Tanya Weaver Fri 20 Sep 2024

Collected at: https://eandt.theiet.org/2024/09/20/major-uk-companies-call-electricity-market-reform-boost-renewable-capacity-and-drive

Major UK companies have published a report with recommendations to reform the government’s Renewable Energy Guarantees of Origin (REGO) scheme to ensure it supports grid decarbonisation by 2030.

Led by international nonprofit organisation Climate Group, the group consists of BT Group, British Land, Coca-Cola Europacific Partners, EnergyTag, Good Energy, Google, Pearson, Unilever, Unite Students, Vodafone UK and Virgin Media O2.

These signatories have published a report – Unlocking corporate investment in UK renewables – that lays out recommendations to reform the REGO scheme to ensure it more effectively supports the mission of grid decarbonisation.

The REGO scheme was designed to provide transparency to consumers about the proportion of electricity that suppliers source from renewable electricity. It does this by providing REGO certificates to demonstrate electricity has been generated from renewable sources.

The report argues that the REGO market has become increasingly volatile since Ofgem (and some other reporting bodies) stopped recognising EU energy attribute certificates in April 2023. 

This volatility has caused significant increases in the price of REGO certificates, which has been fluctuating between £0.2/MWh and £25/MWh over the past two years.

The report says this volatility is not only affecting the UK’s already high energy prices, but is also hampering the competitiveness of UK businesses.

Sam Kimmins, director of energy at 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.”

The report sets out three areas that the signatories believe could transform the current system:

  1. Greater transparency in pricing
    Lack of transparency combined with unpredictable pricing has made it difficult to determine fair market value for REGOs. Improved visibility of bids, offers and volumes through broker platforms or Ofgem would help boost market confidence.
  2. More accurate electricity matching
    Granular certification, with electricity matched locally and closer to real time (hourly instead of annually), would provide more accurate information to businesses, support solutions to meet that demand and build a stronger basis for renewable claims.
  3. Boosting renewable capacity
    The current system is not adequately supporting the roll-out and long-term investment in new renewables. REGOs should be repurposed to drive more investment in renewable generation, supporting the government’s ambitious plans for a zero-carbon grid by 2030.

Rich Marsh, sustainability director at BT Group, said: “The recent volatility in the REGO market underscores the urgent need for reform to ensure greater transparency and certainty for businesses that 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.”

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