Guarantee of Origin price rise ‘could fund major investment in renewables’

Increasing demand for Guarantees of Origin (GO) could raise half the funding needed for Europe’s investment in clean power, according to Ecohz.
The company, which says its aim is to help organisations use clean power and create new renewable energy capacity, believes continuing demand for GOs will support their price and provide up to €57 billion to invest in the new green electricity the EU needs to reach its 2030 climate goals.
Ecohz says that the price of GOs, the certificates used to document renewable energy consumption in the EU, grew from reached €1.7/MWh in January 2022 to €9/MWh at the end of the year. Although it fell back to €7/MWh at the beginning of 2023, Ecohz says its analysis conservatively estimates that the price of GOs will not fall to its level a year ago but will average €5.5/MWh towards 2030, driven by a growing consumer base. It says over the year robust and growing demand, coupled with the cumulative effects of war in Ukraine, a dry summer, and stricter corporate ESG criteria, has driven up prices and “consumers’ willingness to pay for documented renewable energy, despite rising costs, is expected to hold certificate prices well above historic levels, creating a revenue stream that can accelerate Europe’s decarbonisation efforts substantially”.
The EU’s Fit-for-55 policy package establishes a goal of 55% emissions reduction by 2030, which implies adding around 870 TWh of annual clean power production. Ecohz says that now the cost of installing 1 MW of wind or solar is €1 million and between 2023 and 2030 GOs could raise €57 billion for renewable electricity producers, if it was used to raise finance with gearing if 75%.
In that case, based on an average of 2000 operational hours yearly for wind and solar technology, new renewable electricity generation partially financed by GO income could amount to 458TWh per year, close to half of the additional renewable energy production the EU needs to reach its 2030 targets.