French auction information to public

1 May 2019

In a recent newsletter RECS International announced the upcoming auction of Guarantees of Origin (GOs) in France. The French Issuing Body of GOs, Powernext, has been tasked by the French authorities to run monthly auctions for Guarantees of Origin from French renewable power generators who benefit from national support schemes.

The auctions will start in September 2019 and the quantity of GOs to be auctioned each month will be defined by the relevant government ministry, who will be the only seller in the auction. The theoretical maximum of auctioned GOs is the total generation of renewable electricity benefitting from feed-in tariffs and market premium, and amounts to approximately 40 to 50 TWh per year – this is around 10 to 15% of the EU GO market. The smallest tradable unit will be 1 MWh (1 GO). The buy side will be represented by suppliers, who acquire GOs to be able to offer green electricity to end customers, but also by other market participants. A price floor will be defined by the ministry ahead of the auction and Powernext will publish auction results.

Prospective members of the Powernext French GO auction will have to follow an admission procedure at Powernext and will have to obtain clearing membership with European Commodity Clearing (ECC), Powernext’s partner for clearing services, before they can participate. All auctions will be subject to specific market rules and will be monitored by Powernext’s market surveillance team.

Because of the scale of these planned French auctions, as well as the introduction of an as yet unknown floor price, this market event could have a significant impact on the EU GO market. RECS International board member Ivan Debay of Origo in France is calling for the French administration to ensure transparency by guaranteeing that 100% of the eligible production will be offered for auction and that these auction sales will be actively marketed. Debay also states that according to Origo’s estimates, the auction floor price should be higher than 0.05 € / MWh.

Members of RECS International can download a two-page information document on the French auction system here