GO price rebound – May 2020

RECS International, the organisation which coordinates the industry of renewable electricity in Europe, reluctantly had to cancel the annual RECS Market Meeting due to the epidemic or Covid19. This was a blow for the organisers and all participants who see this event as a family reunion and the best opportunity to focus on the topic of Guarantees of Origin (GOs), and more broadly: Energy Attributes Certificates (EAC).

The market of EACs is currently experiencing a mutation from its niche to a proper traded market. The volume growth remains steady in double digits over the years, and we see constantly new corporations joining the game. Governments in Europe have also ruled towards more use of EACs as the right way to trace and manage the origin to energy consumption.

The price of GOs, the backbone product for energy tracking, has suffered a crash last year, when countries such as France started adding all its subsidised energy production on the offer side via auctions. This was heavy for a young market. The GO prices lost their gains and were back at levels of 2017. This was bad news for investment in renewable energy and the general credibility of the scheme.

But it also occulted during a moment the most important fundamental information about the EAC market: the rise of the demand. This demand is not a typical demand of any product. The demand for EAC is a solid, generational, and fundamental movement. It is growing rather inelastically from the health of financial markets with addition of 50 to 60 TWh every year across the continent, just because people want to consume renewable energy.

This was discussed during the Webinar organised on 18 April by RECS international and consequently, prices surged three weeks in a row to 50% higher levels. This should invite more offer to sell and temper the move, but one thing is certain: no one disputed the convincing increase of demand in Europe for EACs.

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