REGOS, otherwise known as Renewable Energy Guarantees of Origin, are certificates which aim to provide transparency to customers. They are designed to confirm that energy purchased by consumers is from renewable sources.
REGOS are administrated by the governmental regulator OFGEM (the Office of Gas and Electricity Markets).
Ofgem issues REGOs to companies that produce renewable energy, for example, a wind farm will receive 1 REGO per megawatt-hour of energy they produce.
In turn, the wind farm may sell the REGO certificate to an energy supply company who will then sell a renewable energy tariff to its customer.
In theory, by receiving a REGO certificate a customer should be reassured that their energy is green. However, in practice, this does not always work as it should.
REGOs do not guarantee the energy you are buying as a customer comes directly from renewable sources.
An energy supplier (such as British Gas or Gazprom etc.) can buy REGO certificates from a wind farm or solar farm at around 15p per certificate. They do not have to also buy renewable energy from wind or solar farms at the same time.
The supplier could simply buy the certificate and then source energy from a separate source all together. This could be from a coal power station.
Consequently, the energy that is being supplied to you as a customer from these big companies could be derived from fossil fuels and not from renewable sources, even though your supplier has marketed your energy supply as ‘green.’
Yes, they are giving 15p per megawatt hour to a sustainable renewable energy generator, but this 15p is minimal in the grand scheme of things and is futile if the energy you are using is still sourced from fossil fuels.
This is what Shell have done. They have sold misleading 100% renewable energy tariffs to their customers by buying surplus REGO certificates.
Shell buy spare REGOs from renewable energy generators. The renewable energy accounted for on the REGO certificates has already been used but the REGO certificates are up for grabs. Shell buys these REGOs and sources their energy from dirty sources elsewhere.
In this way, Shell are seen to be doing the right thing but are in fact not. This is known as ‘Greenwashing’. When a company communicates to customers that they are doing the ‘most environmental thing possible,’ when in reality behind the scenes they have ulterior motives.
Another problem with REGOs is the fact that there is a surplus of certificates and not enough consumer demand. This is because original investment in renewable energy from the UK government exceeded the demand of customers wanting renewable energy. So, the cost of REGO certificates fell drastically and became almost negligible. We need consumer demand to increase and the cost of REGOs to increase to help fund further investment in the sector.
We also need the credibility of REGOs to improve. It should not be allowed that REGOs can be purchased without buying renewably sourced power at the same time. This proves a major flaw in Renewable Energy Guarantees of Origin.
This is where The Big Clean Switch comes in. They provide us as customers with a list of renewable energy companies which match the amount of renewable energy produced with the number of REGOs provided.
Instead of trading REGOs for profit, these companies actually care and produce renewable energy from solar, wind, water, or biofuels.
So, when you buy a renewable tariff backed by REGOS from one of these companies, you can rest assured that your money is going into renewable energy generation, not just a certificate.
When choosing a supplier make sure they back the power they will provide with energy sourced directly from renewables instead of greenwashed with certificates. Good Energy is a supplier that does this and explains the process on their website. Finding a transparent provider is key.
At Green Element we partner with Smarter business to provide recommendations on the best energy tariffs. These are often cheaper or the same price as tariffs that rely on fossil fuels.
If you wish to know exactly where your money is going you can purchase energy directly from an energy generator through a purchase power agreement. This is a long-term contract set up with a project developer.
Buying energy in this manner enables you to support a renewable energy project. It allows you to feel comfortable that your money is going directly into the investment in renewable energy.
In addition, you’ll be able to save money and avoid the volatility in fuel costs associated with finite fossil fuels.
Scientific findings outlined in the most recent IPCC (Intergovernmental Panel on Climate Change) state that we need to limit global warming to 1.5 degrees above pre-industrial levels and we have just 11 years left to do this before changes are irreversible.