In January, the role of Guarantees of Origin (GOs) in South-East Europe (SEE) emerged as a critical factor influencing the energy market dynamics, particularly in relation to low-carbon attributes. While GOs did not directly dictate spot power prices, they have increasingly become a vital mechanism for monetizing renewable energy characteristics amid a landscape where physical power prices are primarily influenced by flexibility and operational constraints.
At the structural level, SEE continues to be a net exporter of low-carbon attributes, but significant disparities exist among countries. Bulgaria and Romania, with their substantial hydro and nuclear energy capacities, generate more GOs than their domestic voluntary demand can absorb. In contrast, Serbia and Montenegro face challenges due to limited certification frameworks and fragmented registries, resulting in a persistent shortage of certified green attributes despite adequate physical power supply.
The month of January highlighted this division clearly. Power prices surged during peak evening hours, reaching €200–300/MWh, while GO prices remained stable. This divergence indicates that the scarcity of carbon credits does not align with energy shortages; instead, the pricing reflected flexibility and congestion issues rather than the availability of certified renewable or nuclear energy. Consequently, GO markets exhibited characteristics of a stable structural instrument rather than a volatile commodity.
Hydropower was the predominant source for GO issuance in the Western Balkans during January. Countries like Serbia, Montenegro, and Bosnia and Herzegovina relied heavily on hydro resources to generate certifiable renewable output. Hydro operators were able to capitalize on energy price fluctuations in markets such as SEEPEX while simultaneously issuing GOs independently of whether water was utilized for peak demand or conserved. This separation allowed for consistent GO issuance even when physical energy was withheld.
While wind and solar sources contributed additional GO volumes, their impact was limited during January due to seasonal factors. Solar GOs were scarce, and wind GOs were sporadic. Corporate buyers increasingly differentiate between “hydro-heavy” GOs and those from wind or solar sources, especially multinational companies aiming for precise matching of their energy consumption with renewable generation. The volatility associated with wind generation resulted in timing mismatches rather than outright shortages of GOs, presenting challenges primarily for sophisticated buyers.
Nuclear-generated GOs emerged as a strategically significant component in January’s market dynamics. Bulgaria and Romania’s nuclear fleets produced substantial volumes of low-carbon GOs that appeal to industrial clients seeking reliable clean power solutions or robust decarbonization claims. Although nuclear energy is not classified as renewable, its GOs are gaining traction among heavy industries that prioritize reliability over variability. This trend effectively limited the upward potential for renewable GO prices by providing a stable alternative for buyers focused on emissions intensity.
This situation is particularly relevant for exporters. Utilities in Bulgaria and Romania exporting physical electricity to neighboring nations also enable access to their domestic GO registries. This means that even when electricity flows into markets like Serbia or Croatia, the corresponding GOs follow contractual agreements rather than the physical flow of electrons. As a result, January underscored the reality that importing electricity does not guarantee access to green attributes, revealing potential costs for industrial buyers facing environmental regulations and customer-driven decarbonization pressures.
Serbia’s position exemplifies this tension within the region’s energy landscape. Although Serbia managed to navigate January without experiencing systemic energy shortages due to its central role in SEE flows, it faced challenges regarding GOs. The domestic issuance remains largely hydro-dependent and insufficient to meet the growing voluntary demand from export-oriented industries. Consequently, Serbian companies have turned increasingly towards imported GOs—primarily from Bulgaria and Romania—leading to price premiums that do not correlate with local power prices.
Montenegro’s situation reflects an even more pronounced version of these issues. Despite its reliance on hydropower resources, Montenegro’s limited market size and registry liquidity restrict both availability and tradability of GOs. The significant price variations observed on MEPX during January had negligible effects on GO values but revealed a strategic vulnerability: a system can be environmentally sound yet lack sufficient certification depth if registry infrastructure is weak.
For corporate entities and industrial clients, January served as a clear indicator that fluctuations in spot power prices do not equate to opportunities in the GO market. Those who postponed GO procurement in anticipation of lower prices during €60–70/MWh baseload days found themselves disappointed as GO prices remained anchored by long-term scarcity concerns—particularly for hydro and nuclear certificates with firm delivery profiles. The logical approach in SEE now necessitates separate management strategies for energy price risk and GO procurement risk.
From a regulatory perspective, January illustrated that Guarantees of Origin are evolving into an essential market infrastructure rather than merely supplementary compliance tools. As requirements for hourly matching and reporting related to carbon border adjustment mechanisms intensify, the demand for firm, traceable, and regionally recognized GOs will likely increase irrespective of spot power market behavior. Systems with robust nuclear and hydro resources will continue to leverage this advantage while those lacking such capabilities will incur structural premiums even during periods of abundant physical power supply.
January did not witness any dramatic shifts in GO pricing; instead, it reaffirmed a crucial insight: the distinction between energy scarcity and origin scarcity has become a defining characteristic of South-East Europe’s electricity market landscape. Stakeholders who accurately recognize and respond to this separation will likely achieve better outcomes compared to those who regard GOs as secondary considerations in their power procurement strategies.
