As the UK target to reach net zero looms ever closer, many companies will turn to renewable energy as the simplest step to reducing their carbon footprint. This involves choosing a renewable energy electricity supply, backed by Renewable Energy Guarantee of Origin (REGO) certificates.
REGOs are certificates issued to companies from energy suppliers, guaranteeing that the electricity they source has been generated from renewable sources.
However, the energy they purchase may not be as green as you think.
How do REGOs work?
REGO certificates are issued by the Office of Gas and Electricity Markets (Ofgem), a UK body that regulate suppliers. Each megawatt hour (MWh) of renewable energy generated equates to one REGO certificate.
These certificates authenticate to the consumer that renewable sources generated that portion of energy, strengthening your environmental credentials.
You can also report lower or zero carbon emissions under Scope 2 as your power supply would be supplied from 100% renewable energy.
The grass is not always greener
When you sign up for a 100% renewable energy deal with an energy supplier, you may assume that the energy you are buying is exclusively generated from renewable sources.
However, this is not always true.
Some suppliers will ‘greenwash’ their green tariff claims and avoid providing all details about its sustainable initiatives. Essentially, they could purchase a REGO certificate, without actually buying the power they are associated with, and subsequently combine it with energy purchased from the wholesale market – which could be sourced from fossil fuels, embelishing their renewable claim.
According to a paper published by Good Energy in 2020, in recent years there has been an emergence of numerous energy suppliers seeking to ‘capitalise on the growing public concern for the environment – marketing themselves as 100% renewable’ but a ‘supplier doesn’t need to hold a single contract with a solar farm, or buy a single MWh of power from a wind-farm – all they do is buy enough REGOs to match their customers’ demand.’
This is because it is not mandatory for REGOs to be delivered with the power used to generate them.
It’s important to remember that REGOs themselves don’t reduce carbon emissions. If you are serious about your organisation’s green initiatives, investing in the development of green energy infrastructure is going to have a greater impact than buying the certificates alone.
How we can help
Control Energy Costs can provide guidance on carbon reducing solutions for your business.
We have recently launched a carbon solutions service, which enables businesses to reduce both carbon emissions and costs at the same time. The primary benefit is that there is no direct cost to the business – the fee is based on actual gains, not projections. For many clients, the process is self-funding and can even be profitable.
To find out more please contact us on 01737 556631 or email us at [email protected].
You can also download our carbon solutions brochure: cec.uk.com/carbon-solutions