Relative to the March 2020 survey, the average reported RGGO price has fallen 30 percent to ~£6/MWh for 2019 vintage RGGOs and dropped 15 percent to ~£7/MWh for 2020 vintage RGGOs.
In the March 2020 survey, respondents reported average RGGO prices of £8.20/MWh and £8.35/MWh for 2019 and 2020 vintages, respectively.
“The pandemic saw RGGO prices fall, though not to the same extent as the drop observed in Renewable Energy Guarantees of Origins (REGO) values, with demand for gas curtailed to a lesser extent than electricity demand during the first lockdown” said Luke Ansell, Assets and Infrastructure Analyst at Cornwall Insight. “Reported prices saw a slight uptick in the October 2020 survey. However, since then, prices have fallen yet again in the following two surveys. Unlike REGO prices, which have seen a recent price recovery, RGGO prices have not bounced back and have fallen. Despite this, market sentiment remains cautiously optimistic; 48% of respondents to our survey expect prices to rise in the next year, while 39 percent see prices remaining level. When asked to provide their views on demand drivers, respondents commented that high RGGO prices are suppressing demand, with some suppliers opting to use carbon offsets to ‘green’ their gas tariffs rather than purchase RGGO certificates. There are reasons for optimism, with respondents highlighting the wider economic recovery and increased demand from corporates to align with net zero targets as positive demand drivers. The majority of participants also felt there had been no improvement in transparency in the RGGO market in the last six months. Several participants highlighted that greater regulation and clarity from Ofgem on the categorisation of green supply tariffs would address concerns over greenwashing and improve transparency for the consumer.”
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