As we enter Q2, we examine the key factors influencing the European Guarantees of Origin (GO) market while evaluating our Q1 predictions.
Looking Back at Q1 and Assessing Our Predictions
→ Most predictions materialized, especially regarding March 31st disclosure deadline activity
→ Record Norwegian cancellations show market progress with 22 TWh more domestic consumption 🇳🇴
→ Pricing remained sideways despite high volumes and record cancellations
→ Geopolitical factors and defense priorities temporarily overshadowing sustainability initiatives
Critical Supply Dynamics
→ 47 TWh renewable underproduction silently reducing market oversupply 📉
→ Nordic hydro reservoir levels have less market impact than commonly believed
→ Rapid value decline of 2024 GOs problematic for remaining holders
→ Germany's June deadline creates final window for 2024 GO consumption 🇩🇪
Demand Outlook and Market Sentiment
→ Forward prices historically low at €1+ despite continued interest
→ CSRD scope reduction from 50,000 to 10,000 companies impacting price modeling 📋
→ Potential hydrogen regulation relaxation could significantly boost GO demand
→ Voluntary GO adoption in Iceland signals sustainable demand growth
Strategic Considerations
→ Why some people are considering leaning toward 30% forward volume hedging 📊
→ Market's contango state reflects confidence in long-term improvement
→ Country-specific vintage rules create arbitrage opportunities in Estonia and Italy
→ Energy-intensive industry incentives creating new demand sources across Europe ⚙️
Stay informed with our quarterly market updates to navigate the evolving GO market landscape!
#GuaranteesOfOrigin #RenewableEnergy #EnergyMarkets #Sustainability
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