A Business Guide to Renewable Energy Guarantees of Origin (REGO) Certificates

Across the UK, companies are working towards shrinking their carbon footprint and showing they’re serious about renewable energy. It’s helpful for businesses to understand the benefits of renewable energy as these days, customers, investors, and regulators all want to see real action and proof, not just empty promises.

So, how can businesses prove they’re making the switch to green electricity? That’s where Renewable Energy Guarantees of Origin (REGO) certificates come in. These certificates offer a straightforward way to show your business is using renewable power. But there’s still a lot of confusion about what REGOs actually do, their benefits, and their limitations. This guide breaks it all down, helping you decide if REGOs are the right choice for your sustainability strategy.

What is a REGO Certificate?

A Renewable Energy Guarantee of Origin (REGO) certificate is an official document issued by Ofgem, the UK’s energy regulator, that certifies a megawatt-hour (MWh) of electricity, paid for by a business, has been generated from renewable sources.

The REGO scheme is designed to provide transparency to energy consumers, allowing businesses to verify that the electricity they purchase has come from renewable generation. The certificates serve as proof that energy suppliers have sourced electricity from wind, solar, hydro, or other renewable sources.

However, a REGO certificate in the UK does not mean that a business is directly receiving green energy through its power supply. Since the electricity grid is a mix of all energy sources, including fossil fuels, the REGO system allows suppliers to attribute renewable energy generation to their customers, even though the actual electrons powering their business may be from mixed sources.

How Do REGO Certificates Work?

When a renewable energy generator (such as a wind farm or solar farm) produces electricity, Ofgem issues a REGO certificate for each megawatt-hour (MWh) of energy generated. These certificates are then purchased by energy suppliers, who allocate them to business customers purchasing green energy tariffs.

For businesses, REGOs provide a mechanism to claim they are using renewable electricity, even if they are connected to the national grid. When an energy supplier sells a business a renewable tariff, they match the business’s electricity consumption with an equivalent number of REGOs, certifying that the amount of electricity was generated from renewable sources.

Direct Renewable Energy vs REGO-Backed Energy

• Direct renewable energy procurement: Some businesses choose to purchase power directly from renewable sources through Power Purchase Agreements (PPAs), ensuring their energy use directly supports green generation.

• REGO-backed energy: Instead of buying electricity directly from a renewable source, businesses can purchase REGOs, which provide a certification that a portion of the energy they consume has been matched with renewable generation.

It’s important to note that while REGOs offer flexibility, they do not guarantee that businesses are directly supporting new renewable energy projects, which has led to some backlash.

Benefits of a REGO Certificate for Businesses

Whether you’re looking to enhance your brand, meet regulatory requirements, or build trust with eco-conscious consumers, REGOs can play a key role in your sustainability strategy. Here’s how they can benefit your business:

1. Proving Sustainability Credentials

Consumers and stakeholders are increasingly prioritising sustainability. Having REGO-backed electricity allows businesses to confidently state they are using renewable energy, reinforcing their green credentials.

2. Meeting Net-Zero Targets

With the UK Government’s commitment to achieving net-zero carbon emissions by 2050, businesses are expected to take action. REGOs help companies to align their energy consumption with these national sustainability goals.

3. Compliance and Reporting

Many businesses must report their carbon footprint as part of regulatory frameworks such as SECR (Streamlined Energy and Carbon Reporting). Using REGO-backed electricity simplifies compliance with such reporting requirements.

4. Enhancing Brand Reputation

Sustainability-focused consumers and investors are more likely to support businesses that demonstrate a clear commitment to green energy. Choosing a REGO-backed energy tariff can help build trust and differentiate a brand in the market.

Limitations of REGO Certificates

While REGO certificates play a role in verifying renewable energy usage, they’re not without their shortcomings. Critics argue REGOs can sometimes be used in ways that do not genuinely support the transition to renewable energy.

Here are some of the potential limitations associated with REGO certificates:

1. Risk of Greenwashing

One of the main criticisms of REGOs is that some suppliers use them to market ‘green’ tariffs without actually sourcing renewable energy directly. Some suppliers purchase REGOs separately from fossil-fuel-based electricity, allowing them to claim a tariff is ‘100% renewable’ while still relying on non-renewable energy sources. This practice can be misleading and contributes to concerns about greenwashing.

2. No Direct Support for Renewable Energy Expansion

Purchasing REGO-backed energy does not necessarily contribute to the development of new renewable energy projects. Unlike PPAs, which directly fund renewable infrastructure, REGOs simply allocate certificates from existing generation.

3. Transparency Concerns

Not all green energy tariffs are created equal. Businesses need to be cautious and ensure they choose suppliers that genuinely source renewable energy rather than relying solely on REGOs for green credentials.

How to Get a REGO Certificate For Your Business

1. Choose the Right Renewable Energy Supplier

Not all energy suppliers provide genuine green energy. Look for suppliers with clear commitments to renewable sourcing rather than those that only purchase REGOs to offset fossil fuel-based energy.

2. Assess Green Energy Tariffs Carefully

Some tariffs are marketed as ‘100% renewable’ but may rely on REGOs rather than direct renewable procurement. Investigate whether a supplier is genuinely sourcing green energy or just using certificates.

3. Compare Renewable Energy Options

Consider the difference between:

A 100% renewable energy plan where the supplier sources energy directly from renewable generators.

A standard energy plan that includes REGOs but may still be based on fossil fuels.

Businesses should prioritise suppliers who are transparent about their energy-sourcing practices.

Are REGO Certificates Right for Your Business?

REGO certificates offer businesses a way to validate their use of renewable electricity, enhance sustainability credentials, and help with compliance. However, companies should be mindful of their limitations and ensure they are selecting energy suppliers that truly prioritise renewable sourcing.

If sustainability is a core value for your business, consider going beyond REGOs by:

• Choosing suppliers with strong commitments to renewable generation.

• Exploring direct renewable energy procurement through PPAs.

• Supporting initiatives that drive the development of new renewable projects.

By making informed decisions about energy sourcing, businesses can not only meet their sustainability targets but also contribute to a greener future.