REGO loophole could be used for greenwashing

Energy supplier Good Energy has been drawing attention to the potential exploitation of Ofgem’s Renewable Energy Guarantee of Origin (REGO) scheme. A REGO certificate is produced by energy regulator Ofgem when a renewable generator produces one MWh of electricity. This REGO certificate is meant to prove the renewable source of the energy. These certificates are then bought by energy suppliers who wish to supply renewable energy to consumers, and prove the amount of renewable energy in their fuel mixes. However, according to Good Energy, it is possible for suppliers to trade and purchase REGOs without purchasing the renewably-sourced electricity. By stocking up on REGOs, companies can claim to offer 100 per cent renewable energy tariffs without holding contracts with renewable producers.

Good Energy has pointed at Shell Energy, who recently acquired energy supplier First Utility, as an example of this practice. First Utility’s most recent fuel mix disclosure showed renewable sources only accounting for 3.7 per cent of the fuel mix. A week after the acquisition, Shell’s fuel mix disclosure showed 100 per cent renewable sourcing. Good Energy claims that the purchasing of surplus REGO certificates at costs as low as one pound per customer per year explains this sudden change.

Good Energy was given a permanent exemption from Ofgem’s price cap in August, joining renewable energy suppliers Ecotricity and Green energy UK as the only providers with energy tariffs that Ofgem considers 100 per cent clean.

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