The trading prices for European guarantee of origin (GO) prices would likely to range from EUR 6/MWh to EUR 8/MWh this year, Norwegian market intelligence firm Greenfact said in a report on Thursday.
Hydropower generation was likely to rebound this year, said Thomas Eccard, green power lead at Greenfact, at a webinar hosted by trading platform Enmacc, during which the report was released.
The benchmark Nordic hydropower Cal 23 contract was trading between EUR 7/MWh and EUR 7.30/MWh this week.
GO prices hit record highs at around EUR 10/MWh last year amid a supply shortage caused largely by a summer drought in Europe that reduced hydropower production.
A lot of snow cover in the Nordics could see more water coming down to reservoirs and a “totally different year than 2022,” said Eccard.
Demand for certificates has increased in recent years as companies seek to decarbonise their operations.
However, it was “more difficult to anticipate the behaviour of different market participants,” Eccard added.
GO demand could increase as EU countries introduce full-disclosure legislation, he said. This requires certificates to be issued for all energy production, not just renewables.
It would “ensure a level playing field between renewable and non-renewable electricity sources, as well as transparency and credibility of the production and consumption,” the report said.
The legislation has already been applied in the Netherlands, Austria and Switzerland.
“We see the push for green power by corporate consumers as the tipping point in the supply-demand balance of the European GO market in 2023,” Greenfact analysts said in the report.
Other bullish factors include European regulation on sustainable taxonomy and reporting, legislation that advocates the use of GOs by energy-intensive industries, and increased electrification, the report added.