FAQ: Renewable Energy Guarantees of Origin (REGO) scheme

Just how green is a ‘green’ tariff?

The Renewable Energy Guarantees of Origin (REGO) scheme is designed to help businesses and consumers understand how much of the electricity they purchase comes from renewable sources, but the initiative isn’t entirely clear-cut. Here’s what you need to know.

What is REGO and how does it work?

The REGO scheme was created to clearly show how much of an energy supplier’s energy comes from renewable sources such as wind, solar or hydropower. In the UK the scheme is backed by energy industry regulator Ofgem, which acts on behalf of the Department for Business Energy and Industrial Strategy (BEIS).

Ofgem gives every energy provider one REGO certificate for every 1,000 units, or one megawatt hour (MWh), of renewable energy they generate. These certificates are generally considered proof that at least some of their energy mix comes from renewable sources.

Applications for accreditation under the scheme are made via the Renewables and CHP register. For generators to receive certificates, generation data must be submitted via the register. 

What are the advantages of REGO?

As sustainability becomes an increasing concern to businesses, many organisations are looking at ways to decarbonise their operations. Switching to a green energy tariff and using renewable electricity is a key activity here. Choosing a supplier with the appropriate REGO certificates therefore enable companies to demonstrate their commitment to sustainability, which can be beneficial to their brand or corporate social responsibility strategy.

What are the pitfalls of REGO?

There is a loophole within the REGO scheme, as Ofgem doesn’t require an energy supplier to provide direct proof of where their energy comes from – they only need suppliers to show how many REGO certificates they have accumulated over the year. Because certificates can be transferred to other Renewables and CHP register account holders, suppliers are able to purchase REGOs without actually purchasing the green electricity they relate to.

This means that suppliers can claim to offer 100% renewable tariffs if even they hold few or even no contracts with renewable generators. They simply need to purchase enough REGO certificates to match their total output. As such, REGOs do not actually provide the transparency they were designed for, and some suppliers are using them to ‘greenwash’ their activities.

How can businesses be sure they are purchasing truly renewable energy?

While REGOs are meant to serve as ‘evidence’ of a provider’s renewable energy supply, it’s important not to take these at face value due to the loopholes associated with the scheme.

Businesses that want to ensure their energy supply is coming from truly green sources should:

·         Consider the price of the tariff. Renewable energy tends to be slightly more expensive than power derived from fossil fuels, so if a tariff claims to be 100% renewable but is also extremely cheap, approach with caution.

·         Consult Uswitch’s Green Accreditation programme, which sorts green tariffs into gold, silver and bronze categories based on proven criteria.

·         Ask the energy supplier directly to provide evidence and documentation from the renewable energy generator they claim to be sourcing from.

What are the alternatives to REGO for carbon conscious businesses?

Businesses that want to make a proven and meaningful dent in their carbon emissions don’t have to rely on the promises of energy suppliers, and might consider alternative ways of sourcing their energy.

For example, more and more businesses are exploring technologies such as combined heat and power (CHP) and solar panels, to generate their own electricity supply. Others, meanwhile, are investigating the benefits of peer-to-peer trading. This is where energy generators and consumers are matched up based on their supply and demand. For example, an office might be powered directly by a local solar farm, or a warehouse might draw from a neighbouring wind turbine.

Peer-to-peer trading not only enables businesses to fully understand where their power is coming from, but also provides a financial benefit for both electricity consumers and the generators through a discount on industry costs. 

Advantage Utilities is one of the first consultancies in the UK to enter into peer-to-peer trading, in conjunction with F&S Energy. To learn more about how peer-to-peer could work for you, or for more help with REGOs, get in touch with our dedicated specialist advisors.