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

matt_drummer

mrodent33 said:

@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.

I suspect that there will be lots of people along to support my assertion rather than yours.

Do some reading, not very many people care about anything other than cost.

I lack empathy at times, I'm pretty sure you haven't inherited my missing part!

QrizB

mrodent33 said:

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?

I haven't checked myself, but I've seen it stated that every domestic electricity supplier claims to be 100% green.

The problem with REGOs is where they come from.

Say a wind farm generates 1kWh of electricity. For having done so, they receive a REGO.

The REGO and the electricity are not linked. They can then sell their 1kWh of electricity *without passing on the REGO*.

So, for example, Ecotricity can buy that 1kWh of electricity and tell their customers that they are receiving zero-carbon electricity.

But the generator can also sell the REGO to Octopus and Octopus can hold it up to claim that they buy REGOs to cover all the energy they supply, so they are also green.

The kWh from the wind farm gets double-counted; once when the electricity itself is sold, and once by the REGO buyer.

Because over 40% of the UK's electricity gets REGOs, while domestic consumers are only 30% of the market and commercial suppliers are less likely to buy them (your local light industrial unit isn't likely to care), there's a surplus of REGOs and the price is low.

mrodent33

@QrizB ... OMG! If what you say is true (about double-counting, or the possibility of it), that is absolutely absurd. And explains much. It also explains why my brain has been hurting as I have once again (I have tried before) tried to wade through some of the specious arguments, non-sequiturs and irrelevancies of the so-called explanations put out by some of these companies.

As an Octopus customer I'm going to write to them and ask them whether this double-counting can indeed happen. The scenario you've described would have been foreseen by the average 7-year-old if they'd be called upon to design a REGO system.

Yes, and also... this thing about "light industrial units" (I believe there are also a few extremely high-consumption industrial operators remaining in the UK), and their attitudes, is also what I was wondering about: whether enough indifference on their part could scupper the effectiveness of the scheme. But I repeat: that would be a matter of individual (corporate) culpability: "Demand" is not some physical aspect of the universe over which humans have no influence. I.e. saying "REGOs don't work because there isn't enough Demand" doesn't invalidate the idea of REGOs (although double-counting certainly would).

QrizB

I don't know if this is where I originally read it, but it's as good a link to provide as any.

https://www.goodenergy.co.uk/blog/shell-energys-renewable-promise-highlights-the-problem-with-regos/

As originally designed, REGOs were an effective simplification; when a renewable generator produces one megawatt hour (MWh) of electricity (about a third of the electricity an average household will use over a year), Ofgem electronically produce one REGO to prove its source. Meaning that instead of reviewing the provenance of all of their supply contracts to check their sources, all energy suppliers have to do is count up how many REGOs they have to calculate how green their electricity supply is.

So far so good. But unfortunately, it is possible for a supplier to source REGOs without also purchasing the electricity they relate to.

This wasn’t a major issue in the early days of the scheme as there was only a small amount of trading in REGOs without their power. However, now this loophole is increasingly being taken advantage of at significant scale, with more suppliers claiming to offer ‘100% renewable’ tariffs, despite holding little or no contracts with renewable generators.

Or, if you think Good Energy have a vested interest, there's this from the BBC in 2021:

https://www.bbc.co.uk/news/business-56602674

REGO stands for Renewable Energy Guarantees of Origin. When an renewable unit of electricity is generated - for example, by a wind turbine - the regulator Ofgem issues a REGO to prove that this energy is green.

The person who owns that wind turbine is now allowed to sell the electricity and the REGO separately.

It means there is a marketplace where leftover REGOs are traded, and there are enough of them "going spare" that energy suppliers are able to purchase enough to cover the proportion of fossil fuels they sell to customers.

Some industry experts are supportive of REGOs and many agree that they have a role to play in expanding and supporting the renewable energy market.

The problem is how much they cost. They are cheap.

An energy supplier can make electricity from the wholesale market, which includes fossil fuels, look entirely green for just £1 or £2 per customer per year. The majority of UK energy suppliers are doing this to some extent.

littleteapot

QrizB said:

I don't know if this is where I originally read it, but it's as good a link to provide as any.

https://www.goodenergy.co.uk/blog/shell-energys-renewable-promise-highlights-the-problem-with-regos/

As originally designed, REGOs were an effective simplification; when a renewable generator produces one megawatt hour (MWh) of electricity (about a third of the electricity an average household will use over a year), Ofgem electronically produce one REGO to prove its source. Meaning that instead of reviewing the provenance of all of their supply contracts to check their sources, all energy suppliers have to do is count up how many REGOs they have to calculate how green their electricity supply is.

So far so good. But unfortunately, it is possible for a supplier to source REGOs without also purchasing the electricity they relate to.

This wasn’t a major issue in the early days of the scheme as there was only a small amount of trading in REGOs without their power. However, now this loophole is increasingly being taken advantage of at significant scale, with more suppliers claiming to offer ‘100% renewable’ tariffs, despite holding little or no contracts with renewable generators.

Or, if you think Good Energy have a vested interest, there's this from the BBC in 2021:

https://www.bbc.co.uk/news/business-56602674

REGO stands for Renewable Energy Guarantees of Origin. When an renewable unit of electricity is generated - for example, by a wind turbine - the regulator Ofgem issues a REGO to prove that this energy is green.

The person who owns that wind turbine is now allowed to sell the electricity and the REGO separately.

It means there is a marketplace where leftover REGOs are traded, and there are enough of them "going spare" that energy suppliers are able to purchase enough to cover the proportion of fossil fuels they sell to customers.

Some industry experts are supportive of REGOs and many agree that they have a role to play in expanding and supporting the renewable energy market.

The problem is how much they cost. They are cheap.

An energy supplier can make electricity from the wholesale market, which includes fossil fuels, look entirely green for just £1 or £2 per customer per year. The majority of UK energy suppliers are doing this to some extent.

Thanks for the clear and concise expanation as well as supporting statements, which once again highlights what cynical me has suspected all along - that 'renewable energy supply' is nothing more than more 'greenwashing' in many cases.

Most people, even those who can afford to and would prefer to do the better thing for the environment even if it costs a bit more, don't do so because the system is so corrupt that almost nobody beileves that paying more to 'help the environment' actually helps the environment at all - and instead the extra profit is simply gobbled up by fat cats to make themselves even fatter - which has been proven true in the majority of cases.

markin

All you have to do is look at the customer numbers of the true Green energy companies, They are tiny.
 TBH I thought everyone knew that the REGO's are just an accounting trick, it was in the press from the very start.

barker77

Easy solution to this if want to stay with octopus - swap to their coop branded tariff and get fully purchased power agreement energy https://energy.yourcoop.coop/ so no REGO nonsense and same price as octopus variable … 

QrizB

At least one of the three deep green suppliers buys the electricity *and* the REGO from their suppliers, IIRC.

Qyburn

Irrespective of all this no supplier is actually supplying "greener" energy than any other.

Lets say you use 3,000kWh. If you switch to one if these suppliers making that claim, that doesn't result in 3,000 kWh of additional renewable energy being produced, or reduce fossil fueled production by 3,000.

Qyburn

mrodent33 said:

I've been with Octopus for about 3 years and obviously they call their LX 100% green, and 

Just out of interest is there a trade or sector where "LX" is used to mean electricity? Not one I've seen before.