Thursday, 22 September 2022
HUPX (Hungarian Power Exchange Ltd), the appointed operator for Hungarian GOs market by MEKH (Hungarian Energy & Utilities Regulatory Agency), held its first pan-European auction for Guarantees of Origin (GOs) on 20 Sep 2022. This is the third such auction in history offering both National GOs (produced from November 2021 to January 2022) and EECS GOs (produced from February to June 2022).
The National GOs refer to GOs produced before 1 February 2022, which are Primary FiT non-EECS GOs and can be traded only by HUPX GOs members via the MEKH registry. MEKH issues GOs automatically for production with fixed rate support (KÁT) to the Account of the Hungarian TSO MAVIR from 2022. These GOs will be sold by MAVIR through auction on the organised electricity market, and the auction income is used for covering the costs of the KÁT scheme.
A total of 2.16 TWh of GOs were offered, with 60% of EECS GOs from Hungary, Norway, Sweden and France and the rest from supported Hungarian National GOs. Half of offered volume are sold, where Hungarian EECS GOs are fully traded. Compared to the previous auction, the ratio of National GOs sold decreased from 27% to 18%. Moreover, 80% of the auctioned volumes came from Solar GOs (867 GWh), unsurprising given that about 75% of the Hungarian installed capacity of renewables in 2022 was from Solar.
National GOs sourced from Hydro and Geothermal maintained the highest trading prices compared to the other non-EECS GOs, with a premium of around 30 Eurocents. Since National GOs are GOs produced before 1 February 2022 and can only be traded inside Hungary, they are less liquid and with lower remaining lifetime than the recent issue EECS GOs. Compared to the previous auctions, the price spread between EECS GOs and National GOs has significantly increased, from a premium of 150 Eurocents/MWh to more than 300 Eurocents/MWh. Among EECS GOs, we noticed a customer preference tilted to Solar GOs, with the highest VWAP of 376 Eurocents/MWh, which was at a slight premium (6 Eurocents/MWh) in comparison with the corresponding Solar GOs in the EU OTC market.
The traded prices for EECS GOs are generally in line with the OTC market, with price spreads within 10 Eurocents/MWh. Meanwhile, compared to the previous EECS GO auction, the price growth rates among all technology were between 90% to 115%, which aligned with the price trajectory in EU OTC market.
Source: HUPX