What is a REGO certificate? The Complete Guide
The Renewable Energy Guarantees of Origin (REGO) scheme was brought into being to provide transparency to consumers about how much of their energy comes from renewable sources. It was initially brought in after EU legislation made it obligatory that all member states have such a scheme in place. On this page, we’ll discuss the merits and the problems involved with the scheme.
What is a REGO certificate?
A REGO certificate acts as a guarantee to energy consumers, proving that a certain amount of energy was produced from renewable sources. Under the REGO scheme, one certificate is issued per megawatt hour (mWh) of energy produced from solar, wind, tidal energy, hydroelectric power, or other sources that the scheme defines as renewable.
Are REGO certificates green?The certificate itself acts like a birth certificate for a unit of energy produced from a renewable source. In this sense, it is green, as it is proof that green energy has been generated.
The main use of a REGO certificate in the UK is for providers’ fuel mix disclosure. All electricity providers are obliged to provide details relating to the mix of fuels that their energy supply comes from. The most recent data says that the average fuel mix for UK suppliers is as follows:
According to Ofgem data for 2020
The proportion of energy sourced from renewables has risen sharply in recent years, with providers keen to use an environmentally friendly ethos as a selling point. So-called 100% green tariffs from larger independent providers like Bulb and Octopus allow customers to feel that they’re doing their bit for the environment while saving money.
REGO certificates have played a big part in this, as they are the proof the provider needs to be able to make the claim that their tariffs are 100% green. You might wonder what the problem is with this - what if we told you that, under the REGO scheme, a provider does not need to have generated renewable energy itself to hold a REGO certificate? Stay with us.
REGO certificate trading
The REGO certificate scheme is not without its critics, whose main bone to pick with it is that the certificates can be bought - and cheaply. A supplier is able to buy REGO certificates separately from the energy itself, with enough to power a typical household’s energy for a whole year costing just 50p.
This makes it easy for suppliers to buy away consumers’ environmental guilt and claim to offer 100% green electricity. In reality, many providers simply engage in REGO certificate trading, buying enough certificates to match the energy you use but actually getting the power from the cheapest possible source - be it coal, natural gas, nuclear energy, or wherever. This is sometimes also called greenwashing, and is increasingly common.
To clarify, there are three ways that providers offering green energy are doing so. Here they are in order of how much of a positive impact they make from an environmental standpoint:
- Producing their own green energy. Some providers, such as Ecotricity and Good Energy, actually develop their own wind or solar farms to produce more green energy and contribute to pushing up the proportion of renewable energy that the UK is using. If you’re looking to make a difference to the environment when choosing your supplier, choosing one of these is the most effective way of doing so, as you’re supporting the generation of renewable energy directly.
- Green energy trading. Many providers purchase REGO certificates as well as the energy they represent. This is better than nothing, however it still means purchasing green energy from a source that already exists - it doesn’t involve making new green energy, just moving it around. One good thing to be said about this dealing is that it increases the demand for green energy, which you would hope can only result in increased production in the future.
- REGO certificate trading. Many more cynical providers simply trade in REGO certificates and neither generate their own renewable energy nor source directly from renewables. They buy energy from the cheapest sources of fuel available to them, purchase enough REGOs to match their customers’ usage, and then on their fuel mix disclosure declare that their fuel mix is 100% green. This does nothing to make the UK’s fuel mix greener and, worse, misleads well-intentioned customers for the purpose of ripping them off.
It’s clear, then, that not all “100% green tariffs” are created equal, and that depending on the provider you’re with your product could range from very eco-friendly to not at all. This is a problem that Ofgem has said it will seek to address with the REGO scheme, and we would say it’s essential that it does for the credibility of the scheme itself, even if the problems with it were not intentional.
We suggest doing your own research into how your provider sources its renewable energy in order to be sure how positive an impact your choice of energy supplier will have on the environment. It’s always best to back green energy directly and put your money behind a company that’s producing its own energy.
Pros and cons of REGO certificates
When it comes to the REGO scheme, it seems to us there is one main advantage and one crucial flaw that needs to be corrected:
- In theory, a scheme ensuring that every unit of green energy is quantified and accounted for is a positive step. It should have ensured increased transparency and allowed eco-conscious customers to easily identify which provider and which tariff to choose in order to minimise the effect of their home energy use on the environment.
- In practice, the ability of providers to engage in REGO certificate trading has meant that consumers can be misled by their provider’s fuel mix and believe their supply is renewably sourced when it is in fact not.
At The Switch, we believe that a loophole has meant that REGO certificates have become separated from renewable energy generation, which was obviously never the intention of the scheme. We hope that this loophole will soon be closed and that providers will be made to work a bit harder to be able to call their tariffs 100% renewable in the future, but for now energy consumers will have to be wary of providers calling themselves green.