Major UK businesses are asking energy secretary Ed Miliband to speed up reforms to the Renewable Energy Guarantees of Origin (REGO) scheme to expand the rollout of renewable energy.
Led by the Climate Group, the ten signatories have written a report laying out several recommendations for market reform. The signatories are the Climate Group, the BT Group, British Land, Coca-Cola Europacific Partners, EnergyTag, Good Energy, Google, Pearson, Unilever, Unite Students, Virgin Media O2 and Vodafone UK.
The REGO scheme was designed to provide consumers with clear information about the proportion of electricity that suppliers source from renewables, as well as allowing business to demonstrate their green energy procurement in emissions reporting. However, the signatories of the report note several faults with the current scheme, and has suggested multiple reforms to the system.
The recommendations suggest that reforms to the REGO market should focus on more accurately matching production and consumption of renewable electricity. One of the suggestions for implementing this would involve shifting to hourly matching of supply and consumption of renewables, as opposed to the current annual system.
This is not an entirely novel concept, as some energy suppliers offer this an option for their business customers. In October 2023, Good Energy opened hourly renewable energy matching for its business clients in an effort to provide an “extra layer of transparency” above and beyond the REGO scheme.
The volatile pricing of REGO certificates was also criticised by the report, which noted that REGO prices fluctuated between £0.2/MWh and £25/MWh over the past two years, and added that with the UK’s already high energy prices, the additional REGO costs are hampering the competitiveness of UK businesses.
The report also argues that the current REGO scheme does not incentivise or support the increased rollout of renewable power and calls for the scheme to be redeveloped and repurposed to drive more investment into renewable energy generation.
Sam Kimmins, director of energy at the Climate Group said: “Reform is urgently needed to ensure our energy certification system is fit for purpose, incentivising and enabling business to invest even more in the UK’s renewable future. We ask the government to consult with industry to build a revised and improved REGO scheme able to boost renewable capacity, create fairer pricing, leverage competitiveness and drive faster grid decarbonisation.”
Rich Marsh, sustainability director at BT Group added: “The recent volatility in the REGO market underscores the urgent need for reform to ensure greater transparency and certainty for businesses who want to accelerate the transition to net zero. We recognise the role that businesses must play in this process, and we urge the government to work with industry to create a more predictable and effective system that supports long-term investments in renewable energy and decarbonises the UK grid.”
