“The only way is up” was a good title at the beginning of this month. October has indeed seen the fastest ever price increase for guarantees of origin (GOs) in a month: +€1.75 to reach €5.95 on the 31st.
After such a rally, it is tempting to quote again “The only way is up” as the sentiment in the renewable energy world as well as in the Energy Attributes Certificates (EAC) markets is simply and constantly bullish. European current geopolitics also encourage this direction towards building more renewable energy plants.
The drought has kept hydro reservoirs on lower-than-normal levels, forcing Scandinavian hydro producers to purchase GOs as well. There was not much hydro to be seen on the offer. The other technologies managed to sell well too, and the demand kept coming. The demand for EACs is certainly higher than ever. Sustainability ambitions from the corporate world and expectations of rating agencies push companies to buy green energy. The attribute certificate is not the worry; the energy price is, at this moment. So, we saw a confident demand in the GOs market.
Is this going to continue at these levels? The sentiment says “yes”. The demand is there. The offer seems shy compared to the theoretical surplus of GOs that the Association of Issuing Bodies statistics have shown. As long as no strong seller takes action, the bull run seems resilient. But if AIB comes up with new numbers displaying scarcity of certificates, then that hike will become unstoppable.
A price signal for renewable energy investments was demanded. October has delivered one. RE100 has confirmed its support for new generation capacities. Let’s hope that this brings the expected consequences: more green investments, sooner.
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