(Montel) The high filling levels of hydraulic reservoirs across Europe are expected to maintain downward pressure on the prices of guarantees of origin (GO) in the short and medium term, according to a new report from the analysis firm Icis published on Monday .
The strong production of renewable energy contributed to the record surplus of guarantees of origin this year, underlines the firm.
“In the short to medium term, prices for guarantees of origin are expected to remain low, as hydraulic stocks in Nordic and southern Europe are expected to end the year well above historical averages,” the report said. .
Hydroelectric certificates of origin represent 62% of all renewable GO produced since 2019.
“We anticipate that the volume of surplus guarantees of origin will reach its highest level this year since the system was put in place,” says Icis, who specifies that this projection is based on monthly emissions and cancellations data. of the last five years.
European hydroelectric guarantees of origin for 2024 are trading at EUR 0.45/MWh, compared to EUR 5.10/MWh last year, and a record of EUR 10/MWh reached at the end of 2022.
Norway's retention in the GO market has exerted additional downward pressure on the prices of these certificates, due to its significant renewable energy production which contributes to creating a surplus of supply.
Fragmented market
The report also highlights the increasing fragmentation of the European market and regulatory frameworks.
“Different rules in each country and the lack of a single market add to price and supply uncertainty,” and these discrepancies could lead to price disparities as well as increase market volatility, possibly we read in the report.
“Buyers may overpay or undervalue these guarantees due to a lack of visibility into overall market trends,” says Icis, noting that this also complicates the ability of market participants to predict the costs of deploying the guarantees. renewable energies.
