Renewable Energy Guarantees of Origin (REGOs) have started to recover following the impact of COVID-19 according to Cornwall Insight.
Its latest Green Certificates survey found that a 15% and 14% rise in reported average values for Fuel Mix Disclosure (FMD) 2020-21 and 2021-22, with this increasing to £0.20/REGO and £0.32/REGO respectively.
Pre-COVID-19, respondents to Cornwall Insight's December 2019 survey reported average REGO prices of £0.66/REGO for FMD 2020-21 and £0.72/REGO for FMD 2021-22. Luke Ansell, analyst at Cornwall Insight, explained that the pandemic then saw demand for REGOs "fall due to an unprecedented drop in electricity demand, while renewables generation continued to rise as more projects were commissioned, increasing the supply of REGOs".
As a result, he said, the October 2020 survey showed the average reported REGO trading price had dropped by 74% and 61% for FMD 2020-21 and FMD 2021-22, respectively.
The newest survey, however, also discovered that 31% of respondents felt that consumer demand for REGO-backed supply products is increasing, with these demand changes being driven by the SME and domestic markets.
REGOs - which were launched in 2009 - allow suppliers to purchase certificates from renewable generators rather than directly investing in renewable generation or working in partnership with renewable energy developers.
They have been criticised in the past by energy suppliers such as 100% renewable company Good Energy as a form of greenwashing, as the certificates are often combined with power bought from the wholesale market, which will be a mix of fossil fuel, renewable and nuclear power.
In December 2020, Good Energy called on Ofgem to update the licensing conditions to reinstate the link between Power Purchase Agreements (PPAs) and customers to tackle greenwashing.
Earlier this month, ScottishPower announced that all new domestic fixed price tariffs will use 100% renewable energy that will be sourced entirely from its own wind farms in a bid to tackle greenwashing.
Ansell continued to state that some respondents to the survey also "suggested that REGO market reform is necessary". Calls included giving REGOs only to unsubsidised renewables generation, a greater focus on additionality requirements when presenting REGOs for FMD and improved transparency to consumers.
He added that green certificate markets have been "the subject of much debate" amid the rise in demand for renewable energy tariffs alongside stricter national emissions targets and the uncertainty of EU Guarantees of Origin treatment with Brexit.
"Nonetheless, green certificate markets are set to continue to develop," he added.