a greater proportion of non-premium electricity generation.

As a default, network losses are allocated the residual supply mix factor, unless a consumer actively redeems additional certificates to match their own attributed losses. 

The calculated residual supply will be published here at the end of the 2019/20 production year.