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  • Location: GELDERLAND 
  • Founded: 2001-07-23
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    commitment 2017 Annual report


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    1 Preface For CertiQ, 2017 was all about commitment. There was the market’s transparent information on the origin of electricity and heat, and how commitment to renewable energy: never before has CertiQ issued so they were generated. We’ve noticed that more and more consumers and many certificates for sustainable electricity and have so many certificates business end users want to make a difference by buying energy from been cancelled. Also, the number of production plants for sustainable a specific origin. We certified a record total of 15.8 terawatt hours (TWh) electricity registered with CertiQ increased by no less than 14%. of renewable electricity in 2017 – 1.4 TWh more than in 2016. The import of Guarantees of Origin (GOs) also rose to record heights (40.1 TWh), driven by the total number of cancellations, which itself reached a historic commitment (noun) a willingness to give your time and energy to something maximum of 49.4 TWh – up 2.8% on last year. that you believe in, or a promise or firm decision to do something. These developments illustrate that GOs continue to be of important added value in the energy market. This is also evident in the political Then there’s CertiQ’s fine-tuned strategic direction, which has the commit- arena. In the past year, the Netherlands has taken the first step towards ment of our most important stakeholders: the Ministry of Economic Affairs Full Disclosure: the certification of all types of electricity, green and grey. and Climate Policy, the Netherlands Enterprise Agency, CertiQ’s Participants From 2018, the calculations on energy labels will be more reliable and Council and TenneT TSO B.V. (TenneT). By keeping our tariffs the same straightforward, because any deviations from the residual mix must now in 2018, the expected increase in transaction volumes will enable us be corroborated by GOs, certificates of origin or a supplier’s own data to make IT investments that will facilitate this strategic direction. backed up by an independent auditor’s report. And last, but certainly not least, there was the year-round commitment This way of working has been laid down in a statement of intent drawn of the CertiQ team to its customers – energy producers, traders, suppliers up by energy sector association Energie Nederland. Shortly before the and (business) end users. CertiQ remains fully committed to the energy publication of this annual report, the House of Representatives in the transition, to which we contribute together with our customers and Netherlands approved an amendment to the Energy Transition Progress other stakeholders. 2017 was also the year of the ratification of the Paris Act, which, if approved by the Senate, will mean that energy labels will Agreement and of ambitious energy and climate goals in the Netherlands’ have to be fully substantiated by GOs or certificates of origin. In Europe, coalition agreement. the draft Renewable Energy Directive is progressing steadily. The European Parliament and the European Council have determined their standpoints CertiQ has one goal: to certify electricity and heat, and in doing so and negotiations on a final directive will start in the coming months. provide consumers, market parties and governments with reliable and 2 CertiQ 2017 Annual Report


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    The demand for GOs is growing year-on-year. The market for renewable To achieve these strategic ambitions requires a substantial investment in IT, energy is changing fast, and energy transition – and the role that (business) which is why in 2017 CertiQ drafted its Strategic IT Roadmap. Over the consumers play in that – features prominently on the political agenda next few years, CertiQ will make significant investments in the technical in the Netherlands and in Europe. Past results offer no guarantee for and functional quality of its electronic certificate register and in how the future, but the Paris Agreement contains clear ambitions that open user-friendly it is. In 2018, CertiQ will develop an initial proof of concept up the prospect of a further acceleration in the growth of the production to use blockchain technology in certification. and use of renewable energy in the Netherlands. The CertiQ team – in its new composition – remains committed to imple- Such a changing environment prompted the need to reassess our strategy. menting performance improvements, where the customer’s perspective In 2017, CertiQ worked with the Participants Council, the Ministry of is paramount. Making organisational and IT changes, for instance, has Economic Affairs and Climate Policy, the Netherlands Enterprise Agency considerably reduced the processing period for biomass and heat reports, and TenneT to conduct a SWOT analysis and to define the following without making any concessions to quality. strategic ambitions for 2018-2023: - to provide reliable, secure and user-friendly certification of electricity In 2018, we will take a dynamic approach to achieving our strategic and heat (licence to operate); ambitions; ambitions that can only be achieved if there is commitment - to facilitate Full Disclosure in the broadest sense (supply and production, for them among our stakeholders. We made a good start on this in 2017 centralised and decentralised, grey and green); and will continue to work on our ambitions in 2018 with a committed - to include plant-specific CO2 emissions on GOs; and CertiQ team. - to provide real-time information on the production and use of sustainable electricity and heat. C.C. Krijger B.G.M. Voorhorst Senior Manager CertiQ B.V. Chief Operating Officer TenneT TSO B.V. 3 CertiQ 2017 Annual Report


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    CertiQ B.V. 2016 Annual Report In this translation an attempt has been 1 Preface 2 made to be as literal as possible without jeopardizing the overall continuity. 2 Developments 6 In the event of discrepancies or ambiguity 2.1 Full Disclosure 6 between the original Dutch version of 2.2 myCertiQ 6 the 2017 Annual Report of CertiQ BV 2.3 Market 6 and this English translation, the Dutch 2.4 International 7 text shall prevail. 3 Results 8 3.1 Production 8 3.2 Consumption 10 3.3 Import, export and stock of certificates 12 3.4 Certification of fossil elektricity 12 3.5 Operational affairs 13 3.6 Financial result 13 4 Financial Statements for 2017 16 Appendix CertiQ works together with… 33 Contact details and publication details 36 (clickable table of content) 4 CertiQ 2017 Annual Report


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    market commitment to renewable enery Consumers and businesses are increasingly discerning about the sources they buy their energy from. This trend made 2017 a record year for CertiQ, with more Guarantees of Origin (GOs) for renewable energy issued, imported and cancelled than ever before. Suppliers make this possible by offering energy from local wind pylons for instance.


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    2 Developments 2.1 Full Disclosure we have decided to make some significant investments in myCertiQ and our strategic IT. This will of course be done in close consultation and, To implement the Full Disclosure parliamentary letter (in Dutch) from where possible, collaboration with our stakeholders. September 2016, Energie Nederland1 drafted a statement of intent that improves and clarifies the supporting data and calculations on energy 2.3 Market labels. These legally mandatory energy labels are used by suppliers to inform consumers on the origin of the electricity they supply. Heat and the greening of the industry A few years ago, we saw that the use of geothermal heat reduced the use With the energy label in effect, there will be only two ways to deviate of gas in Dutch greenhouses. Now we are seeing, based on measurement from the residual mix from 2018: either by using certificates (GOs protocols and corresponding research, that wood-fired boilers2 are having for renewable electricity and certificates of origin for non-renewable a gradual decreasing effect on the use of propane and natural gas in electricity) or data (corroborated by an independent auditor’s report) the intensive livestock farming industry. The use of heat from renewable on the supply of non-renewable electricity through Power Purchase sources in different industries is growing gradually. Beyond the agricultural Agreements or own production. As such, we are now a step closer to industry, we are seeing this development in other industries, such as food Full Disclosure, which implies that all electricity produced and supplied processing and chemical. (both green and grey) will be fully certified and completely traceable to a production source. CertiQ conducted a heat pilot project in the past year, in which the first steps towards trading sustainable heat were taken. Within the legal frame- 2.2 myCertiQ work for proving the sustainability of heat grids, this pilot facilitated the trade of sustainable energy between parties connected to a heat grid. Through the myCertiQ application, CertiQ facilitates the trade in fully In doing so, it enabled customers to purchase a specific mix of heat. digital GOs. In 2017, we performed an Application Lifecycle Management Assessment to establish the extent to which the current application meets actual system and functionality requirements, and to see whether the application was sufficiently robust to meet the expected growth in production and use of renewable energy. Moreover, we laid down 1 In collaboration with the Ministry of Economic Affairs and Climate Policy, the Authority for the IT developments that we need to invest in to achieve our strategic Consumers & Markets, independent environmental organisation Natuur en Milieu, and CertiQ. ambitions in the CertiQ Strategic IT Roadmap. Based on our research, 2 These are automatically operated wood-fired boilers with a capacity > 500 kW which comply with emissions legislation for, among other things, particulate matter. 6 CertiQ 2017 Annual Report


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    Process and risk analysis SDE+/GOs scheme 2.4 International The Dutch energy system is transitioning and for the national government the Stimulation of Sustainable Energy Production (SDE+) scheme is Throughout 2017, the European Parliament and the European Council an important instrument to promote this transition. As the party issuing determined their standpoints on a package of measures from the European GOs based on which production-related subsidies are paid, CertiQ plays Commission, i.e. the so-called ‘Clean Energy for All Europeans’ package, an important role in the SDE+ chain. An analysis (in Dutch) by consultancy that focuses on the transition to a renewable energy supply. The Association Berenschot – commissioned by the Ministry of Economic Affairs and of Issuing Bodies (AIB) – of which CertiQ is a member and where CertiQ Climate Policy – provides an overview of how the processes in this chain has administrative representation – has contributed its expertise to are organised, including the possible risks stemming from this. Given this discussion by informing parties involved about the consequences the increase in the number of project developers and producers using the proposed measures will have on the role that GOs play in the energy the SDE+ scheme, it is increasingly important that there is clear direction transition. Negotiations between the European Commission, the European in the chain. CertiQ plays an active role in ensuring this, for instance Parliament and the European Council on the final legislation will be held by organising a grid operator meeting four times a year. in 2018. In 2017, CertiQ participated in CA-RES3, a European platform that facilitates the discussion between governments and societal parties on the implementation of the current European legislation on GOs. 3 Concerted Action Renewable Energy Sources Directive 7 CertiQ 2017 Annual Report


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    3 Results 3.1 Production Table 1: Participants in the system for GOs 31-12-2017 31-12-2016 At the end of 2017, a total of 15,880 production plants for sustainable Number Capacity (GW) Number Capacity (GW) electricity were registered with CertiQ – an increase of 14.0% compared to 2016. This growth can primarily be attributed to a growing number Electricity production 15,880 8.0 13,935 8.8 plants of generally large (> 100 kW) solar PV plants. As such, capacity in this group increased by nearly 70%. Nevertheless, there was a drop in total Biomass 239 3.1 246 4.2 capacity because a few large co-fired plants are no longer registered. Hydro-electric 16 0.01 16 0.0 Solar 14,430 0.7 12,532 0.4 CertiQ also saw an increase in renewable heat, with 287 production Wind 1,195 4.2 1,141 4.2 plants for renewable heat registered at the end of 2017 (2016: 238). This represents an almost 20% increase in the number of plants, Heat production 287 2.0 238 1.7 plants as well as capacity. Biomass 263 1.8 219 1.5 Table 1 provides an overview of the number and type of participants Geothermal 14 0.2 12 0.2 in our E-certification system. Solar thermal 10 0.02 7 0.0 Traders 127 n.a. 106 n.a. 1 ) The registered capacity for hydro-electric energy amounts to approximately 37 MW 2 ) The registered capacity for solar thermal energy amounts to approximately 3 MW 8 CertiQ 2017 Annual Report


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    In 2017, CertiQ issued GOs for a total of 15.8 TWh of sustainable electricity Figure 1: GOs issued for electricity generated in the Netherlands. Nearly 90% of these certificates concern TWh 18 electricity generated in 2017 – the rest in previous years. The issuance 16 of GOs for sustainable electricity in 2017 increased by approximately 14 9.5% compared to 2016, an increase that can be attributed to wind 12 and solar energy. 10 8 CertiQ issued GOs for 4.3 TWh of heat – an increase of more than 30% 6 compared to 2016. 4 Wind Solar 2 Hydro-electric Table 2 and figures 1 and 2 present a breakdown of the GOs per 0 Biomass energy source. 2017 2016 Table 2: GOs issued in 2017 and 2016 in TWh GOs (TWh) issued in 2017 2016 Electricity Figure 2: GOs issued for heat Biomass 4.9 5.6 TWh 5.0 Hydro-electric 0.1 0.1 4.5 Solar 0.6 0.3 4.0 Wind 10.2 8.4 3.5 Total 15.8 14.4 3.0 2.5 Heat 2.0 Biomass 3.5 2.5 1.5 Geothermal 0.8 0.8 1.0 Solar Solar thermal 0.0 0.0 0.5 Geothermal Total 4.3 3.3 0 Biomass 2017 2016 9 CertiQ 2017 Annual Report


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    3.2 Consumption Figure 4: Cancelled GOs by country of origin % 100 When renewable electricity is supplied, the supplier must prove with GOs 90 that the amount sold as renewable electricity is sustainable. For every MWh 80 of electricity sold as renewable energy, at the request of the supplier, one GO 70 is marked by CertiQ as ‘used’, the so-called ‘cancellation’. Cancelling of GOs 60 must occur within one month after the renewable electricity is supplied. 50 Sweden Italy Czech Republic Iceland GOs are invalid after cancellation and cannot be used again. The total number 40 Spain France of cancellations for electricity rose from 48.0 TWh in 2016 to a new historic 30 Slovenia Finland record of 49.4 TWh in 2017; an increase of 2.8%. 20 Austria Estonia Norway Germany 10 The Netherlands Denmark Figure 3: Cancelled GOs for electricity 0 Croatia Belgium TWh 60 2017 2016 50 Figure 5 shows the cancelled GOs by energy source. This figure shows 40 that consumers have a growing preference for wind-generated electricity. 30 20 Figure 5: Cancelled GOs by energy source 10 % 100 0 90 2013 2014 2015 2016 2017 80 70 GOs need to be imported because the quantity of green electricity 60 consumed in the Netherlands is far greater than the quantity generated. 50 Figure 4 shows the percentage of the cancelled GOs in the Netherlands 40 by country of origin. In 2017, Norway had to hand over its top spot 30 Wind to Italy, with wind also trumping water. 20 Solar Hydro-electric 10 Geothermal 0 Biomass 2017 2016 10 CertiQ 2017 Annual Report


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    Table 3 shows the cancelled GOs per energy source in round End-user accounts gigawatt hours (GWh). When cancelling a GO, a trader states whether they are doing this in the capacity of an energy supplier offering a product to a customer with Table 3: Cancelled GOs in GWh, by energy source a contract for sustainable energy, or because the trader is greening 2017 2016 the energy for a corporate consumer, or ‘end user’. Biomass 5,504 5,379 Table 4 shows how many GOs were cancelled in previous years for products Geothermal 165 1,089 and end users, in relation to the number of end users. It shows that the Hydro-electric 17,146 19,168 number of cancellations in support of products delivered to consumers Solar 816 940 has remained relatively stable, after a record year in 2016. What’s more, Wind 25,732 21,454 we also see that the corporate market is still growing strongly. In 2017, Total 49,363 48,030 the number of end-user accounts increased by 184 (up 36%), while the total of cancelled GOs for end users increased by more than 18%. This, and the fact that more GOs were cancelled in 2017 than ever before, shows that there is broad support in society for GOs. Table 4: Cancelled GOs and end users 2017 2016 Number of end-user accounts 701 517 Number of cancelled GOs (in GWh) for End users 14,259 12,030 Products 35,104 36,000 Total 49,363 48,030 11 CertiQ 2017 Annual Report


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    3.3 Import, export and stock of certificates 3.4 Certification of fossil electricity The import of renewable electricity increased in 2017 by 2.6 TWh to a total CertiQ issues certificates on request for electricity generated from fossil of 40.1 TWh – up nearly 7%. Export increased slightly for the first time sources, e.g. natural gas and coal. Table 6 provides an overview of all in years. Table 5 provides an overview of all the movements in the stock movements in the stock of certificates for non-renewable energy. of certificates for renewable electricity. The number of certificates issued has nearly doubled compared to 2016, with most certificates being exported to Austria where it is assumed Table 5: Movements in the stock of GOs for renewable electricity in TWh they are being used to compensate for the generation of nuclear energy. 2017 2016 For a clear calculation on energy labels it is important that all electricity is certified and traced in this manner. CertiQ is committed to this goal Issuance 15.8 14.4 because it helps energy consumers make a conscious decision on the Import 40.1 37.5 energy they use. Increase in stock of certificates 55.9 51.9 Domestic transfers 11.1 7.5 Table 6: Movements in the stock of certificates for non-renewable electricity in GWh 2017 2016 Cancelled 49.4 48.0 Certificates issued for own use 1.2 1.1 Issuance 1,190.4 600.5 Export 4.0 3.1 Import 163.6 0.0 Expired 0.7 0.5 Increase in stock of certificates 1,354.0 600.5 Decrease in stock of certificates 55.3 52.7 Domestic transfers - - Stock as at 1 January 11.4 12.2 Cancelled - - Movements in stock of certificates 0.6 - 0.8 Certificates issued for own use 12.6 25.1 Stock as at 31 December 12.0 11.4 Export 928.4 868.1 Expired 12.5 68.7 Decrease in stock of certificates 935.5 961.9 Stock as at 1 January 106.4 467.8 Movement in stock of certificates 400.5 - 361.4 Stock as at 31 December 506.9 106.4 12 CertiQ 2017 Annual Report


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    3.5 Operational affairs 3.6 Financial results CertiQ greatly values quality and customer satisfaction, and we aim The financial income and expenditure for 2017 (× EUR 1,000) can be to continuously improve our services. Below are a few examples of summarised as follows: how we achieved this in 2017. Table 7: Financial results To be able to prove the origin of renewable heat and electricity generated 2017 2016 from biomass, producers of such energy have to periodically – in most cases annually – submit an audit report to CertiQ that has been verified Revenues 2,202 2,235 by an independent metering company or auditor. The timely processing Other income 131 210 of this is very important because subsidies issued by the Netherlands 2,333 2,445 Enterprise Agency depend on them. Thanks to a number of improvements, Operating costs 2,333 2,445 we have been able to cut back the average processing time to 2-3 weeks Results - - at year-end 2017, even though there was a change in the position of our specialists. After surveying our customers, we updated our website in 2017 so that it better reflects their needs. The website is now clearer and more focused on what users want. For instance, we have made it easier for producers to register their production plants. 13 CertiQ 2017 Annual Report


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    CertiQ operates under a mandate from the Minister of Economic Affairs The implementation agreement between CertiQ and the Minister of and Climate Policy. This means, among other things, that the minister Economic Affairs and Climate Policy was revised on 1 July 2017. This saw sets the tariffs, based on a proposal by TenneT/CertiQ. CertiQ prepares the maximum limit for received prepayments increased from EUR 750,000 the tariff proposal on the basis of a multi-year budget and requests to EUR 1.5 million. On the advice of the Participants Council, the minimum the advice of the Participants Council. limit remains unchanged at EUR 500,000. Increasing numbers of trans- actions and changes in the market could cause bigger fluctuations in The tariffs for the issuance, cancellation, import and surcharge for biomass the tariffs. To cover these fluctuations, CertiQ can now retain a bigger and heat were reduced in 2017 by 10% compared to 2016. The tariffs for ‘Prepayments received’ entry. export, transfer and issuance of grey electricity remain unchanged. It was necessary to reduce the tariffs in 2017, to prevent the entry ‘Prepayments Compared to 2016, operating costs decreased by EUR 112,000, primarily received’ from exceeding the maximum limit of EUR 750,000. because of lower amortisation costs for IT and lower personnel costs due to job vacancies. In part, these were offset by higher costs for training The following tariffs per MWh were applied in 2017: and hiring external staff. - Issuance of wind/hydro-electric/solar € 0,019 (€ 0,021 in 2016) - Issuance of biomass/heat € 0,043 (€ 0,048 in 2016) CertiQ works on a cost-recovery basis. Any difference between CertiQ’s - Cancellation € 0,019 (€ 0,021 in 2016) invoiced revenue and operating costs is cleared by adjusting tariffs in - Import € 0,019 (€ 0,021 in 2016) later years, which is recognised in the financial statements in the balance - Transfer € 0,008 (€ 0,008 in 2016) sheet under ‘Prepayments received’. - Export € 0,008 (€ 0,008 in 2016) For more detailed notes to the financial results, please refer to the financial The annual membership contribution per plant has been suspended for statements in chapter 4, notes 6 and 7. all producers. The annual membership fee for traders amounts to EUR 500. 14 CertiQ 2017 Annual Report


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    stakeholders' Commitment to CertiQ's sharpened strategic focus We formulated our strategic ambitions in 2017. These can only be achieved when there is a clear commitment for them among our stakeholders, including TenneT, the Ministry of Economic Affairs and Climate Policy, Netherlands Enterprise Agency and the Participants Council. Together, we will work on our strategic direction in 2018.


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    4 Financial statements 2017 Balance as at 31 December 2017, after appropriation of profits 17 Profit and loss account for 2017 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 2017, after appropriation of profits 22 Notes to the profit and loss account for 2017 25 Additional notes for 2017 27 Other information 28 Independent auditor’s report 29 (clickable table of content) 16 CertiQ 2017 Annual Report


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    Balance sheet as at 31 December 2017, after appropriation of profits (x EUR 1,000) Assets Ref. 31 December 2017 31 December 2016 Fixed assets 1 Intangible fixed assets 13 497 13 497 Current assets Receivables 2 Accounts receivable and other receivables 564 489 Associated companies 619 - 1,183 489 1,196 986 Equity and liabilities Ref. Equity 3 Paid-up capital 18 18 18 18 Long-term liabilities 4 Government investment subsidies - 1 To be settled in tariffs 1,060 740 1,060 741 Current liabilities 5 Accounts receivable 1 - Associated companies - 29 Prepayments received 1 127 Accrued liabilities 116 71 118 227 1,196 986 17 CertiQ 2017 Annual Report


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    Profit and loss account for 2017 (x EUR 1,000) Ref. 2017 2016 Revenues 6 Revenues 2,202 2,235 Other operating income 131 210 2,333 2,445 Operating costs 7 Wages, salaries and social security costs 828 868 Amortisation of intangible fixed assets 484 619 Other operating costs 1,021 958 2,333 2,445 Operating result - - Financial income and expenses 8 Interest received/paid - - Result - - 18 CertiQ 2017 Annual Report


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    General notes Nature of the business activities Principles for the valuation of the assets and liabilities The Executive Board of TenneT, the Dutch transmission system operator and administrator of the national high-voltage grid, has been mandated General by the Minister of Economic Affairs and Climate Policy to establish an The financial statements are drawn up in accordance with the provisions electronic certificate register. TenneT established CertiQ B.V. and appointed of Title 9, Book 2, of the Dutch Civil Code, and the Accounting Standards CertiQ’s senior manager on the basis of a sub-mandate to set up this for small legal entities, as published by the Dutch Accounting Standards system and implement the activities associated with it. CertiQ does this Board. The valuation principles are based on historical cost and cost price. by facilitating trade in sustainably generated energy through issuing and managing production certificates. Production certificates, such as GOs, are The amounts included in the financial statements are denominated in issued for the production of energy generated from sustainable energy EUR x 1,000. sources: solar, hydro-electric, wind, biomass and geothermal. Electronically issued GOs are the only valid proof in the Netherlands that energy has been Assets and liabilities are, in general, valued at the acquisition cost or generated in a sustainable manner. These certificates for sustainable energy manufacturing cost, or the actual value. may make the producer in question eligible for subsidies under the statutory scheme of the Stimulation of Sustainable Energy Production (SDE+). They Comparison to previous year can be traded nationally and internationally. On request, CertiQ can issue The accounting principles remained unchanged compared to those used production certificates for energy generated from non-sustainable sources. in the previous year. All shares in CertiQ are held by TenneT. Intangible fixed assets The intangible fixed assets are valued at the original acquisition cost or Estimates production cost, after deducting linear amortisation based on the asset’s In applying the principles and regulations for drawing up the financial economic life. Expected long-term loss of value at the balance sheet date statements, CertiQ’s management makes various assessments and estimates is taken into account. that may be essential for the amounts shown in the financial statements. Where the nature of these assessments and estimates must be disclosed to Each year at the balance sheet date, CertiQ assesses whether there are any offer the reader the level of understanding required under Article 2:362, indications that a fixed asset may be subject to an impairment. If such sub 1 of the Dutch Civil Code, the notes to the relevant entry in the indications exist, the realisable value of the individual asset is determined. financial statements explain the nature of the assessments and estimates, If it is not possible to determine the realisable value for the individual asset, including the corresponding assumptions. the realisable value of the cash flow generating unit of which the asset 19 CertiQ 2017 Annual Report


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    is part will be determined. Impairment exists when the book value of an Received government subsidies are included on the balance sheet. Each year, asset is higher than the realisable value; the realisable value is the higher an amount is included to reflect the economic lifespan of the assets of the net realisable value and value in use. The net realisable value is receiving a subsidy. determined with the aid of the active market. An impairment loss is directly recognised as a cost in the profit and loss account. ‘To be settled in tariffs’ is the difference between turnover billed and company costs. In accordance with the implementation agreement we If it is determined that an impairment accounted for in the past no longer have with the Ministry of Economic Affairs and Climate Policy, this amount exists or has decreased, the increased book value of the asset concerned can be between EUR 500,000 minimum and EUR 1500,000 maximum. will not be recognised for a value higher than the book value which This means that amounts must only be returned in the short term in would have been determined if the impairment of the asset had not tariffs insofar as they surpass EUR 1,500,000. The current entry ‘To be been accounted for. settled in tariffs’ will therefore be discounted through future tariffs in the longer term (more than one year). Current assets Upon initial entry, receivables are valued at the fair value of the consi- In the 2016 annual report we presented ‘To be settled in tariffs’ as deration. After the initial entry, trading receivables are valued at an a short-term liability under ‘Prepayments received’. We settled this amortised cost price. If payment on the accounts receivable is postponed in 2017 because a short-term liability suggests that the full amount under an agreement extending the payment deadline, its fair value is must be returned in tariffs in the coming year. Considering investments determined on the basis of the cash value of the expected receivables, in the years ahead, this is not the case. In future years, everything above and adjustments are made to the entry ‘Interest received’ in the profit EUR 1,500,000 would be considered a short-term liability however. and loss account. Provisions for bad debts are subtracted from the book value of the receivable. Current liabilities Current liabilities are in first instance valued at real value. Debts are valued Liquid assets at amortised cost price after initial processing. Liquid assets consist of bank balances with a term of less than twelve months and are valued at their nominal value. Current liabilities comprise the current part of the ‘Investment contributions’ and ‘Government investment subsidies’. Long-term liabilities Long-term liabilities consist of government subsidies and items ‘To be settled in tariffs’. 20 CertiQ 2017 Annual Report


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    Principles for the determination of the result Taxes Because CertiQ adjusts the difference between its invoiced revenue and Revenue operating costs in the tariffs of subsequent years, there can be no fiscal Article 29 of the Regulation on GOs for energy generated from renewable result. The tax to be paid is therefore nil at all times, as agreed with energy sources and on high-efficiency cogeneration electricity states the Dutch Tax and Customs Administration. the tariffs that apply to recover the costs related to GOs. The tariffs are set by the minister after approval by the Executive Board of TenneT and Financial instruments and risk management in consultation with the Participants Council. The difference between the actual costs and invoiced revenue is settled in the tariffs of subsequent Price risks years and recognised in the financial statements under the entry CertiQ is not subject to any price risks due to the fact that any surplus ‘Prepayments received’. or deficit is settled 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. risk is very 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 to Liquidity risks the reporting year to which they relate. The liquidity risks for CertiQ are minimal. CertiQ has a current account with TenneT. TenneT has no intention to make a claim on this current account, Amortisation of intangible fixed assets as TenneT has mandated CertiQ for certification and is sufficiently solvent. The amortisation of intangible fixed assets is determined in line with the asset’s expected economic life, using the linear method. Financial income and expenses Interest income and interest charges are allocated in proportion to time, taking into account the effective interest rate of the assets and liabilities to which they relate. 21 CertiQ 2017 Annual Report


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    Notes to the balance sheet as at 31 December 2017, 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 electronic certificate register (myCertiQ I), the sustainable As at 31 December 2015 3,182 - 3,182 heat system (myCertiQ II) and BO reporting (data warehouse) are recognised Capitalisations - - - under intangible fixed assets. An amortisation period of five years is Taken into service - - - applicable to myCertiQ II and BO reporting. The website was fully amortised As at 31 December 2016 3,182 - 3,182 in 2014, while myCertiQ I was fully amortised in 2017. MyCertiQ II and Capitalisations - - - BO reporting will be fully amortised in 2018. Taken into service - - - As at 31 December 2017 3,182 - 3,182 The book value of intangible fixed assets can be specified as follows (× EUR 1,000): Amortisations As at 31 December 2015 2,066 - 2,066 Amortisations for the year 619 - 619 As at 31 December 2016 2,685 - 2,685 Amortisations for the year 484 - 484 As at 31 December 2017 3,169 - 3,169 Book value As at 31 December 2015 1,115 - 1,115 As at 31 December 2016 497 - 497 As at 31 December 2017 13 - 13 22 CertiQ 2017 Annual Report


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    2 Receivables 4 Long-term liabilities Accounts receivable and other receivables Government investment subsidies Accounts receivable consist of all receivables with a remaining maturity In 2012, CertiQ received a subsidy of EUR 70,000 from the Ministry of of less than one year. As the credit risk is estimated to be negligible, Economic Affairs and Climate Policy for the preparation of the certification no provisions for bad debts have been deducted from this entry. system for renewable heat (myCertiQ II). An amount equal to the amortisation cost is released each year and allocated under the entry ‘Other operating Accounts receivable can be specified as follows (x EUR 1,000): income’. At the end of 2017, this entry amounted to nil. The current part is accounted for under current liabilities. The remaining term of the 2017 2016 government investment subsidies is less than one year. Accounts receivable 562 440 Receivables from TenneT - 49 To be settled in tariffs Other receivables 2 - This is the difference between turnover billed and CertiQ’s costs Total 564 489 (EUR 1,060,000) to be discounted for in future tariffs with market parties. The duration is more than one year. The tariffs are set annually by the Minister of Economic affairs and Associated companies Climate Policy after agreement with the management of TenneT This entry refers to the current account with TenneT. No interest is charged and consultation with the Participants Council. In accordance with on the balance of this current account with TenneT; the interest rate is nil. the implementation agreement we have with the Ministry of Economic Affairs and Climate Policy, this amount can be between EUR 500,000 3 Equity and EUR 1,500,000. This means that amounts must only be returned in the short term in tariffs insofar as the amount surpasses the Paid-up capital EUR 1,500,000 level. The authorised capital of the company amounts to EUR 90,000, divided into 900 shares of EUR 100 each. Of these shares, 180 have been issued and paid up. 23 CertiQ 2017 Annual Report


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    5 Current liabilities Accounts payable Accounts payable only comprise debts with a remaining term of less than one year. Prepayments received ‘Prepayments received’ are the short-term part of the government investment subsidies. The breakdown of the ‘Prepayments received’ entry is as follows: (x EUR 1,000) 2017 2016 Investment contributions - - 113 Government investment subsidies -1 - 14 Balance as at 31 December -1 - 127 Accrued liabilities These relate to annual leave to be paid and costs to be paid. Costs to be paid consist of: provisions for the annual report, training, hiring staff, consultancy services and process automation. 24 CertiQ 2017 Annual Report


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    Notes to the profit and loss account for 2017 (x EUR 1,000) 6 Revenue On the request of the Ministry of Economic Affairs and Climate Policy, with effect from 2015, CertiQ has set the tariffs for heat and biomass In the year under review, invoicing was done on the basis of pre-set tariffs. at a cost-neutral level, by introducing a surcharge for these two specific The amount needed to cover costs was EUR 2,333,000. The surplus of energy sources. This ensures that CertiQ can further specify revenue from EUR 320,000 was added to the entry ‘To be settled in tariffs’ on transactions by two types of work (× EUR 1,000): (the liability side of) the balance sheet. 2017 2016 Revenue Regular activities 2,232 2,276 The difference between invoiced revenue and costs will be settled with Extra work for heat and biomass 226 242 differences brought forward from previous years, recognised in the entry Total 2,458 2,518 ‘Prepayments received’. Revenue can be specified as follows (x EUR 1,000): Other operating income 2017 2016 Other operating income comprises the release of the investment contri- Memberships 64 54 bution for myCertiQ I in proportion to the amortisation of the asset for Transactions 2,458 2,518 which the investment contribution is intended and other income. Other To be settled in tariffs - 320 - 337 income consists of a contribution by the Ministry of Economic Affairs and Total 2,202 2,235 Climate Policy for operational activities relating to the certification of renewable heat and the release of the subsidy for myCertiQ II. In addition, CertiQ is paid compensation for activities undertaken for AIB. Revenue from transactions can be specified by type of transaction (× EUR 1,000): 2017 2016 Issuance of certificates 626 619 Transfers/import/export of certificates 886 880 Cancellation of certificates 946 1,019 Total 2,458 2,518 25 CertiQ 2017 Annual Report


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    Other operating income can be specified as follows (x EUR 1,000): The drop in personnel costs was the result of vacancies arising from CertiQ staff leaving to work with TenneT or external organisations. 2017 2016 Release of investment contribution Amortisation of intangible fixed assets 113 150 from myCertiQ I The amortisation of intangible fixed assets is lower in 2017 than 2016. Other income 18 60 The electronic certificate register was fully amortised in September 2017. Total 131 210 Other operating costs 7 Operating costs Other operating costs consist of costs for process automation systems, office premises, memberships, consultancy, an external auditor, training, Wages, salaries and social security costs travel and accommodation. Training is the main reason that other operating The company does not employ any employees but hires personnel costs increased. This increase was also partly due to the maintenance on from other parties. In 2017, this number amounted to: myCertiQ according to the budget. - hired from TenneT: 9,2 fte (2016: 10,1 fte); and - hired from third parties: 1,1 fte (2016: 1,2 fte). 8 Financial income and expenses Personnel costs can be specified as follows (x EUR 1,000): Interest received This entry is nil and relates to the interest received on the balance of the current account with TenneT. 2017 2016 Hired from TenneT 751 845 Hired from third parties 77 23 Total 828 868 26 CertiQ 2017 Annual Report


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    Additional notes for 2017 Off-balance sheet rights and obligations Events after the balance sheet date Together with TenneT Holding B.V. and its subsidiaries, CertiQ forms part No events have taken place after the balance sheet date that need of a fiscal entity for company tax and value added tax purposes. On the disclosing in these financial statements. basis of the standard conditions as issued by the Dutch tax authorities when the fiscal entity was established, CertiQ is jointly and severally Arnhem, 19 March, 2018 liable for the company tax and value added tax liabilities of the whole fiscal entity. C.C. Krijger B.G.M. Voorhorst Senior Manager CertiQ B.V. Chief Operating Officer TenneT TSO B.V. CertiQ has concluded three agreements to hire staff from other employers. These agreements concern: 1 the structural provision of legal advice, at a cost of c. EUR 44 thousand; CertiQ B.V. 2 the hiring of a consultant on biomass (term: January-August 2018), Utrechtseweg 310 at a cost of c. EUR 88,000; and 6812 AR Arnhem 3 the hiring of a support specialist (term: January-December 2018), The Netherlands at a cost of c. EUR 65,000. Chamber of Commerce 09122183 These three agreements (to hire staff from other employers) include agreed fixed hourly rates for the work done. 27 CertiQ 2017 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 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; and 4 a deficit may only be offset against the reserves prescribed by law to the extent permitted by law. 28 CertiQ 2017 Annual Report


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    Independent auditor’s report To: the management board and the shareholder of CertiQ B.V. (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations Report on the audit of the financial statements 2017 included in in the Netherlands. Furthermore we have complied with the Verordening the annual report gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics). Our opinion We believe the audit evidence we have obtained is sufficient and We have audited the financial statements 2017 of CertiQ B.V., based appropriate to provide a basis for our opinion. in Arnhem. Report on other information included in the annual report In our opinion, the financial statements give a true and fair view of the financial position of CertiQ B.V. as at December 31, 2017 and of In addition to the financial statements and our auditor’s report thereon, its result for the year then ended in accordance with Part 9 of Book 2 the annual report contains other information that consists of: of the Dutch Civil Code. - The management board’s report - Other information pursuant to Part 9 of Book 2 of the Dutch Civil Code The financial statements comprise: - The balance sheet as at 31 December 2017 Based on the following procedures performed, we conclude that the other - The profit and loss account for 2017 information: - The notes comprising a summary of the accounting policies and - Is consistent with the financial statements and does not contain other explanatory information material misstatements - Contains the information as required by Part 9 of Book 2 of the Basis for our opinion Dutch Civil Code We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are We have read the other information. Based on our knowledge and further described in the “Our responsibilities for the audit of the financial understanding obtained through our audit of the financial statements or statements” section of our report. otherwise, we have considered whether the other information contains material misstatements. We are independent of CertiQ B.V. in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening By performing these procedures, we comply with the requirements of inzake de onafhankelijkheid van accountants bij assurance-opdrachten Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. 29 CertiQ 2017 Annual Report


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    The scope of the procedures performed is less than the scope of those Management should disclose events and circumstances that may cast performed in our audit of the financial statements. significant doubt on the company’s ability to continue as a going concern in the financial statements. Management is responsible for the preparation of the other information, including the management board’s report in accordance with Part 9 of Our responsibilities for the audit of the financial statements Book 2 of the Dutch Civil Code and other information pursuant to Part 9 Our objective is to plan and perform the audit assignment in a manner of Book 2 of the Dutch Civil Code. that allows us to obtain sufficient and appropriate audit evidence for our opinion. Description of responsibilities for the financial statements 2017 included in the annual report Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit. Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of Misstatements can arise from fraud or error and are considered material the financial statements in accordance with Part 9 of Book 2 of the Dutch if, individually or in the aggregate, they could reasonably be expected Civil Code. Furthermore, management is responsible for such internal to influence the economic decisions of users taken on the basis of these control as management determines is necessary to enable the preparation financial statements. The materiality affects the nature, timing and extent of the financial statements that are free from material misstatement, of our audit procedures and the evaluation of the effect of identified whether due to fraud or error. misstatements on our opinion. As part of the preparation of the financial statements, management is We have exercised professional judgment and have maintained responsible for assessing the company’s ability to continue as a going profes-sional skepticism throughout the audit, in accordance with concern. Based on the financial reporting frameworks mentioned, Dutch Standards on Auditing, ethical requirements and independence management should prepare the financial statements using the going requirements. Our audit included among others: concern basis of accounting unless management either intends to liquidate - Identifying and assessing the risks of material misstatement of the the company or to cease operations, or has no realistic alternative but financial statements, whether due to fraud or error, designing and to do so. performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement 30 CertiQ 2017 Annual Report


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    resulting from fraud is higher than for one resulting from error, as fraud We communicate with management regarding, among other matters, may involve collusion, forgery, intentional omissions, misrepresentations, the planned scope and timing of the audit and significant audit findings, or the override of internal control; including any significant findings in internal control that we identify - Obtaining an understanding of internal control relevant to the audit during our audit. in order to design audit procedures that are appropriate in the circum- stances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control; Eindhoven, March 19, 2018 - Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures Ernst & Young Accountants LLP made by management; signed by P.A.E. Dirks - Concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern; - Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and - Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 31 CertiQ 2017 Annual Report


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    - - volgt nog Commitment of the CertiQ team to customers and energy transition At CertiQ, we put customers first and work towards a single goal: the certification of electricity and heat. In doing so, we ensure that consumers, market parties and governments can depend on reliable, transparent information on the origin of the energy they use and how it was generated. This information is vital in giving an insight into the progress of the energy transition.


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    Appendix: CertiQ works together with ... CertiQ has active partnerships with a range of stakeholders in The Authority for Consumers & Markets (ACM) the sustainable energy sector. Below are just a few of these. ACM is the regulator for the Dutch energy sector. The duties of this independent governing body include overseeing the correct implementation TenneT TSO B.V. of and compliance with the 1998 Electricity Act and statutory schemes TenneT TSO B.V., part of TenneT Holding B.V., is Europe’s first cross-border which are executed by CertiQ. electricity transmission system operator. With approximately 22,000 kilometres of high voltage lines and approximately 41 million end users Statistics Netherlands (CBS) in the Netherlands and Germany, TenneT ranks among the top five grid CertiQ sends statistics to CBS on the electricity generation it has certified operators in Europe. TenneT’s focus is to develop a north-west European on a monthly basis, in accordance with an agreement concluded between energy market and to integrate sustainable energy. Under a mandate of TenneT/CertiQ and CBS. CBS incorporates this data in its publications. the Minister of Economic Affairs and Climate Policy, TenneT established the electronic certificate register for sustainable energy. CertiQ manages The Association of Issuing Bodies (AIB) this system, which is linked to TenneT’s electronic infrastructure, on AIB is an international partnership of energy certification system admini- behalf of TenneT. TenneT is the only shareholder in its subsidiary CertiQ. strators, of which CertiQ is a member. AIB members issue GOs (that can be traded internationally). AIB seeks to standardise certification systems The Ministry of Economic Affairs and Climate Policy to facilitate international trade. To that end, it has developed a common The Ministry of Economic Affairs and Climate Policy is responsible for such standard: the EECS® Rules. In its Renewable Energy Directive of 2009, matters as policymaking in relation to sustainably generated electricity. the European Commission has made many elements of the EECS CertiQ consults regularly with the ministry to align its policies regarding Standard mandatory. developments that affect CertiQ. Regional grid operators The Netherlands Enterprise Agency Regional grid operators are responsible for the transmission of electricity The Netherlands Enterprise Agency implements government policies on over the public electric grid. In relation to CertiQ, the grid operators are innovation and sustainable development and is part of the Ministry of responsible for assessing applications to register production plants and Economic Affairs and Climate Policy. The Netherlands Enterprise Agency for periodically submitting electricity metering data to CertiQ. manages, among other things, the SDE+ subsidy scheme. This subsidy for the generation of renewable energy is paid based on the GOs issued by CertiQ. 33 CertiQ 2017 Annual Report


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    Metering companies The Participants Council Metering companies are responsible for installing and maintaining meters, CertiQ established the Participants Council to ensure the best possible collecting the data for heat and electricity from the meters and submitting alignment with the needs of its participants. Its members represent the this information to the regional grid operator or CertiQ. interests of all participants in the E-certification system. The Participants Council comprises producers, traders and representatives of several large Producers energy suppliers. In drawing up its annual plan, CertiQ explicitly considers Producers generate electricity or heat and supply it to a grid or consume the Council’s advice. it on-site. CertiQ certifies the energy generated in order to make the origin of the energy transparent and traceable. CertiQ issues GOs for sustainable Auditors electricity and heat. CertiQ also voluntarily issues so-called ‘labelling Each year, independent auditors retrospectively audit which fuels have been certificates’ for electricity from non-renewable sources. used by producers with biogas and/or biomass plants to generate energy. These audits provide additional assurance regarding the origin of renewable Traders energy. Traders enter into agreements with producers for the purchase of GOs or other certificates. A producer informs CertiQ of the trader it does business Consumers with. CertiQ credits the corresponding certificates to the account of this You can’t tell whether the electricity coming from a wall socket is from trader. A trader can trade the certificates or use them as proof of supply a renewable source or not. CertiQ’s GOs provide consumers with reliable to end users. and transparent information on where their energy is from and how it was generated, thereby enabling them to make an informed decision Energy suppliers on the energy they buy. Energy suppliers are companies that purchase energy (including grey and green electricity) and sell it to commercial and private users. As such, European Commission it is the energy supplier who has the supply contract with the customer. The European Commission executes community policy and as such is Every energy supplier in the Netherlands that wishes to supply green responsible for implementing legislation relating to GOs. The legislative electricity must have a certificate account with CertiQ. process for the Renewable Energy Directive II started last year, and EU institutions are expected to reach agreement on this new directive in 2018. 34 CertiQ 2017 Annual Report


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    European Commission sets directives for GOs Ministry of Economic Affairs ACM and Climate Policy oversees the decides the rules in NL implementation for GOs of the rules in NL AIB facilitates international trade CBS TenneT publishes statistics on CertiQ’s parent company sustainable energy and the national grid operator in NL Traders Suppliers Consumers trade nationally and cancel GOs as proof use (sustainable) internationally in GOs of energy supplied energy Producers Metering companies Grid operators CertiQ produce measure the collect production - issues GOs for energy and (sustainable) energy production of energy data for electricity - collects data for subsidies and statistics Netherlands Enterprise Agency issues production Auditors subsidies (SDE+) verify the use of biomass Participants Council represents the interests of producers, traders and suppliers 35 CertiQ 2017 Annual Report


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    Address CertiQ B.V. is a subsidiary of TenneT TSO B.V., the Dutch transmission system operator and grid operator of the national electric grid. CertiQ B.V. Utrechtseweg 310 6812 AR Arnhem Postbus 718 6800 AS Arnhem The Netherlands +31 (0)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 Translation Stampa Communications, Amsterdam Published March 19, 2018 36 CertiQ 2017 Annual Report


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