Pager Power previously wrote an article about companies exaggerating renewable energy claims using Renewable Energy Certificates (RECs) as evidence of the use of renewable energy sources. It was concluded that the use of these certificates could mislead customers to believe that a company is using more renewable energy than it actually is.
This is an example of ‘greenwashing’ where a product, service or policy appears more ‘environmentally friendly’ than it is in reality. It is often achieved through deceptive marketing and advertising, and the use of misinformation.
REGOs and Decarbonisation
This month, Cornwall Insight produced a research paper  on the efficacy of renewable energy guarantee of origin (REGO) certificates. The work was commissioned by OVO Energy, a major energy supplier based in the UK. Some of the important conclusions of the report are:
- REGOs are not increasing the amount of new renewable energy generation capacity;
- The costs of REGOs are much higher than the potential Contract for Difference (CfD) cost saving;
- This increased cost gets passed onto GB consumers, who are already paying towards supporting existing renewables through policy levies on their electricity bills, at a time when bills are already high.
The report summarises that “The majority of REGO trading has, therefore, had little impact on the development of the current GB renewables fleet, and trading in REGOs is not expected to drive additional renewable generation buildout in the future.”
Interestingly, Cornwall Insight found that 81% of consumers incorrectly believe that a REGO-backed tariff supports more new renewable generation capacity to be come available . It also found that nine out of ten homeowners think that their property is directly served with 100% renewable electricity, rather than understanding that REGOs effectively ‘offset’ their high-carbon electricity use.
As a result of this research, OVO Energy have recently announced that they will stop investing in REGO certificates, as a part of their refreshed ‘Path to Zero’ plan . They plan to invest into alternative methods of reducing energy sector emissions that are more effective, and less misleading, such as smart metering, energy efficiency improvements in customer homes and schemes whereby customers receive money off their bill for shifting energy use away from peak periods.
In a speech on 18th April 2023, OVO’s chief executive Raman Bhatia said: “Greenwashing is a luxury no one can afford. By making this change we’ll save consumers money and reinvest in true green energy, and we hope others will follow our lead.”
About Pager Power
 T. Andrews and A. Moss, “REGOs and Decarbonisation,” Nature Climate Change, April 2023. [Online]. Available: https://www.cornwall-insight.com/wp-content/uploads/2023/04/OVO-Energy-Ltd-REGOs-and-Decarbonisation.pdf?utm_source=website&utm_medium=website. [Accessed 19 April 2023].
 S. George, “OVO to end use of renewable energy certificates over greenwashing concerns,” edie, 18 April 2023. [Online]. Available: https://www.edie.net/ovo-to-end-use-of-renewable-energy-certificates-over-greenwashing-concerns/. [Accessed 19 April 2023].
Thumbnail image accreditation: Thomas Richter (January 2016) on Unsplash.com. Last accessed on 26th January 2023. Available at: https://unsplash.com/photos/B09tL5bSQJk