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 represent an additional revenue component for renewable power projects, generating incremental income above the underlying value of the electricity and increasingly forming part of corporate renewable procurement strategies.

As power buyers and investors navigate a more complex procurement landscape, understanding the value of both electricity and associated certificates has become increasingly important. GoOs are often traded over the counter or bundled into power purchase agreements (PPAs), making pricing dynamics difficult to observe and quantify.

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. Most transactions are conducted privately or embedded within PPAs, meaning market participants must assess certificate value alongside evolving contract structures and procurement strategies.

The Guarantees of Origin price outlook to 2060

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

Upward price pressures are likely to come from several sources: increased electrification; growing power demand from energy-intensive sectors such as data centres; greater price cannibalisation during periods of high renewable output; and renewable supply-chain tensions that may affect the levelised cost of electricity (LCOE).

Regulatory developments could also support prices. These include increasing corporate disclosure requirements, windfall taxes and revenue caps on generators, the withdrawal or reduction of subsidy regimes, and national limitations on certificate supply.

Countering these trends, structural developments in the power sector are likely to rein in price growth. Rapid renewable deployment will continue to increase the volume of certificates issued, while slower economic growth could dampen demand. Delays in decarbonisation ambitions, greenwashing concerns or limited willingness among end-users to pay a premium for green products may also moderate price growth.

The price outlook suggests sustained flows from the Nordic countries and Southern Europe to Northwestern markets. 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) is concentrated in Germany, France and Italy, which are expected to remain net importers. Denmark and the Netherlands are likely to see a shift after 2035 as domestic supply is outpaced by the availability of cheaper GoOs from elsewhere in Europe.

Across issuing technologies, hydro and onshore wind dominate certificate supply. Solar remains less prominent due to higher bids driven by price cannibalisation, while distributed generation typically does not receive GoOs. Offshore wind plays only a limited role, highlighting the continued importance of public support mechanisms for the technology.

Our analysis includes alternative GoO demand growth scenarios. Under base case assumptions, where corporate appetite remains close to current levels, market prices are expected to remain moderate through the 2030s and 2040s. By the 2050s, however, prices are likely to decline significantly as certificate supply growth outpaces demand.

Learn more about the European Guarantees of Origin price outlook

For more detail, explore Wood Mackenzie’s European Guarantees of Origin price outlook to 2060. The analysis is available in Wood Mackenzie Lens Power & Renewables, which provides integrated insights into renewable power procurement across Europe.

Within the platform, users can assess the value of GoOs alongside power pricing and evolving PPA structures, enabling a more complete view of renewable procurement strategies. The solution combines certificate price forecasts with detailed PPA pricing insights, allowing users to evaluate bundled versus unbundled certificate strategies and quantify potential GoO revenue streams for renewable projects.

The analysis is underpinned by Wood Mackenzie’s bottom-up power market modelling across 15 European markets, capturing technology-specific capture rates, weather-driven generation patterns and policy developments. This integrated approach helps market participants benchmark fair value, understand regional price dynamics and navigate an increasingly complex renewable procurement landscape.