Industry Updates

REGO Market in 2025: A Turning Point for UK Renewable Certification

James Turnbull
07/07/2025
3 minute read

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The REGO Reckoning

In the UK’s journey towards net zero, Renewable Energy Guarantees of Origin (REGOs) have long served as a cornerstone for verifying green electricity. However, recent market turbulence has cast doubt on their effectiveness. With prices plummeting and corporate confidence waning, the REGO scheme faces a critical juncture. This article delves into the current state of the REGO market, exploring the factors contributing to its decline, and considering the future of renewable certification in the UK.

The Role of REGOs: A Brief Overview

REGOs are certificates issued by Ofgem to renewable electricity generators, with one certificate representing one megawatt-hour (MWh) of electricity produced from renewable sources. These certificates enable suppliers to demonstrate the renewable origin of the electricity they provide, fulfilling obligations such as the Fuel Mix Disclosure (FMD).

Market Downturn: Prices and Confidence Plummet

The REGO market has experienced a significant downturn. Between January and April 2025, average REGO prices fell from £2.56 to just £0.77, marking six consecutive quarters of decline. This sharp decrease is attributed to an oversupply of renewable energy and a shift in corporate purchasing strategies.

The oversupply stems from increased renewable generation capacity, leading to a surplus of certificates. Simultaneously, many corporations are moving away from purchasing REGOs in favour of direct Power Purchase Agreements (PPAs) with renewable energy producers, seeking more tangible contributions to decarbonisation efforts.

Criticisms and Calls for Reform

Critics argue that REGOs have become a tool for greenwashing, allowing suppliers to claim renewable credentials without directly supporting new renewable generation. The inability to trace the specific origin of electricity once it enters the grid further complicates the matter. Notably, in 2023, energy supplier OVO ceased using REGOs, citing concerns over their efficacy in promoting genuine sustainability.

Despite a government call for evidence in 2021 and a summary of responses in 2023, no clear reform plan has emerged. The ongoing Review of Electricity Market Arrangements (REMA) is expected to address issues related to greenwashing and consumer transparency, but many stakeholders are urging for more immediate action .

The Future of Renewable Certification

The current challenges facing the REGO scheme highlight the need for a more robust and transparent system of renewable certification. Potential reforms may include stricter criteria for certificate issuance, enhanced traceability of renewable energy sources, and greater alignment with corporate sustainability goals.

As the UK continues its transition to a low-carbon economy, the effectiveness of mechanisms like REGOs in promoting genuine renewable energy adoption will be crucial. Stakeholders across the energy sector must collaborate to ensure that certification schemes not only verify renewable energy use but also drive meaningful investment in new renewable infrastructure.

Supporting Genuine Renewable Claims with Match Products

For organisations looking to strengthen their sustainability credentials beyond traditional certification schemes, we can also provide match products. These solutions enable businesses to more closely align renewable energy consumption with generation on a half-hourly or hourly basis, offering enhanced transparency and credibility in reporting.

Navigating the Path Forward

The decline in REGO prices and confidence underscores the need for a critical reassessment of renewable energy certification in the UK. While REGOs have played a significant role in the past, evolving market dynamics and sustainability expectations necessitate reforms to maintain their relevance and effectiveness. By addressing current shortcomings and enhancing the integrity of certification schemes, the UK can continue to lead in the global transition to sustainable energy.

For organisations seeking to strengthen their approach to renewable sourcing, options such as match products provide a way to align electricity consumption more closely with renewable generation, delivering higher transparency and credibility. BP Consulting can support businesses in navigating these evolving options and implementing solutions that meet both compliance requirements and ambitious sustainability goals.