GO prices in Italian auction remain above OTC prices

Thursday, 21 March 2019

The GSE has announced the outcome of the auction session on 20 March 2019 for the assignment of the Guarantees of Origin (GOs). The GOs auctioned by the GSE are related to production from March to December 2018.

Prices for all GOs have decreased by an average of 40% from the previous auction in January 2019. Nonetheless, prices from the Italian auction were considerably higher compared to Over-The-Counter (OTC) prices. The median auction price of Italian Wind GOs was 77.5 Eurocents above the current OTC price for EU wind, while auctioned Hydro GOs were sold 50.5 Eurocents above generic Nordic Hydro GOs.

Our market information indicates that there was substantially more demand for Hydro and Solar GOs (total bid volume) than what was offered while Biomass received very few bids in the auction held by GSE.

A contributor to the price divergence could have been driven by demand from UK for FiT/CfD exempted GOs and corporate buyers. Higher auction prices also signal that there might be room for a price increase in the OTC markets. The next GO auction by GSE is scheduled for the 20 June 2019.

Source: GSE