Scope 2: why now is the right time to act
For many industrial companies, reducing Scope 2 CO₂ emissions – i.e. indirect emissions associated with purchased electricity – has long been approached with caution. Decisions have often been postponed, pending greater regulatory clarity or more favourable market conditions.
Today, the context has changed. Prices for Guarantees of Origin (GOs) – one of the key instruments for market-based Scope 2 coverage – have returned to levels among the lowest seen over the past five years.
Figure 1: Five-year market price evolution of HWS GOs – production periods 2025–2026–2027
Source: market observation data from Nvalue
Some short-term market dynamics do not reflect a structural shift in price conditions, but are instead attributable to contingent factors.
In particular, tighter hydrological conditions in the Nordic countries and across the Alpine region have reduced visibility regarding future production. In this context, some producers who had already sold part of their output forward have been constrained by internal risk-management policies, temporarily reducing the volumes offered to the market.
In light of these dynamics, as is often the case in energy and environmental markets, certainty about the future remains limited. What can be done today, however, is to gain control over costs and to turn a future risk into a strategic decision.
Market context and current price levels
Current price levels reflect a market positioned with a high degree of caution. The Guarantees of Origin market has already priced in a range of bearish factors, compressing expectations and keeping prices at relatively low levels.
Among the main elements already reflected in the market are:
- the potential availability of residual volumes from the previous year (GO rollover);
- the commissioning of new renewable capacity;
- an uncertain geopolitical environment, marked by international tensions and regulatory instability;
- a downward revision of expectations for green hydrogen, with many projects postponed or cancelled;
- the entry of new net-exporting countries into the AIB system, such as Bulgaria.
Taken together, these factors have contributed to keeping prices compressed. However, this configuration primarily reflects the recent past and does not necessarily capture the dynamics that may emerge in the coming years.
Growth of renewable electricity generation in Europe
Eurostat data and leading sector reports indicate that in 2025 the share of electricity generated from renewable sources in Europe increased further compared to 2024. However, this growth has not been uniform across technologies.
In particular, the increase has been driven by solar generation, while the relative share of wind and hydropower has declined. This is a relevant aspect, as wind and hydropower have historically accounted for a significant share of GO issuance.
| Source | 2024 | 2025 (Q3) | Trend |
|---|---|---|---|
| Solar | 22-23% | ~38% | Strong growth driven by new installations and favourable seasonality |
| Wind | 39% | ~31% | Decline in relative share, offset by solar expansion |
| Hydropower | 29-30% | ~23% | Impact of hydrological variability |
| Bioenergy + Geothermal | ~8% | ~8% | Stable contribution |
Overall, the share of renewables in total European electricity generation increased from 47.5% in 2024 to 49.3% in 2025. However, the reduced contribution of hydropower and wind suggests that 2025 may result in lower GO issuance compared to the previous year, despite the overall increase in renewable generation.
This trend is reinforced by hydrological conditions: in 2025, water reserves have not replicated the particularly favourable levels observed in 2024 and, in some European areas – especially across the Alpine region – initial conditions appear weaker, with similarities to the poor hydrological situation observed in 2022.
Figure 2: Water-reserve levels in the Alpine region
Source: Nvalue’s elaboration of data from national sources including RTE, Nord Pool Spot, SFOE, and other official information sources.
Outlook to 2030
Looking to the medium term, multiple European scenarios converge on a key point: demand for renewable electricity is expected to grow significantly by 2030. The electrification of transport, heating, and industry will drive a structural increase in electricity consumption.
In this context, sector analyses estimate that renewable electricity consumption in Europe could increase by up to around 60% compared to current levels, provided that the deployment of electric vehicles, heat pumps, hydrogen infrastructure, and data centres continues.
This scenario implies growing competition for access to renewable electricity and related tracking instruments. Looking ahead, the availability of green electricity and Guarantees of Origin will depend not only on installed capacity, but also on the pace of demand growth across sectors.
Bullish factors likely to increase the cost of Scope 2 emissions abatement
Looking ahead, several bullish factors are not yet fully reflected in current GO prices. These relate to both the supply and demand sides, as well as regulatory and methodological changes.
On the supply side, a reduction in auctioned volumes has been observed, particularly from the GSE, with approximately 40 TWh less than in 2024. This is compounded by structural factors such as years marked by poor hydrological conditions and lower hydropower generation, which reduce overall GO issuance.
On the demand side, growing pressure stems from the expansion of data centres and artificial intelligence applications. In Germany, from 2026 onwards, ICT centres will be required to be powered entirely by renewable energy sources, introducing a form of rigid and largely inelastic demand.
From a regulatory perspective, the extension of EU State-aid schemes, the evolution of CSRD and CSDDD requirements, and the involvement of companies responsible for around 88% of European emissions continue to support demand. At the same time, corporate decarbonisation targets are cascading across entire value chains, affecting suppliers and SMEs.
In addition, the adoption of RED II in Norway could lead to increased use of Guarantees of Origin, as the market-based method is expected to be favoured for tracking renewable electricity consumption. Methodological changes of this kind contribute to strengthening demand for traceability instruments, with implications for market dynamics.
Taken together, these factors raise the risk of higher Scope 2 prices over the medium term.
Acting today: cost control, flexibility and credibility
For industrial companies, acting today on Scope 2 coverage offers a dual advantage: securing favourable economic conditions while building a robust, credible, and defensible decarbonisation pathway over time.
Through a structured approach to the Guarantees of Origin market, Nvalue supports companies in defining strategies aligned with their consumption profiles, industrial objectives, and reporting requirements. The focus goes beyond compliance, extending to the integration of Scope 2 decisions into a long-term strategic vision.
The current environment offers a rare combination: prices that remain accessible within a market that presents more upside risks than downside potential. In this scenario, waiting increases exposure to uncertainty; acting today means managing it.
Deepening your understanding of these dynamics today is essential to making informed Scope 2 decisions.