Renewable Energy Certificates: REGOs and GoOs

In 2023, the UK issued approximately 90 million Renewable Energy Guarantees of Origin — one REGO for every megawatt-hour of eligible renewable electricity generated in Great Britain. Those certificates were then available for purchase by energy suppliers to back their green tariff products. The certificate can cost as little as 20 pence. The electricity it represents may have been generated months earlier. And yet a business signing a “100% renewable” electricity contract in good faith may be buying little more than the administrative record that a unit of renewable electricity was, at some point, generated somewhere in the country. Understanding what REGOs are — and what they aren’t — matters for any business making green tariff decisions or sustainability commitments.

What a REGO Is and How It Works

A Renewable Energy Guarantee of Origin (REGO) is a certificate issued by Ofgem under the EU Guarantee of Origin scheme’s UK equivalent. Each REGO represents one megawatt-hour (MWh) of electricity generated from an eligible renewable source — wind, solar, hydro, biomass, or similar. Generators apply for REGOs through Ofgem’s Renewables and CHP Register, and certificates are issued for each MWh of metered renewable generation.

REGOs can be traded independently of the physical electricity they represent. A generator in Scotland sells its electricity into the wholesale market at the prevailing price. It also receives REGOs, which it can sell separately to energy suppliers who want to make renewable claims. The electricity flows into the national grid and is consumed by whoever happens to need it. The REGO documents the fact of generation but creates no physical link between that generation and any particular consumer.

The Additionality Debate

The central criticism of the REGO market is the question of additionality: does purchasing a REGO-backed tariff fund new renewable capacity, or does it simply pay for the administrative record of capacity that would have been built regardless? The honest answer, in most cases, is the latter. The UK has substantial existing renewable capacity that generates REGOs as a byproduct of selling electricity at wholesale market prices. Buying those REGOs does not change the investment case for the generator or the probability that additional capacity will be built.

Power Purchase Agreements (PPAs) — direct contracts between a business and a specific renewable generator — are the alternative that does have additionality implications. A long-term PPA at a fixed price provides the generator with revenue certainty that can support new project finance. The link between the business’s purchasing decision and the financing of new renewable capacity is more direct than REGO purchase.

GoOs: The European Context

Guarantees of Origin (GoOs) are the European equivalent of REGOs, issued under the EU’s Renewable Energy Directive. Following Brexit, UK-issued REGOs are no longer mutually recognised with EU GoOs, and vice versa. For UK businesses with operations in Europe, or those reporting under frameworks that require EU-standard renewable claims, GoOs from EU-based renewable generators may be more appropriate than UK REGOs. The GoO market is more liquid and better established than the REGO market; prices are broadly comparable.

The Procurement Angle: What Green Tariffs Actually Cost

The practical procurement question for businesses considering green tariffs is straightforward: how much more are you paying, and what are you getting for it? REGO-backed green tariffs typically cost 0.3 to 1.5p/kWh more than equivalent standard tariffs, reflecting the REGO certificate cost plus supplier margin. PPA-backed tariffs carry a larger premium, though this varies by market conditions and contract term.

For businesses where the green claim is primarily for marketing or basic ESG optics, a REGO-backed tariff may be fit for purpose at modest cost. For businesses with Science Based Targets, investor-facing sustainability commitments, or supply chain customers who will interrogate the quality of their green claims, the additionality question matters — and PPA-backed supply or direct investment in generation is the more defensible position.

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FAQ

Our energy supplier says our contract is “100% renewable” — how do I verify what’s actually backing that claim? Ask your supplier for the fuel mix disclosure and the REGO certificate retirement records for your supply period. Ofgem requires all licensed suppliers to publish an annual fuel mix disclosure, but this is a portfolio-level figure and may not reflect the specific tariff you’re on. For contract-level verification, ask for documentation of REGO retirements associated with your account — a reputable supplier should be able to provide this.

We’ve been told we can report zero Scope 2 emissions if we’re on a green tariff. Is that right? Under the market-based accounting method in the GHG Protocol, yes — a REGO-backed renewable electricity supply has an associated emissions factor of zero. However, many frameworks require or encourage disclosure of both market-based and location-based Scope 2 emissions. The location-based figure uses the grid average emissions factor regardless of your tariff. For investor or customer-facing ESG reporting, presenting both figures and being transparent about the basis of your green claim is increasingly expected.

We’re a small business spending about £15,000 a year on electricity. Does a green tariff make sense for us? At that spend level, the premium for a REGO-backed green tariff is likely to be £500 to £1,500 a year — a material but not prohibitive cost for a business that wants to make a genuine green claim. The more important question is whether you’re on a well-procured contract in the first place. A business overpaying by 15% on a standard contract and then adding a green premium on top is spending more than it needs to for both the electricity and the certificate. Get the base procurement right first, then consider the green question as a second step.