Participants bullish on REGO prices - Recap from Greenfact Webinar

Today, Greenfact hosted the 'GoOs post Brexit: Developments and Outlook', the second in our intended series of webinars for the year.

Our first guest speaker was Robin Timoteo Head of Certificate Markets at Cleanworld AS.

Robin opened the presentation by explaining the regulatory move to the explicit proof of supply after Brexit (1 January 2021), from the implicit proof of supply used earlier.  He  shared historical pricing trends, market premiums for REGOs and CfD and FiT compliant EU GOs and observed the massive price rise in REGO markets including the 1 500% increase witnessed in the Non-Bio REGO markets last compliance period. In his presentation Robin expected that the FiT or CfD compliant GOs would have a premium of at least 15 eurocents in CP20 compared to equivalent EU GOs to justify increased administration costs for exporting the GOs, with about 40 TWh of EU GOs to be exported in CP20, down from almost 60 TWh in CP18. 

Our second guest speaker was Vishnu Aggarwal, Deputy VP Origination and Renewables Trading at Smartest Energy.

Vishnu opened the presentation by explaining the three different phases in REGO market:

1. Initially when REGOs were practically attached free of charge to Levy Exemption Certificates (LECs); followed by,
2. Increase in price of REGOs following a move towards recognition of REGOs in the EU markets; and finally,
3. to the current phase where REGOs trade at a premium to EU GOs on the account of fast-rising domestic UK demand. 

He also explained how the COVID pandemic disrupted REGO market trading and eventually caused a huge price rise in the REGO prices.  In terms of anticipated regulatory change, he added the status quo is to likely remain until April 2022 and post-April 2022; that the UK is unlikely to receive a reciprocal deal with the EU. He also talked about the key decision trees and scenarios involved for market participants due to the regulatory change. He concluded the presentation by giving both bullish and bearish market factors for REGOs and forecasting the current price spread of more than 1.50 GBP between Non-Bio and Bio REGOs is unsustainable, and would eventually decrease to around 40 pence. 

The presentation was followed by questions and an interesting discussion among panelists. We conducted a poll after the discussion which showed that almost eighty percent of webinar participants remaining bullish or stable about REGO price developments in 2022. 

Please contact us at info@greenfact.com for downloading the presentations made during the webinar or if you would like to watch the recorded version of the event.