Getting the most from your REGOs
Blog
Introduction
REGOs (Renewable Energy Guarantees of Origin) currently deliver additional returns for renewable generators. REGOs are sold, as a commodity, to suppliers or consumers who wish to demonstrate their green credentials. As renewable provenance is becoming increasingly topical and an expectation from end users, it is more important than ever to understand their significance and how to best manage your REGOs as a renewable energy generator.
What is a REGO?
The REGO scheme was introduced to offer full transparency to consumers regarding the electricity that their energy supplier sources from the grid and wholesale market – highlighting how much is supplied by renewable resources. REGOs are a commodity, so can be traded like power, which is very different to subsidies such as ROC and FiT, and they typically trade on the OTC (Over The Counter) market. The scheme is run by Ofgem and eligible generators must apply for accreditation to earn REGOS for the power they generate. Dark green REGOs, which are those from hydro, wind and solar assets are typically more valuable than those from Anaerobic Digesters, Biomass and Landfill gas. The REGO market is uncapped and as a result, we have seen significant variation in REGO prices since the market’s inception.
The UK’s REGO market: A short history
The European Union introduced a responsibility on all member states to certify REGOs from 2001. Originally a REGO was earned per KWh of renewable electricity generated, changing to a REGO per MWh of energy produced from 2009. The REGO market from its inception was a slow burner, many state that it was stagnant by 2017/2018 with very minor price movements. In 2018, UK REGO prices enjoyed a price bump as they began to be exported to the European market, but prices fell post Brexit in 2020. It was then COVID’s turn to derail a REGO revolution. As grid demand completely dropped during the first couple of lockdowns, so did suppliers demand for REGOs. However, since April 2021 the market has been on the up.
Last summer (June 2021), the dramatic rise of REGO prices was covered in the news, in-fact, the 50% price increase hit the headlines of all the respected trade press houses. The main drivers behind the climbing REGO price include; the push for net zero, businesses starting to take steps to improve green credentials and a growing demand from end users for 100% renewable energy tariffs as standard – these have created a huge demand for REGOs. It is a simple case of supply and demand.
Why were REGOs introduced?
Renewable generators, whether they have a 100MW solar farm or a 100KW wind turbine, are issued a REGO for each MWh of renewable electricity they generate. These REGO certificates are a commodity, they can be bought and sold, with the aim to promote renewable generation through financial incentives. Energy suppliers purchase enough REGOs to either match the units of energy their customer base use, or enough to offer an exclusive 100% renewable energy tariff. End users are now very conscious of the need to decarbonise in every part of their lives, including how they electrify and heat their homes. This can also be said for businesses who are under a lot of pressure to become net zero by 2050. REGOs are currently the most cost effective way to ensure that the energy consumed is matched with a renewable source.
Why choose Limejump to manage your REGOs?
Limejump’s PPA offering is more than just a price based transaction. Our expert renewables team can ensure all additional embedded benefits and green certificates, including REGOs, are calculated and included into one simple statement. This keeps all your power purchase requirements in one place, enabling you to concentrate on the operational needs of your business.
As highlighted previously in this blog, REGO prices can go up and down, so managing this process yourself will require constant attention. We offer a guaranteed REGO value for the entirety of your PPA contract, whether that be for 1 year or even 5 years, this will provide you with peace of mind and additional guaranteed income alongside your power and other embedded benefits and subsidies (ROC, FiT).
We pride ourselves on simplifying the complex, our experienced Account Management team will guide you through the REGO application and transfer process, keeping you fully aware of upcoming deadlines, ensuring your REGO revenue is secured. Our Renewables team is always keeping an eye on REGO market trends to ensure our offering is competitive and transparent.
Speak to our Renewables team for all PPA & REGO enquiries
If you wish to learn more about our Power Purchase Agreements and very competitive REGO offering, speak to one of our Renewables team today.
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