The pricing of green energy may need rebalancing if growth in demand for renewables across the European market continues to outpace the growth in supply.
According to figures published in a report from the Association of Issuing Bodies (AIB), demand for renewable energy in Europe – that is tracked and documented with guarantees of origins (GOs) – grew at a rate of 11.7% in 2019, an increase of 61TWh from 2018 levels.
ECOHZ managing director Tom Linberg said: “The growth in the supply of renewable energy tracked and documented with GOs during the same period is estimated to be only 3.5%, resulting in a significantly smaller surplus in 2019 than previous years.”
Spain has the highest growth in GO demand with 38%, followed by France (26%) and Germany (10%), the latter having been the first country to pass the 100TWh mark in 2019
The UK is not a member of the AIB and uses the Renewable Energy Guarantees Origin (REGOs) scheme, although the report found that the UK is still impacting the supply and demand balance across the European market.
The UK currently allows for the import of GOs to the European Energy Certificate System Standards (EECS GOs). Demand has grown year-on-year with the European markets ramping up – export volume is around 20% of the UK’s total import volume.
Due to different reporting schemes adopted, the statistics could be skewed, however, ECOHZ believes the positive trend could lead to a “healthy” price market in 2020.
There are some uncertainties which could impact pricing and surpluses going forward, such as Brexit uncertainty, clarity on the UK policy for GO imports and REGO exports and the Coronavirus pandemic.
With the UK declaring a carbon net zero target of 2050, there has never been a better time to look at renewable energy sources for your business.
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