Ofgem to increase monitoring of Renewable Energy Guarantees of Origin' (Rego) certificates following Times Investigation

What are Rego certificates?

The Renewable Energy Guarantees of Origin scheme is designed to provide consumers transparency when it comes to seeing how much of their electricity is supplied by renewable sources such as wind and solar.

The scheme is overseen by Ofgem who act on behalf of the Department for Business Energy and Industrial Strategy (BEIS).

One REGO certificate is issued by Ofgem per megawatt hour of renewable production to the generators of renewable electricity.

With the drive towards NetZero many businesses are seeking assurance that they are truly reducing their carbon emissions and are on the right track towards becoming carbon neutral.

Also read: 100% Clean Energy Tariff to tackle ‘Greenwashing’

What’s the issue?

According to the Times investigation, energy suppliers are claiming to offer environmentally friendly green tariffs by paying renewable electricity generators just 93p per customer per green energy certificate.

Energy suppliers are able to claim they are ‘green’ if they generate their own renewable power; buy it from firms which do; or purchase REGO certificates issued by green energy plants.

This practise allows an energy supplier to claim their tariffs are ‘renewable’ even if the power they’re supplying comes from a dirty fuel source and fossil fuel sources.

The investigation found that REGO certificates can be purchased for just 30p per megawatt hour (MWH) of electricity consumed. With the average UK household typically consuming 3.1 MWh of electricity per year, energy suppliers can pay just 93p per customer to claim that a full year of green energy has been used.

Every customer, even those on a green tariff receive the same energy mix from the National Grid. With energy suppliers paying so little for REGO certificates from wind farms and hydro plants it’s allowing them to effectively dupe consumers.

Also read: UK Energy Mix – The Types of production

‘REGO’s are worthless’

When a supplier buys power from a renewable generator to sell to its customers, it also buys REGO certificates, however, REGO certificates can be sold to suppliers separately from renewable electricity. 

This means energy suppliers can buy their electricity from the wholesale market then purchase enough green certificates to match - without actually buying any power from renewable generators.

Environmentalists have warned that the use of Biofuels should not be regarded as an environmentally friendly source of energy as they claim that they are little better for the environment than fossil fuels.

The Times investigation showed that 20% of the energy produced from suppliers of REGO certificates are coming from Biofuels and the burning of wood fuel pellets.

“REGOs are often more or less worthless. Many energy suppliers don’t actually buy any renewable electricity at all, they just buy brown power- which could even come from coal – and then buy these certificates to make themselves look green. These certificates are so cheap they provide almost no financial benefit to renewable generators. We calculated for a large solar farm they would just about cover the cost of cutting the hedges around the edge of the site each year,” said Tom Steward from Good Energy.

Some energy suppliers have also been accused of purchasing foreign REGOs or buy energy from fossil fuel power plants and then attach REGOs.

Also read: Green Energy Tariffs rise in importance for consumers, cost of energy bills remains top concern

Holding energy suppliers to account

In light of the investigation’s publication the energy regulator Ofgem said that they expect all energy suppliers need to clearly communicate the origin of the ‘green’ energy they provide.

It also said that they will increase its monitoring and ‘shine a light on good and bad practice to hold suppliers to account’.





Further Reading

As Winter approaches three million households are in Energy Bill debt to Energy Suppliers

Majority of UK public unwilling to pay higher energy bills to achieve NetZero carbon emissions target

Green Energy Tariffs rise in importance for consumers, cost of energy bills remains top concern

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