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While large volumes of Guarantees of Origin (GO) certificates are available in the market across mainland Europe, bid interest in them remains weak: the main buyers have already secured GOs to meet customer demand for green power products in 2005. Interest for certificates from wind facilities remains strong, at around EUR 1/MWh, largely because consumers view wind as the "greenest of green" energy. But sourcing GOs from wind facilities that do not already receive subsidies -- a requirement of most buyers -- is difficult. The result is that rather than wind, the big majority of certificates in the purchase pool are from hydro facilities, which last traded at around EUR 0.20/MWh. In the UK, Renewables Obligation Certificates (ROC) generated from pure renewables stations rather than co-fired sources in the third compliance period (CP3) are trading at £45.80 (EUR 68.8). But even though electricity retailers need to show compliance for CP3 by September 2005, activity has been unexpectedly slow. Moving into CP4 (April 1, 2005-March 31, 2006), ROCs have been trading at £41.00. Activity remains stable in the Swedish renewable electricity certificates market, with prices increasing slightly to around SEK 206 (EUR 22.23).

In the US, the north-eastern markets remain strong. Renewable energy certificates (RECs) eligible for meeting the Massachusetts renewables portfolio standard remain in particularly short supply. With the transfer period for 2004 RECs closed as of June 15, it is now clear the Massachusetts market has been incredibly short -- significant numbers of load servers have been forced to pay the state's Alternative Compliance Payment of $51.41/MWh. The period for 2005 is also shaping up to be short: market bid price is $48, but offers are already coming in at $52.

As with the last quarter, Connecticut Class 1 RECs have seen more balance, with trades generally clearing in the mid $30s. While REC imports from outside of Nepool continue, those in favour of local sourcing only are starting to be heard in both the legislature and the implementing agencies. If their arguments win, a reduction in supply and higher prices could result. Texas REC prices have been softening after legislation to increase target levels failed to pass into law. New Jersey has seen a spurt of activity, largely in retail scale demand for solar RECs.

In markets without minimum standards for the content of renewables in supply portfolios, REC prices have been falling. This is due to an increase in installations and awareness of REC value among existing generators. While growing at a rapid rate, voluntary buyers, who are the usual off-takers for these RECs, have not kept pace with supply.