The Renewable Energy Guarantees of Origin (REGO) scheme was set up to provide transparency to consumers regarding how much of their energy supply comes from renewable sources. It was brought in as a requirement set out by EU legislation. This ruling made it compulsory for all members to have a scheme in place. This means that as domestic energy users, you can be clear on the amount of energy coming into your home comes from a green resource, In addition, suppliers can be clear on the green tariffs they offer.
What are the advantages of REGO certificates?
REGO’s are the official way for domestic energy users to ensure that the amount of energy you use within your household is matched by a renewable energy source. It will help you track and reduce your carbon footprint. For businesses, REGO certificates can be a critical component in your companies green objectives. This is especially true if the organisation wants to market itself as sustainable.
What are REGO certificates?
The REGO certificates play a significant role as its the proof a supplier needs to state that their tariff is 100% green. One key thing to remember about REGO certificates is that the energy provider doesn’t actually have to generate the renewable energy themselves to hold the REGO certificate. If fact energy providers can trade REGO certificates, we’ll cover how that works next.
What is REGO certificate trading?
One of the biggest criticisms the REGO scheme faces is that suppliers can acquire certificates at a low cost. In fact, a supplier can purchase a certificate for as little as 50p will provide enough energy to power a home for a whole year. This allows energy suppliers to sell you green energy tariffs without having to have actually generated any of it in house. It’s now not uncommon for suppliers to purchase enough certificates to power their customer’s homes. However, they then buy their energy from the cheapest source. Typically, this is coal or natural gas or nuclear.
There are three ways that an energy supplier can offer green energy as follows:
By producing their own green energy
This includes suppliers that have set up and run their own solar, wind or other green energy farms. These suppliers procure more green energy and increase the percentage of renewable energy reaching our homes across the UK. These are the best suppliers to choose from for people that want to make a difference to the environment. In choosing a supplier that produces their own green energy, you are directly supporting the generation of green energy.
Green energy trading
Some suppliers purchase REGO certificates alongside the energy that those certificates represent. While this does mean that energy is simply moving around between suppliers. However, at least the supply of green energy is increasing, which will result in a greater amount of green energy for the future.
REGO certificate trading
Some suppliers simply trade REGO certificates without purchasing the energy they represent. This is a loophole in the system that allows suppliers to claim green credentials without actually directly supplying or producing any green energy. Generally, they will purchase energy at the lowest available prices. Then buy REGO certificates to allow them to claim that their energy is renewable.
Not all 100% green energy tariffs are as green as they appear on the surface. This is an issue that needs to be addressed by Ofgem to protect the credibility of the whole scheme.
What are the advantages of REGO certificates?
For domestic energy users, REGO’s are the official way to ensure that the amount of energy you use within your household is matched by a renewable energy source. It will help you track and reduce your carbon footprint. For businesses, REGO certificates can be a critical component in your companies green objectives. This is especially true if the organisation wants to market itself as sustainable.
What are the disadvantages of REGO certificates?
The REGO system, unfortunately, has proven to be imperfect due to a number of disadvantages:
- Because energy certificates can be brought or sold depending on supply-demand, it can be difficult for consumers to know if their energy supplier actually generates their own green energy or if they simply purchase REGO certificates.
- REGO certificates do not add any incentives for suppliers to produce green energy. This is because renewable energy already receives a subsidiary.
- The current system allows any supplier to market themselves as green. In addition, these suppliers do not have to have made any relationships with green energy generators to do so.
There are some clear advantages and benefits to the REGO system. In that, it allows all the renewable energy that comes into our homes to be trackable. It’s clearly a system that needs improvement. When selecting an energy supplier for its green credentials, it’s best to look a little deeper into where its renewable energy claims come from.
Some suppliers, such as Octopus and Bulb, clearly state that they produce their own green energy. However, others will say little aside from the fact they are green. They may also state that your energy supply is coming from a renewable source. REGO allows suppliers to claim this even if all their own energy comes from fossil fuels simply by purchasing a certificate.