Now that the compliance deadline for the 2005 obligation has been passed (31st of March), suppliers have started to secure some volume for their obligations for March 2006. In the past period, market players waited for the market to turn, but as prices are now slightly rising, some new sellers have stepped in. Another explanation for these increased trade market developments is that currently several new large power deals are being closed, which also includes the supply of Elcert certificates.

For the coming period, no further substantial price rises are expected. As a matter of fact, the level of over-supply in the Swedish Elcert market is still very high (the excess supply amounts to about five million MWh) due to the possibility of banking.

Guarantees of Origin and RECS
Compared to last month, there are no substantial changes in the trade markets for RECS certificates and Guarantees of Origin (GoO). There has been some offering of GoOs from Dutch biomass and wind production, but due to a lack of demand, little trade has taken place. Hydropower certificates are offered on the market for about 0.20 – 0.30 euro/MWh, wind and biomass for 0.60 – 0.80 euro/MWh. However, it is uncertain whether these premiums can be passed on to end customers.

Green certificates in Flanders
In Belgium, Flanders has its own separate green certificate market. Import from or export to Wallonia or other EU countries is currently not possible, although there are some early initiatives for standardization with Guarantees of Origin.

Energy suppliers in Flanders are obliged to supply part of their power sales from renewable sources. For 2005, the obligation is 2.5%. This share will increase to 6% in 2010. Each year on the 31st of March, the suppliers must redeem their green certificates for their obligation to the Flemish regulator (‘VREG’). The penalty for not fulfilling the obligation is 125 euro/MWh.

Monthly average certificate prices started at around 60-70 €/MWh at the start of the system in 2002/2003, and have stayed above 100 €/MWh for eligible certificates since the spring of 2004. The average monthly price for March 2005 was 110.93 €/MWh, showing a slight price rise compared to previous months. The end of this compliance period has been especially visible by the increased monthly traded volume: 58,772 certificates were traded in March, compared to a monthly average of 19,000 certificates over the past twelve months.

For this Market Monitor, the GreenPrices Newsdesk investigates several markets, with the help of brokers and traders.