Every year, the eyes of the Guarantees of Origin (GOs) market participants are turned, among others, to two key elements: the dynamics of the supply and the demand side.

The equilibrium between these two is crucial when determining the momentum of both GO buyers and sellers acting. The year 2022 illustrated it well: Concerns about GO supply patterns - notably on the Hydro GOs representing around 60% of the supply side - require active management of GO portfolios and revisiting sales and purchase decisions by market participants. In 2022 market prices increased from a level of 1.7 EUR/MWh in January to 3.5 EUR/MWh in the summertime and further to a high of 10.0 EUR/MWh at end of November before dropping to around 6.5 EUR/MWh until the end of the year. Getting closer to the disclosure deadline (in most EECS countries) by 31 March, prices for the 2022 production oscillated between 5.5 and 7.5 EUR/MWh, reaching up to 8 EUR/MWh at the beginning of March 2023, before ending the month at 7 EUR/MWh. The price volatility within the GO market remained high with prices sometimes gaining/losing 1 EUR/MWh in only a day.

The price movements for the 2022 GO contract were to large extent driven by lower GO supply resulting from dry weather conditions and thus lower 

. Norway and Sweden, with their large storage capacity and Nordic Hydro GO being the leading product in the GO market, encountered reduced inflows into their reservoirs throughout the year until November (-13% compared to normal levels). Simultaneously, these countries also experienced high outflows at the end of 2021 as hydro power producers aimed to take advantage of increasing power prices. Southern European countries, including Spain, France, and Italy experienced a drought during the summer season, resulting in a 30% decline in reservoir levels. It was not until late December (Week 51) that levels returned to their historical norms.

In our GO supply side analysis, we focus on an End Of the Year (EOY) GO Balance forecast and a more fundamental oriented Year-To-Date (YTD) GO Balance projection. The EOY Balance product is our forecast of GO supplies in the EECS market by the end of the year, with technology, country, and monthly granularity. You can find more information on the EOY Balance product 

. The YTD Balance is slightly different: we do forecast GO supplies for a given year, but we stop the forecast by when the data is calculated.

What we release with today’s YTD GO Balance Report only includes the first three months of the year 2023.

 It is more a synthetic forecast than a forecast 

 since we have electricity generation data (which we don’t yet have for April, May, etc.) and did not include any AIB data (available until January 2023, but rather incomplete for this month). The YTD balance granularity allows a good understanding of the current status of the GO supply tectonic plates and for tracking, on a monthly basis, the sometimes unpredictable (or predictable but not reassuring) trends in GO issuances in comparison to previous years of GO supply.

So, let us see how the GO supply situation in the EECS market has been so far and how we estimate GO issuances for the first quarter of the year 2023.

04-2023 YTD Balance graph

We predict that the first quarter of 2023 will provide the market with around 183 TWh of GOs, compared to 196 TWh in 2022 (AIB data). This would lead to an accumulated deficit of 13.3 TWh [1] by the end of the first quarter in 2023. Furthermore, if we compare this overall (all countries and technologies included) forecast with 2021 figures, the deficit increases to almost 20 TWh.

Spoiler alert: this shortfall is mainly contained by a large decrease in the wind electricity generation in February, resulting in a 7.3 TWh deficit in GO supply for this month (with 2.7 TWh being missing in France only).

04-2023 YTD Balance map

After calculating and considering all renewable technologies, only eight out of the 24 countries [2] would increase their issuances in Q1 2023 compared to 2022: Austria, Belgium, Croatia, Finland, Hungary, Latvia, Lithuania, Portugal, and Slovenia. However, these countries only make up 17.8% of all issuances in Q1 2022, and their small increases are not sufficient to counterbalance the large drops expected from the top issuers in Q1 2023 compared to Q1 2022. Spain, France, and Netherlands are the three countries lagging the most behind with the year-to-year performance, the three of them together accumulating a 10.3 TWh deficit (-23%). 

Four out of the five top issuing countries in Q1 2023 remain the same as in 2022, including Norway, France, Sweden, and Italy. The fifth one is Finland which took the Austrian seat. It is worth noting that their combined share (of the five biggest issuers for every given year) comes back to Q1 2021 levels, from 63% in 2021 to 61.8% in 2022 and 63.8% in Q1 2023. This reliance upon only a few countries for almost two-thirds of the supply is even higher for certain technologies (Biomass, for example, where 82% of forecasted Q1 2023 issuances were generated by five countries). In the case of Hydro, the equilibriums stay the same: Norway is still far ahead (in absolute values and percentage), and five countries represent 77% of Q1 2023 issuances.

04-2023 YTD Balance table

If we keep the focus on Hydro, we note that there is no deficit, but a marginal increase in Q1 2023 when compared to Q1 2022 (if we exclude Iceland from 2022 data): our forecast is at 96.6 TWh for Q1 2023 while Q1 2022 recorded 99 TWh (95.7 without Iceland) of Hydro GOs. Despite this, the long-time largest Hydro GO issuers (Norway, France, and Sweden) are falling behind their 2022 numbers, by a few GWh. The ramping-up comes from smaller Hydro countries, such as Croatia (+ 0.58 TWh), Latvia (+ 0.68 TWh), and most notably Portugal (+ 3.16 TWh).

All in all, the first quarter of 2023 hasn’t, according to our predictions, met Q1 2022 figures, which were already lower than in Q1 2021. Major issuing countries (Norway, France, and Italy, exception begin made of Sweden) see their overall supply cut, partially compensated by a good ramping-up of historically smaller issuing countries (Belgium, Croatia, Latvia, and Portugal).

This report provides a snapshot of what our model forecasts to be issued for the first quarter of the year 2023, and we will reiterate the exercise by the beginning of Q2, therefore providing a good understanding of issuances for the first half of the year.

We intend to release our YTD GO Balance report for the second quarter of 2023 by the beginning of July and our first version of the EOY GO Balance for the whole of 2023 by the beginning of May 2023.

The YTD GO Balance report will soon replace the EOY GO Balance in the ‘Fundamentals’ section, the EOY being moved to the ‘Forecast’ one.

Our GO Long-Term forecast (up until 2040), including prices, supply, and demand is still available. You can read our publication 

 and request a demo to get access to it by writing to 

[1] It would be 8.5 TWh if we exclude Iceland from the dataset, as we have values for 2022 but no forecast for 2023 for this country.

[2] We have 25 countries in the dataset, but 24 if we take Iceland out.

Market Report

YTD GO Balance Report 2023

Related reading

Week 21: Auction 35 settles at second-highest price in program history

Week 21: CORSIA-eligible credits fall below USD 1.00/t while efforts to ensure high integrity continues

Week 21: RGGI benchmark contract settles at a near 5-month high this week

GO Week 21 Overview - Mixed week amid low activity

Week 21: Breach of technical support opens room to the downside

Over-the-Counter Wholesale Carbon Credit Price

RED: what did not change for guarantees of origin?

Global standards for biomethane I-RECs to be developed

Union database – New provision in Renewable Energy Directive

EUA price forecast for H2 of 2023: Anticipation of future shortage will continue to bolster prices

May 2023 HUPX Pan-European auction

Bulgarian power exchange IBEX plans GO trading platform by end of 2023

Headquarters - Oslo

Berlin office