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
โ Most predictions materialized, especially regarding March 31st disclosure deadline activity
โ Record Norwegian cancellations show market progress with 22 TWh more domestic consumption ๐ณ๐ด
โ Pricing remained sideways despite high volumes and record cancellations
โ Geopolitical factors and defense priorities temporarily overshadowing sustainability initiatives
Critical Supply Dynamics
โ 47 TWh renewable underproduction silently reducing market oversupply ๐
โ Nordic hydro reservoir levels have less market impact than commonly believed
โ Rapid value decline of 2024 GOs problematic for remaining holders
โ Germany's June deadline creates final window for 2024 GO consumption ๐ฉ๐ช
Demand Outlook and Market Sentiment
โ Forward prices historically low at โฌ1+ despite continued interest
โ CSRD scope reduction from 50,000 to 10,000 companies impacting price modeling ๐
โ Potential hydrogen regulation relaxation could significantly boost GO demand
โ Voluntary GO adoption in Iceland signals sustainable demand growth
Strategic Considerations
โ Why some people are considering leaning toward 30% forward volume hedging ๐
โ Market's contango state reflects confidence in long-term improvement
โ Country-specific vintage rules create arbitrage opportunities in Estonia and Italy
โ Energy-intensive industry incentives creating new demand sources across Europe โ๏ธ
Stay informed with our quarterly market updates to navigate the evolving GO market landscape!
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