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System design

The New Zealand Energy Certificate System (NZECS) is built with consideration of principles outlined in international greenhouse gas reporting standards. How the NZECS relates to each of these principles is explained below.

1. Certificates convey generation attributes.

The NZECS certification process clearly communicates the volume of GHG emissions associated with the generation of certified electricity. The relevant emissions rates for each unit certified are determined as part of the generation facility audit process, in conjunction with the generator.

In addition to GHG emissions rate attributes, the NZECS certification process captures all attributes - including location, technology type, age of facility, etc. It is intended that no attribute shall be separated out and claimed separately.

2. Uniqueness of claims.

One of the primary purposes of certification is to reduce the occurrence of double-counting - when one unit (or attribute) of generation is counted twice by two consumers of electricity. All generators issuing certificates within the NZECS have sole authority over generation attributes  from registered facilities, and declare at the outset any alternative accreditation for which the facility is registered. 

This allows assurance that all claims being made through use of the NZECS are not also being made in other systems.

3. Retirement of certificates when claimed

The NZECS redeems all certificates once purchased by a consumer, removing them from circulation. This process is performed within the NZECS registry, managed by the relevant supplier of certificates and reviewed by the NZECS.

4. Vintage

All certification is time-bound to a particular production year (1 April to 31 March). At the end of the year, all issued certificates must either be redeemed or cancelled and removed from circulation, ensuring no carry-through into the next year. This means that all certified generation will have occurred within the same production year as consumption to which it is matched. Development in this area will be carefully addressed in consultation with key user groups.

5. Market boundaries

All certificates recognised by the NZECS originate from electricity generation facilities operating in New Zealand.

6. Residual supply mix

An adjusted 'residual supply' mix is calculated to provide guidance on the characteristics of uncertified electricity. This supply mix is created by gathering data on national total generated electricity, and removing volumes explicitly certified. 

The NZECS performs this process yearly and will make this residual supply mix available for all users of the electricity system.