Renewable certificates are an important feature of the UK energy market. They provide a clear and transparent mechanism to track renewable electricity and green gas supplied through the grid. They are issued at the source of renewable generation and are the contractual instrument required for carbon reporting, as well as supplier fuel mix reporting.
UK renewable certificates include:
- Renewable Obligation Certificates (ROCs)
- Renewable Energy Guarantee of Origin Certificates (REGOs)
- Renewable Gas Guarantee of Origin Certificates (RGGOs)
There is a traded market for these UK renewable certificates, as well as the equivalent European Guarantee of Origin Certificiates (GOs) issued by EU member states. As an established participant in the market, SmartestEnergy Renewables Trading is able to buy, sell or track your renewable certificates and we would be happy to discuss your requirements with you – contact us to discuss pricing.
How do generators benefit?
Whether you are a renewable generator, or a green gas producer, the additional revenue benefits, beyond the commodity price, can support your ability to reinvest and grow your business.
These certificates are normally sold with the power/gas, but extract the maximum value and support sustainably-minded consumers in achieving their carbon reduction ambitions.
How do consumers benefit?
SmartestEnergy’s renewable tariffs are all certified by the Carbon Trust to ensure consumers know the source of their renewable electricity. An increasing number of companies are also opting to purchase green gas.
Renewable certificates provide consumers with a valid means to track their carbon footprint, evidencing their purchase and support renewable generation and green gas – a clear statement and commitment to supporting the transition to a low carbon energy future.
Our flexible service offering
SmartestEnergy has been actively promoting the interests of independent generators since 2001. That experience has told us that simply providing a price for certificates does not provide the required insight for generators to manage their business effectively.
We can offer a range of prices depending on your requirements, whether that be fixed for a period of time, flexible to your risk approach, or floating. Whatever your business needs, we will do our best to help. In addition, we offer a range of payment terms and can help with related financing considerations.
Coupled with our Power Purchase Agreements, which include embedded benefits, we can provide a full service to generators to ensure you get the most from your renewable generation or green gas production site.
Over the years, we have built up a large renewable supply base and have focused on ensuring transparency across our business. It is important to us to build and maintain trust with our customers, and over the years we have built longstanding relationships with generators spanning the length and breadth of the UK.
Renewable Obligation Certificates (ROCs)
ROCs are issued to accredited renewable generators for their renewable electricity and are used by suppliers to demonstrate they have met their obligations under the Renewables Obligation (RO) scheme. Introduced in 2002 the RO scheme requires suppliers to source an increasing amount of their electricity from renewable sources, evidenced through ROCs. Generators receive ROCs based on their renewable technology and trade their ROCs to generate value in addition to the wholesale price of their exported power.
The generators can receive revenue on the ROCs from both the buy-out price and the expected distribution of recycle payments. The buy-out price has been increasing in line with the Retail Price Index (RPI). The recycle payment is defined at year end depending on all suppliers meeting their RO payments. Generators should always consider credit-worthiness when selling their ROCs to ensure they receive the full recycle value at the end of the year.
We can help generators maximise their ROCs in the following ways:
- Provide a fixed price per ROC giving certainty and defined monthly cash-flow
- Provide the payments in two stages; initially passing through the relevant buy-out price, less a fee and then providing the additional recycled supplier buy-out payments, when that is defined by Ofgem
Renewable Energy Guarantee of Origin Certificates (REGOs)
REGO certificates demonstrate that electricity has been produced from a renewable source. Each megawatt hour (MWh) of renewable electricity generated will receive one REGO and it is the only mechanism for demonstrating that electricity consumed is renewable.
These REGO certificates are used by suppliers to meet the fuel mix disclosure condition in their supply licenses. On our renewable tariffs, we also allocate a REGO for each MWh of renewable electricity we supply, providing transparency from generation to supply point.
REGOs are an important market mechanism to enable value to be created by more desirable source of electricity, which are backed up with certification by the Carbon Trust. We believe that a market for REGOs is the best way to allow consumers to use their consumption to influence the UK’s generation mix.
Are you getting value for your REGOs?
In recent years there has been a growth in the importance of REGOs and a market is emerging. Traditionally REGOs have been bundled with the commodity electricity, but SmartestEnergy have been working hard to recognise the value of REGOs in their own right.
Increasingly consumers are placing a value on REGOs too. Supply contracts have changed to meet these needs and there is a corresponding value to the renewable generator for their REGOs. If you aren’t receiving payment for your REGOs you should talk to our Renewables Trading team for more information.
We provide payment for REGOs as part of all of our PPAs, but can also provide services to other generators looking to maximise the value of their renewable generation – contact us to find out what value we can guarantee.
Guarantee of Origin Certificates (GoOs)
As carbon reporting becomes more mainstream, companies that operate across Europe will need to ensure all their reporting entities comply with their renewable ambitions. Whilst the UK has REGOs, the rest of the EU simply refer to Guarantee of Origin Certificates (GoOs). These are the same contractual instruments and refer to electricity generated by a renewable source in the EU.
Any business looking to source GoOs for their EU operations can speak to our Renewables Trading team who can source GoOs directly from the major producers across Europe.
Additionally, where electricity is imported to the UK, GoOs from EU member states can be recognised in the UK, as they have the same attributes as REGOs. SmartestEnergy is one of the most active UK suppliers in Europe handling renewable certificate transactions and energy labelling.
Renewable Gas Guarantee of Origin Certificates (RGGOs)
Technology is unlocking the capability to create gas from renewable sources as an alternative to fossil fuels. Renewable Gas Guarantee of Origin Certificates (RGGOs) are instruments issued to track the renewable gas from source to supply. Renewable gas refers to biomethane (‘green gas’) and each kilowatt hour (kWh) of green gas produced and registered on the system is issued with a unique electronically labelled identifier, which provides information about where, when and how the individual kWh of green gas was produced.
The RGGO ensures that both sellers and purchasers can track their gas through the system and know there is no double-counting. By injecting biomethane into the grid, conventional gas is displaced by equal measure. Displacing fossil fuel derived natural gas helps to lessen greenhouse gas emissions.
By procuring green gas instead of conventional gas, corporates are able to reduce their carbon footprint to meet their sustainability goals. A market for RGGOs helps provide the confidence needed to grow the proportion on green gas in the UK gas network and allow producers to receive additional value for their gas based on consumer demand.
We can offer both fixed and flexible pricing for green gas, inclusive of certificate prices and are poised to help generators receive the maximum value for their green gas outputs.