I still don't understand why REGOs are so bad, can someone try to explain?

mrodent33

I've been with Octopus for about 3 years and obviously they call their LX 100% green, and have lots of pages justifying this claim on their site.

Before going any further, I am fully aware that a lot of the energy bought by Octopus, and entered into the Grid for the purpose of my LX consumption, has not been generated from a sustainable source.

Unless I have misunderstood, REGOs are a way of, if not "overcoming" that issue, at least trying to neutralise it. I have read this Ecotricity page on the subject, and I still don't understand. In particular I don't understand why REGOs are (said to be) so cheap. 

Is the key to understanding this issue that there are vast numbers of consumers (perhaps not just domestic consumers) who don't give a toss what kind of source their energy is coming from? Otherwise, wouldn't each precious kWh from sustainable sources be carefully bought by the various consumers (of all kinds) up and down the country? How come vast amounts of REGOs are being produced (e.g. by a given windfarm somewhere) and are nevertheless cheap as chips, in 2023?

NB I've also got the impression that there's an international dimension to this which may make things even more impenetrable.

If my description of this situation is anything like close to the truth, this would imply that the reasoning behind "Level 3" on the Ecotricity page is puzzingly disingenuous. In the sense that it's a diversion to imagine that suppliers MUST generate their own LX. In reality, if all consumers across the board were demanding LX from sustainable sources, the price of REGOs would rise and create demand for construction of new renewable capacity. So the real question would then be: who are these consumers who can't give a toss about sustainable LX?

If you speak from a position of knowledge about these matters I'd be happy to hear what you have to say.

Alnat1

I'd say a huge percentage of the population isn't in a position to care where their energy/food/clothes etc. come from, they only know that it's the cheapest option. They don't have enough money to be able to afford "sustainable" alternatives. Not really about whether they give a toss or not.

mrodent33

@Alnat1

I personally would say a "significant percentage" are in such a dire situation as that. I think a huge percentage of the population are in fact spending lots of money on cars, homes, holidays, clothes. And I also think that when you look into it the 100% Green tariffs (e.g. Octopus) seem no more expensive than the ones which promise nothing regarding Green credentials.

But OK: one vote in favour of this indeed being the explanation for the alleged ineffectual nature of "REGOs-as-a-mechanism-for-change".

Dolor

This explains all you need to know:

https://www.goodenergy.co.uk/business/insights/renewable-energy-certificates-explained/

bristolleedsfan

https://www.ovoenergy.com/blog/path-to-zero#:~:text=REGOs enable the tracking of renewable energy so,grid from renewable sources in that same year.

mrodent33

Dolor said:

This explains all you need to know:

https://www.goodenergy.co.uk/business/insights/renewable-energy-certificates-explained/

No, unfortunately it doesn't. You posted that link in a question I posed a couple of days ago. It precisely does not explain why REGOs are so cheap, as explained in my question here.

Dolor

mrodent33 said:

Dolor said:

This explains all you need to know:

https://www.goodenergy.co.uk/business/insights/renewable-energy-certificates-explained/

No, unfortunately it doesn't. You posted that link in a question I posed a couple of days ago. It precisely does not explain why REGOs are so cheap, as explained in my question here.

Market forces… and unintended consequences of a well-intentioned but poorly thought through scheme!

‘The price suppliers pay for REGOs is based on a simple supply/demand economic, and because there is currently sufficient renewable generation capacity to meet demand, that price is low at c. 30p-50p per certificate which equates to only around 1% of the wholesale cost of electricity. In addition, almost all this renewable capacity is subsidised generation – so is already being paid for through consumer bills.

These economic conditions mean that unfortunately this system does nothing to support new, unsubsidised, renewable generation, and nothing to cut carbon emissions.’

mrodent33

bristolleedsfan said:

https://www.ovoenergy.com/blog/path-to-zero#:~:text=REGOs enable the tracking of renewable energy so,grid from renewable sources in that same year.

"The buying and selling of REGOs has little to no impact on whether the UK grid gets greener.  ... This is because the majority of renewable generators are supported by subsidies, managed by the government and paid for by energy consumers through energy bills."

Sorry, but that's a complete non-sequitur. The second part does not explain the first.

The buying and selling of REGOs should exert massive distortion on the market of electricity generation. Why isn't it doing so?

I find that OVO page interesting, but full of puzzles: "One way to do that is to work directly with renewable generators, giving them increased revenue per unit of energy they sell us."

So... why would it be necessary to abandon REGOs  in order to achieve that? Secondly: how much increase? Thirdly, does this mean higher bills for their consumers?

If they choose to "work directly" with renewable generators (and I presume that means buying electricity from them!) they're going to get given REGOs anyway, unless they say "Ah nah ... just sell 'em off to whoever you want".

Again, there is no clear explanation of why REGOs are depicted as being too cheap to make a difference.

mrodent33

Dolor said:

Market forces… and unintended consequences of a well-intentioned but poorly thought through scheme!

‘The price suppliers pay for REGOs is based on a simple supply/demand economic, and because there is currently sufficient renewable generation capacity to meet demand, that price is low at c. 30p-50p per certificate which equates to only around 1% of the wholesale cost of electricity. In addition, almost all this renewable capacity is subsidised generation – so is already being paid for through consumer bills.

These economic conditions mean that unfortunately this system does nothing to support new, unsubsidised, renewable generation, and nothing to cut carbon emissions.’

Thanks. But that explanation, "sufficient renewable generation capacity to meet demand" begs a pretty big question. 

I just tried to find out the UK energy mix in 2023 and found most diagrams infuriatingly annoying, because a large segment is designated "IMPORTS", between 14% and 25% maybe depending on the graph. Does this cover LX imported from France, or is it just imports of gas from Norway...? It, er, kind of matters to know whether these "imports" are or are not hydrocarbons.

Anyway, the UK energy mix is good but could get better. I presume it will get worse as we go into winter. But in any event, it appears that total hydrocarbons (including "imports", those well-known hydrocarbons... or are they?) amount to about 50% currently of LX generation.

This is the whole nub of the question: if every consumer were demanding green electricity then "supply" would not be equivalent to "demand". So who are the people or companies which are NOT demanding green electricity?

It seems like a displacement of responsibility to me to say that the REGO scheme is crap due to "lack of demand". Demand is not some phenomenon of nature. Some people may of course instance poverty for their failure to sign up for green tariffs, but in fact it turns out that, as I say, there's usually no difference between Octopus and some generic supplier which does not make any claims about sustainably sourced LX. Obviously the latter don't have to buy REGOs, and thereby do their little bit to destroy Demand for REGOs, and their little bit to make the REGOs scheme ineffective. It's a willed choice on the part of such people and/or entities.

matt_drummer

I think you are completely out of touch with reality.

Do you ever watch the news or read topics on forums such as this?

Many, many people don't care where their electricity comes from or how it is generated.

They are mainly concerned with how much it costs.

I doubt very much that you need to be in poverty to be concerned about energy costs.

I expect that the majority of people are mainly concerned about cost.

Isn't it obvious?

mrodent33

@matt_drummer

This country has an official population of 67 million. The real number is probably more than 75 million. You may know many people who are in the situation you describe and you may have the impression that everyone is in that boat. It's not true.

In fact all the statistics demonstrate that this is still an affluent country. As do the many tens of thousands who take multiple holidays each year, buy houses costing 00s of 000s of pounds throughout this country, change their cars every 3 years, buy endless gadgets and consumer goods, fine wine, etc.

So I don't accept that your perspective is accurate. It may be that in this forum there is a significantly high proportion of poorer people. This country, the UK, is most definitely not, despite the Tories' long years of utter mismanagement and the disaster of Brexit, a poor one.