Norwegian-Swedish Green Certificate Prices Surge Ahead of Cancellation

(Montel) Prices in the Swedish-Norwegian green certificate market have risen sharply ahead of the annual cancellation of certificates on 1 April.

The spot contract was last seen at SEK 152/MWh (EUR 17.06/MWh), up SEK 6 week on week, while the March 13 contract was up SEK 7 at SEK 160/MWh and March 14 up SEK 9 at SEK 165/MWh.

“The market was moving slowly upwards, but in a very hesitant manner until Tuesday when both volumes and prices rose sharply”, said Michael Bergh of brokers SKM, adding the increased activity was not triggered by any specific news, but was most likely due to buyers having an accumulated need for certificates.

The trade has been mainly focused on March 13 and March 14 with less activity further out on the curve.

“Not all players have been completely in balance ahead of the cancellation and they have had to buy more certificates. We’ve certainly noticed more activity among some of our clients for this reason,” said Robin Sköld, trader at Swedish utlity Bixia.

“Chain reaction”
The annual cancellation of certificates will take place on 1 April. Every year, certificates representing the sale or use of electricity during the previous year are cancelled and can no longer be sold or used for the fulfillment of a company’s quota obligation.

In addition, there had been a “chain reaction” when players realised that prices were rising and the bottom might have been reached, Sköld said.

However, activity is likely to drop again soon, both players said.
(SEK 1 = EUR 8.91)

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