The UK’s Renewable Energy Guarantees of Origin (REGOs) scheme is facing a crisis of confidence, with prices plummeting 70% in just three months, according to Cornwall Insight’s latest Green Certificates Survey. The average REGO price dropped from £2.56 in January to £0.77 by April for the 2024–25 Fuel Mix Disclosure period, marking six consecutive quarters of decline. This dramatic slump follows a 2023 spike, when prices briefly topped £15 per certificate due to delays in Contracts for Difference (CfD), supply constraints, and the end of using EU Guarantees of Origin.
The collapse in prices is driven by a surge in renewable supply and softening demand. Corporates are increasingly turning to power purchase agreements (PPAs), while scepticism grows over whether REGOs genuinely drive decarbonisation. Issued by Ofgem to renewable generators for every megawatt hour (MWh) produced, REGOs are intended to demonstrate that electricity suppliers source green energy. However, critics argue they are becoming little more than a greenwashing tool. Once power enters the grid, its origin becomes untraceable, and a growing number of suppliers are abandoning the certificates.
OVO made headlines in 2023 when it ditched REGOs altogether, and others may follow suit as prices slide back to levels not seen since 2021. The dramatic fall in prices raises questions about the future of the scheme and its role in corporate carbon reporting. Despite a 2021 government call for evidence and a 2023 summary of responses, there is still no clear reform plan. Hopes now rest on the long-running Review of Electricity Market Arrangements (REMA), which is expected to launch a new workstream this year on greenwashing and consumer transparency.
Adding to the pressure, the Greenhouse Gas Protocol is reviewing how companies worldwide report electricity-related emissions. This includes questioning whether renewable certificates like REGOs genuinely cut emissions or if they are slowing down genuine change. Set up in 2003 under an EU directive, the REGO scheme was never meant to be the backbone of corporate carbon reporting. However, its current trajectory suggests that significant reforms or even a complete overhaul may be necessary to restore confidence and ensure it remains a credible tool for decarbonisation.
The collapse in REGO prices and the growing scepticism over their effectiveness could have significant implications for the renewable energy sector. If corporates continue to shift towards PPAs and away from REGOs, it could impact the revenue streams of renewable generators that rely on the certificates. Additionally, the uncertainty surrounding the future of REGOs may deter investment in renewable projects, potentially slowing down the UK’s transition to a low-carbon economy. The sector is now calling for urgent clarity and reform to address these challenges and ensure that the UK’s renewable energy goals remain on track.