I-REC coverage expanded to world’s largest markets
London, 7 September 2023
Global energy and commodity price reporting agency Argus has expanded its coverage of international renewable energy certificates (I-RECs), providing greater transparency to rapidly growing energy attribute certificates (EACs) markets. Argus has added prices for Chile, the UAE, Mexico and India, to its existing coverage for China, Brazil and Türkiye.
I-RECs allow energy suppliers and consumers to certify as renewable the source of their procured energy. Demand for certificates has risen sharply this year on the back of greater focus on the energy transition around the world. Electricity consumers and suppliers are increasingly documenting renewables in their supply chains.
At the same time, however, prices continue to be regionally fragmented and market participants are urgently seeking greater transparency.
Fragmentation in I-REC prices across the globe is the by-product of sharply varying renewables supply-demand balances at national levels. Wind and solar I-RECs generated in the UAE in 2023 were recently priced at $2.20/MWh, while hydropower I-RECs in Brazil this year were trading at around $0.15/MWh. But prices are significantly higher in markets with tighter supply — I-RECs cost around $150/MWh in Taiwan and $60/MWh in Singapore.
Argus chairman and chief executive Adrian Binks said: “As the importance and use of I-RECs increases, we have expanded our coverage to include other major national markets. Price transparency in these growing markets helps to build trust throughout the supply chain, which is key to reaching decarbonisation targets as part of the energy transition.”
The latest additions to I-REC pricing enable Argus to provide transparency for all five of the world’s largest markets. Brazil and China remain the largest consumers of I-RECs, while Chile and the UAE have increased their share of the market to become the third and fourth largest consumers, respectively. Türkiye is fifth. Demand so far this year among the five largest consumers has surpassed 90TWh, compared with 67TWh in the whole of 2022. Global I-REC demand rose to 128TWh in January-August compared with 98TWh in 2022 as a whole.
Argus has also launched price assessments for Spanish domestic electricity guarantees of origin (GOOs), complementing its well-established coverage of continental European and UK electricity and biomethane EACs. GOOs covered 89pc of the total power sold in Spain last year, up slightly from 87pc in 2021, although GOO issuance in Spain fell slightly to 116TWh in 2022.