REGOs vs ROCs: What businesses need to know

Renewable energy certificates can be confusing, especially as governments initiate changes and develop new policies. Having clarity about the different types of certificates will help businesses navigate the world of renewable energy.

What are the different types of renewable energy certificates?

There are two main types of certificates to consider: Renewable Energy Guarantees of Origin (REGOs) and Renewable Obligation Certificates (ROCs). While both serve important purposes, it’s crucial for businesses to understand that it’s REGOs that can be applied to businesses and utilised as part of their procurement strategy. Both types of certificates aim to support the growth of sustainable energy in the UK. However, only REGOs can be utilised by businesses, as ROCs are exclusively for energy generators.

What are ROCs?

ROCs are issued as accreditation to renewable energy generators and are linked to the amount of energy they produce. They were first introduced in 2002 by the UK government as part of the Renewable Obligation (RO) scheme. However, since 2013, the RO has been replaced by the Contracts for Difference (CfD) scheme.

For every megawatt-hour (MWh) produced, single or multiple ROCs can be accredited, depending on the quantity of renewable energy generated. ROCs can be sold or traded to energy suppliers, who are required to submit them as proof of their renewable energy obligations to Ofgem, making them a valuable resource for suppliers.

What is a REGO?

REGOs are certificates that provide evidence of the exact amount of electricity generated from renewable sources. One REGO is issued per MWh generated, making it easier for consumers to demonstrate their renewable energy usage. One key feature of REGOs is that they must be purchased in bundles alongside energy.

REGOs were originally introduced in 2005 as part of the EU’s Renewable Energy Directive. However, since Brexit, UK REGOs are no longer exchanged directly with the EU’s Guarantees of Origin (GoOs).

What’s the role of REGOs and ROCs in today’s market?

For generators registered before 2017, ROCs will continue to apply until 2037. The value of ROCs today is determined by supply, demand, and interest rates. However, for new renewable installations, the CfD scheme is now the primary support mechanism, as it offers stability with fixed-rate prices, helping to reduce uncertainties around electricity price volatility.

With the urgency of achieving Net Zero becoming increasingly clear for businesses, REGOs remain in high demand. They are valuable for businesses aiming to align their energy procurement decisions with sustainability and Net Zero objectives. Having a verified source of renewable energy helps businesses maintain confidence in their ability to be transparent with stakeholders on their journey to Net Zero.

Why focus on REGOs now?

Since 2023, the supply of UK REGOs has decreased, and their prices have increased, primarily due to the lack of recognition in Europe. However, they are still available for use in Great Britain and Northern Ireland, enabling energy suppliers to remain compliant with Fuel Mix Disclosure (FMD) obligations.

At Amber, we help clients strategically source REGOs that align with their values and objectives, ensuring energy claims can withstand stakeholder and auditor scrutiny.

To learn more about REGOs, read our blog: Navigating REGOs: What are they and are they good for businesses?

Future of renewable energy certificates

After the RO scheme expires in 2037, the UK government will fully transition to the CfD system. The future of REGOs is continuously being improved, with potential new initiatives on the horizon. As initiatives like RE100 and the GHG Protocol evolve, we may see the importance of REGOs grow as renewable energy certificates begin to play a role in emission reporting frameworks.

How can Amber help?

We understand that REGOs should be seen as part of a broader Net Zero journey, not a standalone solution. We can advise clients on how to use REGOs, often alongside energy efficiency measures.

If you are interested in discussing REGOs or your energy procurement strategy, please get in touch. We offer a range of solutions to help you meet your goals.