The Market of Guarantees of Origin (GO) has delivered stable prices during its longest period ever if we exclude the early stages where the certificates were not worth much more than their administrative inception costs.
We have now experienced around 7 months with AIB Renewable GOs at around €7. The volatility has even significantly decreased since March 2023, emphasising the level where the market values a renewable guarantee of origin.
We see this as a sign of maturity of this young market of attribute certificates because the buying forces seem to match the selling ones, until further notice, of course.
Some confusion might also be responsible for this stabilisation. After having fought a few battles, the bears and the bulls seem to want to take some distance and reassess their position. There are a few reasons to believe this stalemate.
First, it is reasonable to rest after a long period of very high volatility, which saw a wide price range going from €1.70 to €9.00, not so long ago (see graphic below). Secondly, there seems to be a shared satisfaction across the continent with the current valuation of the GOs. It is indeed crucial for both buyers and sellers to deal with a product that is worth something, to incentivise fresh investments into new renewable production facilities in the one hand, and to give value to the renewable assets on the other hand. Then came the confusion: the Association of Issuing Bodies suspended all exports of Icelandic GOs in April due to allegations of double counting of certificates, one of the worst nightmares of the EAC scheme. The companies who had acquired Icelandic GOs are now wondering if they are in trouble, and Iceland’s producers are also holding their breath until AIB, and the registries find a solution. As terawatt-hours of the product have been exchanged, no one seems willing to bet on the next direction of the market. The fourth reason for this stability of confusion is given by contradictory fundamentals, such as higher rainfall versus small snowpack across the continent.
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