The Renewable Energy Guarantees of Origin (REGO) market has seen significant changes in recent years with growing demand driving up REGO values, increasing potential returns for renewable energy producers.

Renewable Energy Guarantees of Origin (REGOs) are certificates that are issued by Ofgem for each Megawatt hour (MWh) of electricity that has been generated from a renewable source. The certificates have a long history and were introduced in the UK in 2001 because of the European Union’s Renewable Energy Directive (2001/77/EC), which required EU member countries to be able to guarantee that certain units of electricity had been obtained from a renewable source. 

REGOs play a crucial role for electricity suppliers, who must be able to demonstrate how the electricity that they sell was generated as part of their Fuel Mix Disclosure (FMD). Every unit of electricity that is declared as ‘renewable’ as part of their FMD must be backed by a REGO, which is then retired in the system to prevent double counting.

As green tariffs have become more popular with consumers, so has the need to obtain REGOs to evidence their credibility. This has fuelled a significant increase in the REGO price, as highlighted by Mike Ridler, the Director of Carbon Zero Markets (C-Zero), a company that helps generators bring their REGOs to market, “Originally REGOs traded for pennies, and even as recently as the 2020-21 FMD period, the price was averaging only 66 pence per REGO. But the REGO price has rocketed – peaking north of £20 per REGO at the end of last year.” 

This has fundamentally changed the REGO landscape, enabling generators to gain significant income from their investment in renewable generation. As Clare Haigh, C-Zero’s Head of Environmental Markets explains, ‘REGOs are no longer small change – leaving REGOs unclaimed or letting them sit unsold in your Ofgem account can leave substantial value on the table, whilst also preventing them from doing their intended job of rewarding investment in renewable technology’. 

REGOs are tagged with the technology that was used to generate the renewable electricity, with ‘deep green’ REGOs from wind, solar or hydroelectric installations usually commanding a higher price than those from biomass or landfill gas. They cost nothing to claim, other than investing a little time to set up the required account. REGOs can be claimed by anyone producing renewable electricity - there is no minimum generation or requirement to be exporting to the grid - so they can also be claimed by smaller generators who do not export enough to get a Power Purchase Agreement (PPA).

C-Zero have a team of people who can not only help generators to register with Ofgem to obtain REGOs, but also take care of administering the regular electricity generation and export data inputs needed for the claims. The final stage is assisting with finding the best route to market. “Some counterparties only deal in large volumes, so we play an important role in aggregating volumes from smaller producers to make a larger batch that is attractive to these buyers” adds Clare.