Rising REGO Prices in the UK: What Businesses Need to Know

What are REGOs and why are their prices rising in the UK?

REGO certification was designed to give energy consumers transparency on the amount of energy that comes from renewable generation. Businesses can demonstrate their commitment to sustainability by choosing an energy contract with REGO certification. 

Businesses that opt for a renewable energy contract can decide whether to purchase the REGO certification. We only provide renewable energy contracts with REGOs, otherwise you cannot prove where your energy was sourced. This makes any sustainability commitments or proof of compliance difficult to back up.

REGO certificates often require an additional fee to purchase, which has been increasing since 2022 at an alarming rate for many businesses. In the last two years, the price has gone from £0.02/MWh to a high of around £25/MWh. Currently, REGOs are priced between £13 – £15/MWh having found some balance since February 2024. 

Factors driving rising REGO prices in the UK

A call for the UK government to do more

In June 2024, Climate Group and BT Group hosted a roundtable with some of the UK’s largest purchasers of renewable energy present. Known as RE100, this initiative brings together over 400 companies committed to using 100% renewable energy. They have called on the Energy Secretary, Ed Milliband, to look into the costs of REGOs to bring them down and increase access to clean energy in the UK. Milliband committed to removing the roadblocks to green energy in the same week that David Lammy announced the Global Clean Power Alliance to speed up the global shift to renewable energy. 

Currently, there are 212 RE100 members with UK operations, representing around 5% of the UK electricity demand (16TWh/yr), committed to decarbonisation and a net zero economy. These members have raised concerns that the scheme is not unlocking the support to increase renewable energy capacity and that an overhaul of the scheme is needed. 

BT Group’s sustainability director Rich Marsh told the roundtable: 

“We recognise the role that businesses must play in this process [to accelerate the transition to net zero], 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.”

Recommendations made by RE100

The recommendations made by the RE100 mean that there would be greater transparency for suppliers and buyers, and this would help with increasing the capacity and availability of renewable energy. They advise that there are three main ways to reform this scheme: 

Market participants want more visibility with REGO pricing, creating a more level playing field for everyone who wants to use the scheme. Smaller businesses that want to decarbonise and play their part in the net zero economy are being unfairly priced out of the market and cannot assess fair market value as easily. 

There are also calls for an independent authoritative body to oversee the whole scheme, help the government with regulations and support participants in finding the right deal with suppliers. 

However, the reforms need to focus on accurately matching the production and consumption of renewable energy. This will increase visibility and understand where the energy demand is coming from. 

The Climate Group and RE100 members also think improvement in the visibility of bids offers and volume through broker platforms will allow participants to assess fairer market value and gain confidence with the market, brokers, and pricing. 

If you want to look at how you can start your energy sustainability plan, get in touch with our specialists today.

This article was updated October 2024.