Guarantees of Origin: European prices set to remain moderate medium term

The European Union’s 2009 Renewable Energy Directive (RED I) established Guarantees of Origin (GoOs) as a mechanism for certifying renewable electricity generation. They are an additional revenue component for renewable power projects, generating incremental income above the underlying value of the electricity. 

While Europe’s GoO market has seen robust activity in recent years ‒ propelled by ambitious decarbonisation policies, corporate demand for credible emissions reductions and a willingness to pay a premium for low-carbon products and services ‒ it remains fairly opaque, as most transactions are conducted over the counter or bundled into power purchase agreements (PPAs). 

The Guarantees of Origin price outlook for 2026

Wood Mackenzie expects GoO prices to settle above current levels, but remain in a moderate range. 

Upward price pressures are likely to come from a number of sources: increased electrification; ever-growing data centre power demand; greater price cannibalisation; and renewable supply-chain tensions, which are likely to affect the levelised cost of electricity (LCOE). Regulatory issues could also boost GoO prices, including increased corporate disclosure requirements; windfall taxes and revenue caps; the withdrawal or reduction of subsidisation; and national limitations on supply. 

Countering this, certain developments in the power sector are likely to rein in price growth: the expansion of renewables, increasing GoO supply; a slowdown in economic growth, curtailing demand; a delay in decarbonisation ambitions and the prevalence of greenwashing practices; and a lack of end-user or consumer willingness to pay for green products or services. 

The price outlook suggests sustained flows from the Nordic countries and Southern Europe to the Northwestern ones. Norway and Spain are positioned to lead the region in terms of GoO supply, with significant low-cost exports to other countries. 

GoO demand (calculated as a percentage of total electricity consumption) mostly originates from Germany, France and Italy, which are expected to be net importers. Meanwhile, Denmark and the Netherlands are likely to see a shift after 2035 as domestic supply is outpaced by the availability of cheaper GoOs from other European countries. 

Overall, hydro and onshore wind are the main issuing technologies. Solar is less important, due to higher bids, underpinned by cannibalisation (and as distributed generation is not granted any GoOs). Offshore wind plays an insignificant role, signalling the need for sustained public support mechanisms for the technology. 

Our analysis includes alternative GoO demand growth scenarios. Under base case scenarios (where GoO appetite is close to actual levels), forecasts suggest that market prices will remain moderate in the 2030s and 2040s. By the 2050s, however, prices will decline significantly as supply growth surpasses demand. 

Learn more about the European Guarantees of Origin price outlook

For more details, purchase our full European Guarantees of Origin price outlook report (also available in Wood Mackenzie Lens Power & Renewables; our premium solution that delivers interconnected intelligence across the global power value chain).