RES GO vs electricity price ratio reaches record high levels

Monday, 30 April 2018

Following the sharp price increase of RES Guarantees of Origin (GOs) in the wholesale market, the GO-electricity price ratio has reached 3.0%, which is 30 times higher compared to 2014. This results in more GO income for RES-E producers, and a higher relevance of GOs for all stakeholders, including utilities and traders.

In the above charts, we illustrate the Nordic hydro GO price and the German electricity spot price (data from Energidataservice.dk). Germany is the largest RES GO consumer from 2011 to present. Right after the Fukushima earthquake in 2011, the GO price rose above 0.5 EUR/MWh for a short while. The price of GOs corresponded to approx. 2% of the electricity price in Germany. This ratio kept decreasing until late 2014 when it bottomed out at 0.1%. The price of GOs has continued its upward trajectory ever since. While we can attribute the early 2016 price spike to abrupt policy changes in the UK, we have found no external stimuli for the current price increase since November 2017.