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    2015 Annual Report


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    CertiQ B.V. 2015 Annual Report 1 Preface - The consumer in the driver’s seat 3 In this translation an attempt has been made to be as literal as possible without 2 Developments 5 jeopardising the overall continuity. 2.1 Europe 5 In the event of discrepancies or ambiguity 2.2 Market developments 5 between the original Dutch version of 2.3 Heat 5 the 2015 Annual Report of CertiQ BV and this English translation, the Dutch 3 Results 2015 7 text shall prevail. 3.1 Production 7 3.2 Consumption 8 3.3 Import, export and stock of Guarantees of Origin 10 3.4 Certification of fossil electricity 10 3.5 Operational affairs 11 3.6 Financial result 11 4 Corporate Governance 14 5 Financial statements for 2015 16 Appendix CertiQ works together with … 32 Contact details and publication details 34 (clickable table of content) 2 CertiQ 2015 Annual Report


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    1 The consumer in the driver’s seat The market for energy certificates - the so-called Guarantees of Origin - In this light, the discussion about full disclosure of all types of electricity has continued to develop significantly in 2015. One thing is becoming which took place in 2015 is relevant. Even more so, because consumers have increasingly clear: the consumer is in the “driver’s seat”. Consumers are increasingly been recognising Guarantees of Origin in their CO2-footprint. taking an increasingly active approach and set conditions for the Guaran- tees of Origin for the energy they consume. For example, the demand Guarantees of Origin are therefore not only about how, where and when for certificates for wind energy has increased sharply. Over a period of the energy is generated; the certification scheme is also about the impact two years, the demand has grown by 66% to more than 12 TWh per year. of this energy on the environment in which we live. This sheds an entirely new light on the social relevance of a Guarantee of Origin; although In total, the volume of green energy for which certificates were cancelled the use of Guarantees of Origin in carbon footprints is already widespread - has increased to 42.6 TWh in 2015, an increase of more than 12%. in particular among large energy consumers. This makes it even more Never before has so much green electricity been consumed in one year. important that we continue to work on enabling those new ways of As has been the case for a longer period of time, the supply of Dutch using Guarantees of Origin with standardised, reliable and independent Guarantees of Origin is not sufficient to meet the total demand even information. Consumers want to know the origin of their energy and though the issuance of Guarantees of Origin in the Netherlands the impact of their energy consumption on the environment in which has increased as a result of growth in wind power, the majority we live. This is already commonplace for food, clothing and other of the Guarantees of Origin used come from other countries. consumables, so why not also for energy? Looking at the import mix, we see that the origin of imported Guarantees In 2015, the European Commission started the consultation on the renewal of Origin is shifting: the large supplier Norway is losing ground compared of the European Directive for renewable energy, whereby it strongly to, in particular, Sweden and Italy. The export of Guarantees of Origin has emphasises “Consumer choice of action”. Transparency about the origin halved, a logical consequence of the large demand for Guarantees of Origin and impact on the environment of our individual energy consumption is in the Netherlands. crucial to be able to make a difference: the consumer in the driver’s seat. Another sign that the consumer is having an increasingly profound impact Ir. J. van der Lee is the increase in the number of end user accounts at CertiQ. This indicates Manager CertiQ B.V. that increasingly more corporate users attach value to full transparency in respect of the Guarantees of Origin which suppliers cancel on their behalf. Ir. B.G.M. Voorhorst This provides consumers with the assurance that the claims they are making Chief Operating Officer TenneT TSO B.V. with respect to their energy consumption are valid and reliable. 3 CertiQ 2015 Annual Report


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    Consumers are taking an increasingly active approach and set conditions for the Guarantees of Origin for the energy they consume. For example, the demand for certificates for wind energy has increased sharply. Over a period of two years, the demand has grown by 66% to more than 12 TWh per year.


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    2 Developments 2.1 Europe 2.2 Market developments In order to be able to improve the quality and exchangeability of Guarantees In addition to the increasing popularity of Dutch Guarantees of Origin, of Origin at a European level, CertiQ is a member of the Association of we see that the consumer’s involvement in renewable energy is greater Issuing Bodies (AIB). In 2015, SEMO (electricity market operator in Ireland) when the origin of the energy consumed is disclosed. A growing number and CREG (regulator of the electricity and gas market for federal Belgium) of suppliers provide the consumer with the possibility to choose from became members of the AIB, as a result of which the number of AIB which producer it wants to receive the Guarantees of Origin. In addition members increased to 21. to large energy suppliers and traders, more and more smaller energy suppliers are entering the market, focusing on local markets. As a result Just like CertiQ, AIB advocates to create a unique connection between of this development, the number of registered trade accounts and the the Guarantee of Origin and disclosure by laying down in a uniform way number of end user accounts are growing. In order to maintain a good that the Guarantee of Origin has to be applied for disclosure. The AIB insight into these market developments, CertiQ invests in close contact advocates to do this for all sources of energy, not only for sustainable with market parties, such as traders and NGOs (Non-governmental energy. By also stating on the Guarantees of Origin how much CO2 is organisations) in energy as well as end users. emitted and how much radioactive waste is released upon the generation of electricity, it will be possible to compare the consequences of electricity generation from different sources and to assign them to specific consumers. 2.3 Heat This will provide the (European) consumer with a better insight into the impact of its energy consumption on the environment. The AIB has For a few years, CertiQ has issued Guarantees of Origin for producers of explicitly included these themes in its recommendations to the European sustainable heat. These Guarantees of Origin are a condition for obtaining Commission for changes to the system of Guarantees of Origin in light an SDE subsidy. Moreover, we have noticed an increasing interest in of the renewal of the European Directive for sustainable energy. the use of Guarantees of Origin for heat to evidence the origin of heat supplied to (predominantly corporate) consumers. 5 CertiQ 2015 Annual Report


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    In total, the volume of green energy for which certificates were cancelled has increased to 42.6 TWh in 2015, an increase of more than 12%. Never before has so much green electricity been consumed in one year.


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    3 Results for 2015 3.1 Production Table 1: Participants in the system for Guarantees of Origin 31-12-2015 31-12-2014 At the end of 2015, a total of 12,642 production plants for sustainable Number Capacity (GW) Number Capacity (GW) electricity were registered with CertiQ, an increase of 4.5% compared to 2014. Their combined capacity amounted to more than 9.6 GW, Electricity production 12,642 9.6 12.096 8.4 plants compared to 8.4 GW in 2014. Part of this increase can be attributed to the registration of two offshore wind parks, which are expected Biomass 245 5.5 252 5.5 to become operational in 2016 or later. Hydro-electric 14 0.01 16 0.0 Solar 11,278 0.2 10,804 0.1 At the end of 2015, 198 production plants for sustainable heat were Wind 1,105 3.9 1,024 2.8 registered; in 2014 this number was 148. Their combined capacity amounted to 1.5 GW, compared to 1.0 GW in 2014. Heat production plants 198 1.5 148 1.0 Table 1 provides an overview of the number of participants in our Biomass 183 1.3 137 0.8 E-certification system. Geothermal 11 0.2 10 0.1 Solar thermal 4 0.02 1 0.0 In 2015, CertiQ issued Guarantees of Origin for a total of 13.1 TWh of sustainable electricity generated in the Netherlands. These certificates Traders 93 n.a. 81 n.a. 1 relate predominantly to generation in 2015, with a smaller contribution ) The registered capacity for hydro-electric energy amounts to 36 MW 2 from generation in previous years. In 2015, the issuance of Guarantees of ) The registered capacity for solar thermal energy amounts to approximately 2 MW Origin for sustainable electricity increased by approximately 14% compared to 2014. The production of wind energy grew, partly due to an increase in the installed capacity. However, we also registered a higher production for the existing plants than in the previous year. 7 CertiQ 2015 Annual Report


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    CertiQ issued Guarantees of Origin for a total of 3.4 TWh of heat in 3.2 Consumption the year under review. The issuance of Guarantees of Origin for heat has increased annually in line with the increase in the number of plants. The total number of cancellations increased from 37.9 TWh in 2014 The tripling we experienced in 2015 can to a large extent be attributed to 42.6 TWh in 2015. This is an increase of 12.4%. to a one-off catching-up effect because of new regulations in 2015, which resulted in the large producers reporting on both 2014 and 2015. The import of Guarantees of Origin is necessary because the quantity of green electricity consumed is much larger than the quantity of electricity Table 2 sets out the apportionment of the various energy sources. for which CertiQ issues Guarantees of Origin. Figure 1 shows the percentage of the cancelled Guarantees of Origin by country of origin and figure 2 Table 2: Guarantees of Origin issued in 2014 and 2015 shows the cancelled Guarantees of Origin by energy source. From these per Terawatt-hour (TWh) figures it appears that the consumer has an increasing preference for Guarantees of Origin electricity generated from wind. It also shows that in 2015 the Guarantees 2015 2014 of Origin from Norway lost ground to Guarantees of Origin from Sweden (TWh) issued in and Italy. Electricity Biomass 5.5 5.7 Figure 1: Cancelled Guarantees of Origin by country of origin Wind 7.4 5.6 Hydro-electric 0.1 0.1 2015 2014 Solar 0.1 0.1 2,6 % Belgium 7,1 % Denmark 5,1 % Denmark 2,3 % Germany Total 13.1 11.5 0,7 % Germany 3,5 % Finland 0,6 % Estonia 12,8 % France Heat 5,2 % Finland 4,5 % Iceland 12,2 % France 0,9 % Italy Biomass 2.6 0.9 5,7 % Iceland 30,5 % Netherlands Geothermal 0.8 0.3 5,7 % Italy 27,8 % Norway Solar thermal 0.0 0.0 26,9 % Netherlands 2,7 % Austria 19,8 % Norway 0,6 % Slovenia Total 3.4 1.2 2,1 % Austria 7,3 % Sweden 0,2 % Slovenia 13,2 % Sweden 8 CertiQ 2015 Annual Report


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    As is shown in figure 2, the contribution from hydro-electric energy End user account decreased from 58.8% in 2014 to 53.4% in 2015. The share of wind When cancelling a Guarantee of Origin a trader states whether this is energy increased from 25.1% to 29.2%. done in the capacity of energy supplier for a product the trader offers to customers with a contract for sustainable energy, or because the trader In table 3 below the cancelled Guarantees of Origin by energy source is greening the energy for a corporate consumer, or ‘end user’. Table 4 are shown in round GWh. shows how many Guarantees of Origin were cancelled in the past two years for products and end users, in relation to the number of end users. Table 3: Cancelled Guarantees of Origin in GWh, by energy source This comparison shows that the corporate market has been growing 2015 2014 2013 relatively strongly, both in respect of the numbers of end users and in the number of Guarantees of Origin cancelled for end users. Therefore, Biomass 6,416 5,827 6,101 we conclude that an increasing number of organisations are making Geothermal 325 212 902 a conscious choice for green electricity and want to be transparent Hydro-electric 22,761 22,267 25,453 about its origin. Solar 666 58 18 Wind 12,436 9,523 7,482 Figure 2: Cancelled Guarantees of Origin by energy source Total 42,604 37,887 39,956 2015 2014 15,0 % Biomass 15,4 % Biomass Tabel 4: Cancelled Guarantees of Origin and end users 0,8 % Geothermal 0,6 % Geothermal 2015 2014 53,4 % Hydro-electric 58,8 % Hydro-electric 1,6 % Solar 0,1 % Solar Number of end users 327 199 29,2 % Wind 25,1 % Wind Number of cancelled Guarantees of Origin (in GWh) for: End users 9,984 7,501 Products 32,620 30,386 Total 42,604 37,887 9 CertiQ 2015 Annual Report


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    3.3 Import, export and stock of certificates Table 5: Movements in the stock of Guarantees of Origin for sustainable electricity in TWh 2015 2014 In the year under review, the import of sustainable electricity increased by 1.8 TWh to a total of 34.3 TWh. The export declined to 3.5 TWh in 2015. Issuance 13.1 11.4 Import 34.3 325 Increase in stock of certificates 47.4 43.9 3.4 Certification of fossil electricity Domestic transfers 7.9 8.5 For a number of years, CertiQ has issued certificates on request for Cancelled 42.6 37.9 electricity generated from fossil sources (natural gas and coal). Table 6 Certificates issued for own use 0.8 0.8 provides an overview of all movements in the stock of certificates for Export 3.5 7.0 non-sustainable electricity. In 2015, CertiQ issued more Guarantees Expired 1.4 1.0 of Origin for fossil electricity than in the previous year, i.e. some Decrease in stock of certificates 48.3 46.7 1.5 TWh in 2015 compared to 1.0 TWh in 2014. Movement in stock of certificates - 0.9 - 2.8 Table 6: Movements in the stock of Guarantees of Origin for non-sustainable electricity in GWh 2015 2014 Issuance 1,545.6 1,040.4 Import 40.0 - Increase in stock of certificates 1,585.6 1,040.4 Domestic transfers - 440.0 Cancelled - 54.6 Certificates issued for own use 69.7 42.4 Export 763.0 945.0 Expired 53.0 - Decrease in stock of certificates 885.7 1,042.0 Movement in stock of certificates 699.9 - 1.6 10 CertiQ 2015 Annual Report


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    3.5 Operational affairs 3.6 Financial result In the year under review, the focus was in particular on records related The financial income and expenditure for 2015 (× EUR 1,000) can be to the generation of sustainable heat and the generation of electricity summarised as follows: with the use of biomass. The number of reports has increased as a result of the larger number of plants, but also as a result of the obligation Table 7: Financial result to report more frequently for purposes of SDE subsidies. 2015 2014 For a large number of the aforementioned reports, the annual deadline Invoiced revenue 2,050 1,958 for submission is 30 April, which causes a recurring peak in our workload. To be adjusted in tariffs 92 486 In 2015, CertiQ implemented a number of improvements to reduce Release of myCertiQ I investment 150 150 contribution this (growing) workload. For example, the processing time of reports for heat plants has been reduced by streamlining the process and through Other income 90 88 further automation, requiring fewer operations. Furthermore, CertiQ 2,382 2,682 has identified various improvement opportunities for the processing Operating costs 2,381 2,677 of reports for biomass electricity, to be implemented in 2016. Operating result 1 5 Financial income and expenses -1 -5 In 2015, other processes were also addressed and a foundation was laid Result - - to start digital invoicing in 2016. In 2015, invoiced revenue was 4.7% higher than in 2014. We introduced a new fee structure in order to be able to better allocate the costs for the different products. With effect from 2015, CertiQ has started operating under mandate of the Minister of Economic Affairs. This means that, amongst others, the Minister sets the tariffs based on a tariff proposal by TenneT/CertiQ. CertiQ makes the tariff proposal on the basis of multiple-year budgeting and requests the advice of the Participants’ Council. 11 CertiQ 2015 Annual Report


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    The adjustment of the tariffs for 2015 comprised, broadly, two types The most important developments in relation to the operating costs can of changes: be summarised as: - a surcharge for biomass and heat in order to prevent cross-financing; - higher wage costs; - creating uniformity in the tariffs for the issuance of Dutch Guarantees - lower amortisation costs, because there were no more amortisation of Origin and for import. costs for the website in 2015 (the website was already amortised in full in 2014); The following tariffs per MWh were applied in 2015: - lower other operating costs, in particular as a result of lower - Issuance of wind/hydro-electric/solar € 0.018 maintenance costs of the automation. - Issuance of biomass/heat € 0.041 - Cancellation € 0.018 CertiQ works on a cost-recovery basis. Any difference between CertiQ’s - Import € 0.018 invoiced revenues and operating costs is cleared by adjusting tariffs in later - Transfer € 0.008 years. As at 31 December 2015 this difference ‘to be adjusted in tariffs’ - Export € 0.008 amounted to EUR 402 thousand. Following consultation with the Participants’ Council in 2011, an amount of EUR 750 thousand was deducted from this The annual contribution of € 25 per plant was suspended for all producers. balance and allocated to investment contributions in 2012. Investment The annual membership fee for traders amounts to € 500. contributions were used for updating the E-certification system (myCertiQ). Compared to 2014, operating costs decreased by 11.1%. In connection with For more detailed notes to the financial results, please refer to the financial the lower than expected revenues at the end of 2014/beginning of 2015, statements included in Chapter 5. market prognoses and possibilities to adjust cost levels were investigated. As a result, a number of activities and investments were postponed. 12 CertiQ 2015 Annual Report


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    Another sign that the consumer is having an increasingly profound impact is the increase in the number of end user accounts at CertiQ. This indicates that increasingly more corpo- rate users attach value to full transparency in respect of the Guarantees of Origin which suppliers cancel on their behalf. This provides consumer with the assurance that the claims they are making with respect to their energy consumption are valid and reliable.


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    4 Corporate Governance CertiQ has chosen, just like TenneT TSO B.V. (hereinafter: TenneT) - Financial reporting the sole shareholder as well as director of CertiQ - to comply with CertiQ’s management is of the opinion that the financial statements for the Corporate Governance Code where possible, despite the fact that 2015 do not contain any errors of material significance. Management it is not obliged to do so. In CertiQ’s opinion, the Code’s principles and believes, to the best of its knowledge and conviction, that there are no best practice provisions serve as a guideline for running its business. further indications that CertiQ’s internal risk management and control systems have not operated adequately with regard to the financial Management reporting risks in the year under review and that they would not provide CertiQ’s management is responsible for the strategic and organisational a reasonable degree of assurance that the financial reporting does not policies and for issuing and registering energy certificates, for which it contain any errors of material significance. renders accountability to TenneT. TenneT sets the framework for policy- making for the internal risk management and control systems. Within External auditor this framework, CertiQ’s management is responsible for the management The external auditor of CertiQ, Ernst & Young Accountants LLP, has been of these systems. CertiQ prepares an annual plan, including its operational charged with the audit of the financial statements and reports to CertiQ’s budget, its investment budget and its funding needs. This annual plan is management and shareholder. The external auditor issues the auditor’s approved by the shareholder and serves as a mandate for management. opinion for the financial statements. CertiQ reports to the shareholder on the execution of its annual plan at least every quarter. The financial results and operational developments For more information on TenneT’s Corporate Governance Code, please are reported periodically. refer to the chapter Corporate Governance in the Annual Report for 2015 of TenneT Holding B.V. 14 CertiQ 2015 Annual Report


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    Guarantees of Origin are therefore not only about how, where and when the energy is generated; the certification scheme is also about the impact of this energy on the environment in which we live. This sheds an entirely new light on the social relevance of a Guarantee of Origin.


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    5 2015 Financial statements Balance sheet as at 31 December 2015, after appropriation of profits 17 Profit and loss account for 2015 18 General notes 19 Principles for the valuation of the assets and liabilities 19 Principles for the determination of the result 21 Financial instruments and risk management 21 Notes to the balance sheet as at 31 December 2015, after appropriation of profits 22 Notes to the profit and loss account for 2015 25 Additional notes for 2015 27 Other information 28 Independent auditor’s opinion 29 (clickable table of content) 16 CertiQ 2015 Annual Report


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    Balance sheet as at 31 December 2015 after appropriation of profits (x EUR 1,000) Assets Ref. 31 December 2015 31 December 2014 Fixed assets 1 Intangible fixed assets 1,115 1,734 1,115 1,734 Current assets Receivables 2 Accounts receivable and other receivables 547 365 547 365 1,662 2,099 Equity and liabilities Ref. Equity 3 Paid up capital 18 18 18 18 Long term liabilities 4 Investment contributions 113 263 Government subsidies 15 29 128 292 Current liabilities 5 Accounts payable 24 7 Associated companies 859 1,072 Prepayments received 566 659 Accrued liabilities 67 51 1,516 1,789 1,662 2,099 17 CertiQ 2015 Annual Report


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    Profit and loss account for 2015 (x EUR 1,000) Ref. 2015 2014 Revenue 6 Revenue 2,142 2,444 Other operating income 240 238 2,382 2,682 Operating costs 7 Wages, salaries and social security costs 1,055 1,000 Amortisation of intangible fixed assets 618 643 Other operating costs 708 1,034 2,381 2,677 Operating result 1 5 Financial income and expenses 8 Interest received/paid -1 -5 Result after tax - - 18 CertiQ 2015 Annual Report


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    General notes Nature of the business activities sub 1 of the Netherlands Civil Code (‘Burgerlijk Wetboek’), the notes to The Executive Board of TenneT TSO B.V., the Dutch Transmission System the relevant entry in the financial statements explain the nature of the Operator and administrator of the national high-voltage grid, has been assessments and estimates, including the corresponding assumptions. mandated by the Minister of Economic Affairs to establish an E-certification system. TenneT established CertiQ B.V. and appointed CertiQ’s Senior Manager on the basis of a sub-mandate to set up this system and Principles for the valuation of the assets and liabilities implement the activities associated with it. CertiQ does this by facilitating trade in sustainably generated energy General through issuing and managing production certificates. Production The financial statements are drawn up in accordance with the provisions certificates, such as Guarantees of Origin, are issued for the production of Title 9, Book 2, of the Netherlands Civil Code (‘Burgerlijk Wetboek’), of energy generated with the sustainable sources solar, hydro-electric, and the Accounting Standards for small legal entities, as published by wind, biomass and geothermal. Guarantees of Origin which are provided the Dutch Accounting Standards Board (‘Raad voor de Jaarverslaggeving’). electronically are the only valid proof in the Netherlands that energy The valuation principles are based on historical cost and cost price. has been generated in a sustainable manner. The certificates for sustainable energy are eligible for subsidies under the statutory schemes The amounts included in the financial statements are denominated of the Sustainable Energy Production Incentives (SDE+) scheme in EUR x 1,000. and the Environmental Quality of Electricity Generation Act (MEP). They are also nationally and internationally tradable. On request, Assets and liabilities are, in general, valued at the acquisition cost CertiQ also issues production certificates for non-sustainable sources. or manufacturing cost, or the actual value. All shares in CertiQ are held by TenneT. Comparison to previous year The accounting principles are the same as those used in the previous year. Estimates In applying the principles and regulations for drawing up the financial Intangible fixed assets statements, CertiQ’s management makes various assessments and estimates The intangible fixed assets are valued at the original acquisition cost or that may be essential for the amounts shown in the financial statements. production cost, after deducting linear amortisation based on the asset’s Where the nature of these assessments and estimates must be disclosed economic life. Expected long-term loss of value at the balance sheet date to offer the reader the level of understanding required under Article 2:362, is taken into account. 19 CertiQ 2015 Annual Report


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    At the balance sheet date, CertiQ assesses whether there are any indications Cash and cash equivalents that a fixed asset may be subject to impairment. If such indications exist, Liquid assets consist of bank balances with a term of less than twelve the realisable value of the individual asset is determined. If it is not months and are valued at their nominal value. possible to determine the realisable value for the individual asset, the realisable value of the cash flow generating unit of which the asset Long term liabilities is part will be determined. Impairment exists when the book value of Long term liabilities consist of investment contributions and government an asset is higher than the realisable value; the realisable value is investment subsidies. the higher of the net realisable value and value in use. The net realisable value is determined with the aid of the active market. After approval by the Participants’ Council, the investment contributions were An impairment loss is directly recognised as a cost in the profit and deducted from the entry ‘To be adjusted in tariffs’ and used for investments loss account. in (intangible) fixed assets. An annual amount equal to the depreciation cost is released and recognised under Other operating income. The current part If it is determined that an impairment accounted for in the past no longer of the investment contributions is recognised under Current liabilities. exists or has decreased, the increased book value of the asset concerned will not be recognised for a value higher than the book value which Government investment subsidies received are accounted for on the balance would have been determined if the impairment of the asset had not sheet. Concurrent with the economic life of the asset to which the subsidy been accounted for. relates, an amount is released annually and added to Other income. Current assets Current liabilities Upon initial entry, receivables are valued at the fair value of the conside- Upon initial entry, current liabilities are carried at nominal value. ration. After the initial entry, trading receivables are valued at amortised After the initial entry they are carried at amortised cost price. cost price. If payment on the accounts receivable is postponed under an Current liabilities comprise the entries ‘To be adjusted in tariffs’ and agreement extending the payment deadline, its fair value is determined the current part of the ‘Investment contributions’ and ‘Government on the basis of the cash value of the expected receivables, and adjustments investment subsidies’. ‘To be adjusted in tariffs’ relates to the difference are made to the ‘interest received’ entry in the profit and loss account. between Invoiced revenue and Operating cost related thereto, which Provisions for bad debts are subtracted from the book value of the needs to be settled with the market parties through the tariffs of receivable. subsequent years. 20 CertiQ 2015 Annual Report


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    Principles for the determination of the result Taxes Because CertiQ adjusts the difference between Invoiced revenue and Revenue Operating costs in the tariffs of subsequent years, there can be no fiscal In article 29 of the ‘Regulation on Guarantees of Origin for energy result. The tax to be paid is therefore nil at all times, as agreed with generated with renewable energy sources and on high-efficient the Dutch Tax authorities. cogeneration electricity1’ the tariffs are stated which apply to recover the costs related to Guarantees of Origin. Financial instruments and risk management With effect from 2015 the tariffs are set by the minister after approval by the Board of TenneT and consultation with the Participants’ Council. Price risks The difference between actual cost and invoiced revenue is adjusted in CertiQ is not subject to any price risks due to the fact that any surplus the tariffs of subsequent years. or deficit is adjusted in the tariffs of subsequent years. Other income comprises the annual release of investment contributions, Credit risks government investment subsidies and compensation of the work carried CertiQ does not have any significant concentrations of credit risk. The credit out by CertiQ staff on various projects, such as AIB and CA-RES. risk is limited because the payment of invoices is a precondition for trading in certificates. The write-offs of Receivables are negligible. Operating costs Operating costs are determined on a historical basis and allocated Liquidity risks to the reporting year to which they relate. The liquidity risk for CertiQ is minimal. CertiQ has a current account with TenneT. TenneT does not have the intention to make a claim on Amortisation of intangible fixed assets this current account, as TenneT has mandated CertiQ for certification The amortisation of intangible fixed assets is determined in line with and is sufficiently solvent. the asset’s expected economic life, using the linear method. Financial income and expenses 1 Interest income and Interest charges are allocated in proportion to time, Dutch: Regeling garanties van oorsprong voor energie uit hernieuwbare taking into account the effective interest rate of the assets and liabilities energiebronnen en HR-WKK-elektriciteit concerned. 21 CertiQ 2015 Annual Report


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    Notes to the balance sheet as at 31 December 2015 after appropriation of profits (x EUR 1,000) 1 Fixed assets Intangible Intangible fixed assets Purchase price fixed assets in formation Total Intangible fixed assets The website, the E-certification system (myCertiQ I), the sustainable heat As at 31 December 2013 3,131 - 3,131 system (MyCertiQ II) and BO reporting (data warehouse) are recognised Capitalisations - - - under Intangible fixed assets. An amortisation period of three years Taken into service 51 - 51 applies to the website. The website was fully amortised in 2014. As at 31 December 2014 3,182 - 3,182 An amortisation period of five years is applicable to myCertiQ I, Capitalisations - - - myCertiQ II and BO reporting. Taken into service - - - As at 31 December 2015 3,182 - 3,182 The book value of Intangible fixed assets can be specified as follows (× EUR 1,000): Amortisation As at 31 December 2013 805 - 805 Amortisation for the year 643 - 643 As at 31 December 2014 1,448 - 1,448 Amortisation for the year 618 - 618 As at 31 December 2015 2,066 - 2,066 Book values As at 31 December 2013 2,326 - 2,326 As at 31 December 2014 1,734 - 1,734 As at 31 December 2015 1,115 - 1,115 22 CertiQ 2015 Annual Report


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    2 Receivables 4 Long term liabilities Accounts receivable and other receivables Investment contributions Accounts receivable consist of all receivables with a remaining term In 2011 it was agreed with the Participants’ Council that an amount of of less than one year. As the credit risk is estimated to be negligible, EUR 750 thousand be deducted in 2012 from ‘To be adjusted in tariffs’, no provisions for bad debts have been deducted from this entry. as stated below. The balance of this entry has been used for the new E-certification system myCertiQ I. An amount equal to the amortisation Accounts receivable can be specified as follows (x EUR 1,000): cost is released each year and allocated to Other operating income. At the end of 2015, this entry amounted to EUR 113 thousand. The current 2015 2014 part is accounted for under Current liabilities. The remaining term of Accounts receivable 481 309 the investment contributions is between one year and five years. Receivables from TenneT 32 37 Other receivables 34 19 Government investment subsidies Total 547 365 In 2012, CertiQ received a government subsidy of EUR 70 thousand from the Ministry of Economic Affairs for the preparation of the certification system for renewable heat (myCertiQ II). An amount equal to the amortisation cost is released each year and allocated to Other operating 3 Equity income. At the end of 2015, this entry amounted to EUR 15 thousand. The current part is accounted for under Current liabilities. The remaining Paid up capital term of the government investment subsidies is between one year and The authorised capital of the company amounts to EUR 90 thousand, five years. divided into 900 shares of EUR 100 each. Of these shares, 180 shares have been issued and paid up. 23 CertiQ 2015 Annual Report


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    5 Current liabilities The balance of ‘Prepayments received’, including the amount which is to be adjusted in the tariffs for subsequent years, can be specified Accounts payable as follows (× EUR 1,000): Accounts payable only comprise debts with a remaining term of less than one year. 2015 2014 To be adjusted in tariffs - 402 - 494 Associated companies Investment contributions - 150 - 150 This entry refers to the current account with TenneT. On the balance Government investment subsidies - 14 - 14 of this current account with TenneT, interest is charged in accordance Balance as at 31 December - 566 - 658 with the one-month Euribor +0.55 percent. Prepayments received Accrued liabilities This relates to the difference between Invoiced revenue and Operating Accrued liabilities relate to annual leave to be paid and costs to be paid. costs of CertiQ (EUR 566 thousand), which will be settled with Costs to be paid consist of provisions for costs for the annual report the market parties through the tariffs of subsequent years. and costs for hiring personnel and consultancy. The tariffs are set annually by the minister of Economic Affairs after approval by the Board of TenneT and consultation with the Participants’ Council. ‘Prepayments received’ also include the current part of the investment contributions and government investment subsidies. 24 CertiQ 2015 Annual Report


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    Notes to the profit and loss account for 2015 (x EUR 1,000) 6 Revenue Revenue from transactions can be further specified by type of work (× EUR 1,000): In the year under review, participants were invoiced on the basis of pre-set tariffs. The amount needed to cover costs was EUR 2,382 thousand, 2015 of which EUR 92 thousand is covered by a release of the “to be adjusted Regular activities 1,798 in tariffs” entry on (the liability side of) the balance sheet. Extra work for heat 204 and biomass Revenue Total 2,002 The negative difference between invoiced revenue and costs will be settled with differences brought forward from previous years. Other operating income Revenue can be specified as follows (× EUR 1,000): Other operating income comprises the release of the investment contribution for myCertiQ I in proportion to the depreciation of the asset 2015 2014 for which the investment contribution is intended and other income. Memberships 48 67 Other income consists of, on the one hand, a contribution by the Ministry Transactions 2,002 1,891 of Economic Affairs for operational activities in respect of the certification To be adjusted in tariffs 92 486 of renewable heat and, on the other hand, the release of the subsidy for Total 2,142 2,444 myCertiQ II. In addition, CertiQ receives compensation for the work under- taken in connection with the ‘Concerted Action on the Renewable Energy Revenue from transactions can be specified by type of transaction Sources Directive (CA-RES)’ of the Netherlands Enterprise Agency and (× EUR 1,000): compensation for activities undertaken for AIB. 2015 2014 Issuance of certificates 522 377 Transfers/import/export 713 407 of certificates Cancellation of certificates 767 1,107 Total 2,002 1,891 25 CertiQ 2015 Annual Report


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    Other operating income can be specified as follows (× EUR 1,000): Amortisation of intangible fixed assets The decrease in the amortisation of intangible fixed assets is caused 2015 2014 by the full amortisation of the website in 2014. Release of myCertiQ I 150 150 Other operating costs investment contribution Other income 90 88 Other operating costs consist of costs for process automation systems, Total 240 238 office premises, consultancy, an external auditor, travel and accommo- dation. Other operating costs decreased mainly because of reduced expenditure on process automation. 7 Operating costs 8 Financial income and expenses Wages, salaries and social security costs The company does not employ any employees. In 2015, the average Interest paid number of hired employees amounted to: This entry relates to the interest paid on the balance of the current account - Hired from TenneT: 11.9 fte (2014: 11.7 fte); with TenneT. - Hired from third parties: 0.7 fte (2014: 0.9 fte). Personnel costs can be specified as follows (× EUR 1,000): 2015 2014 Hired from TenneT 1,041 966 Hired from third parties 14 34 Total 1,055 1,000 26 CertiQ 2015 Annual Report


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    Additional notes for 2015 Off-balance sheet rights and obligations Events after the balance sheet date CertiQ, with TenneT Holding B.V. and its subsidiaries, is part of a fiscal No events have taken place after the balance sheet date that need entity for company tax and value added tax purposes. On the basis disclosing in these financial statements. of the standard conditions as issued by the Dutch Tax authorities at the time the fiscal entity was established, CertiQ is jointly and severally Independent auditor’s report is based on original Dutch financial liable for the company tax and value added tax liabilities of the whole statement. This English version of the financial statement is a translation fiscal entity. of the original 2015 financial statement of CertiQ in Dutch. EY has based their independent auditor’s report on the original Dutch version. CertiQ has concluded three agreements to hire staff from other employers. These involve an agreement for the structural provision of legal advice Arnhem, 21 March 2016 (term: January - December 2016) for which the costs amount to approximately EUR 44 thousand, an agreement for external technical Ir. J. van der Lee advice (term: January - December 2016) for which the costs amount to Manager CertiQ B.V. approximately EUR 76 thousand, and an agreement for hiring a policy officer (term: January – July 2016). These agreements stipulate the rate Ir. B.G.M. Voorhorst per hour and/or day to be charged for the use of these services. Chief Operating Officer TenneT TSO B.V. CertiQ B.V. Utrechtseweg 310 6812 AR Arnhem The Netherlands 27 CertiQ 2015 Annual Report


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    Other information Appropriation of profits The appropriation of profits as stipulated in article 29 of the Articles of Association reads as follows: 1 Profits will be distributed in accordance with the provisions of this article, after adoption of the financial statements, showing that this is justified. 2 The profits are at the disposal of the general meeting of shareholders of CertiQ. 3 The company may only make distributions to the shareholders and other persons entitled to the profits intended for distribution to the extent that the shareholders’ equity exceeds the subscribed capital plus the reserves which must be maintained by law. 4 A deficit may only be offset against the reserves prescribed by law to the extent permitted by law. 28 CertiQ 2015 Annual Report


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    Independent auditor’s report To: The Management Board and the shareholder of CertiQ B.V. Auditor’s responsibility It is our responsibility to express an opinion on these financial statements Report on the financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply We have audited the accompanying financial statements for 2015 with ethical requirements applicable to us and that we plan and perform of CertiQ B.V., Arnhem, which comprise the balance sheet as at the audit in such a way as to obtain reasonable assurance about whether 31 December 2015, the profit and loss account for the year then the financial statements are free from material misstatement. ended and the notes, comprising a summary of the accounting policies and other explanatory information. An audit involves performing procedures to obtain audit evidence about the amounts and notes in the financial statements. The procedures selected Management’s responsibility depend on the auditor’s judgment, including the assessment of the risks of The company’s management is responsible for the preparation and fair material misstatement of the financial statements, whether due to fraud presentation of these financial statements and for the preparation of or error. the annual report, both in accordance with Title 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control In making those risk assessments, the auditor considers the internal controls as it determines is necessary to enable the preparation of the financial relevant to the entity’s preparation and fair presentation of the financial statements that are free from material misstatement, whether due statements in order to design audit procedures that are appropriate in to fraud or error. the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 29 CertiQ 2015 Annual Report


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    Opinion with respect to the financial statements In our opinion, the financial statements give a true and fair view of the financial position of CertiQ B.V. as at 31 December 2015 and of its result for the year then ended in accordance with Title 9 of Book 2 of the Dutch Civil Code. Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Zwolle, 21 March 2016 Ernst & Young Accountants LLP original was signed by A.E. Wijnsma RA 30 CertiQ 2015 Annual Report


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    In 2015, the European Commission started the consultation on the renewal of the European Directive for renewable energy, whereby it has given the “Consumer choice of action” the priority. Transparency about the origin and impact on the environment of our individual energy consumption is crucial for us to be able to make a difference our- selves: the consumer in the driver’s seat.


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    Appendix: CertiQ works together with … CertiQ has active partnerships with a number of parties in the sustainable Authority for Consumers & Markets (ACM) energy sector. To name a few: ACM is the regulator for the Dutch energy sector. Its duties include supervising the correct implementation of and compliance with the TenneT TSO B.V. 1998 Electricity Act and statutory schemes implemented by CertiQ. TenneT TSO BV is Europe’s first cross-border electricity transmission system operator. With 21,000 kilometres of high voltage lines and 41 million Regional grid operators end users in the Netherlands and Germany, TenneT ranks among the top Regional grid operators are responsible for the transmission of electricity five grid operators in Europe. TenneT’s focus is to develop a Northwest over the public electric grid. In relation to CertiQ, the grid operators are European energy market and to integrate renewable energy. Under mandate responsible for assessing applications to register generating plants and of the Ministry of Economic Affairs, TenneT established the E-certification for periodically submitting production volumes of electricity to CertiQ. system for renewable energy. CertiQ manages this system, which is linked to TenneT’s electronic infrastructure, on behalf of TenneT. TenneT is Metering companies the only shareholder in its subsidiary CertiQ. Metering companies are responsible for installing and maintaining electricity meters, collecting the data from the meters and submitting Netherlands Enterprise Agency (RVO) this information to the regional grid operator. RVO implements government policies on innovation and sustainable development and is part of the Ministry of Economic Affairs. RVO manages, Producers amongst others, the SDE(+) and MEP subsidy schemes, which subsidise Producers generate electricity or heat and supply it to a grid, or consume the generation of renewable energy that is certified by CertiQ. it on-site. CertiQ certifies the energy generated in order to make the origin of the energy transparent and traceable. Ministry of Economic Affairs The Ministry of Economic Affairs is responsible for, amongst others, policy making in relation to sustainably generated electricity. CertiQ consults regularly with the Ministry to align its policies regarding developments that affect CertiQ. 32 CertiQ 2015 Annual Report


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    Traders Association of Issuing Bodies (AIB) Traders enter into agreements with producers in connection with The AIB is an international partnership of certification management bodies, the purchase of Guarantees of Origin or other certificates. A producer of which CertiQ is a member. The members of the AIB issue Guarantees informs CertiQ of the trader it does business with. CertiQ credits of Origin. The AIB seeks to standardise certification systems to facilitate the corresponding Guarantees of Origin to the account of this trader. international trade. For this purpose it has developed a common standard: A trader can trade the certificates or use them as proof of delivery the EECS Standard. In its Renewable Energy Directive of 2009, the European to end users. Commission made many elements of the EECS Standard mandatory. Energy suppliers Statistics Netherlands (CBS) Energy suppliers are companies that purchase energy (including grey and CertiQ sends statistics to CBS on the electricity generation it has certified green electricity) and sell it to commercial and private users. It is therefore on a monthly basis, in accordance with an agreement concluded between the energy supplier who has the supply contract with the customer. TenneT/CertiQ and CBS. CBS processes the data for its publications. Every energy supplier in the Netherlands that wishes to supply green electricity must have a certificate account with CertiQ. Participants’ Council CertiQ has established the Participants’ Council for an optimal alignment with the needs of its participants. Its members represent the interests of all participants in the E-certification system. The Participants’ Council comprises producers, traders (including foreign traders operating in the Netherlands) and representatives of several large energy suppliers. In drawing up its annual plan, CertiQ explicitly takes into account the Council’s advice. 33 CertiQ 2015 Annual Report


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    Address CertiQ B.V. is a subsidiary of TenneT TSO B.V., the Dutch Transmission System Operator and network manager of the national electric grid. CertiQ B.V. Utrechtseweg 310 6812 AR Arnhem PO Box 718 6800 AS Arnhem The Netherlands +31 26 373 16 58 servicedesk@certiq.nl www.certiq.nl Colophon © This annual report is a digital publication by CertiQ B.V., Arnhem Text CertiQ, TenneT Design Loep ontwerp, Arnhem NL Published March 2016 34 CertiQ 2015 Annual Report


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