The need for renewable energy
The global energy system is changing. A planet destined for more people and rising living standards will need more energy, and this energy needs to be cleaner.
Ipsos Mori research reveals that nearly 60% of British consumers would like their home to be powered by electricity generated from renewable sources. There are a number of ways that households can achieve this.
Consumers can generate their own electricity, for example by installing solar panels. They can also get a direct connection from a renewable power source straight to their home, as seen with microgrids which produce power to serve a local community. For most people however, neither option is currently physically or financially viable.
The Renewable Energy Guarantees of Origin (REGO) scheme administered by the energy regulator, Ofgem, makes it possible for anyone to have access to renewable electricity without generating their own or living close enough to a microgrid.
How does the REGO scheme work? First we need to understand how electricity gets to your home.
How does electricity get to my house?
All electricity – generated from renewable and non-renewable sources – is fed into the National Grid and carried to your home by a Distribution Network Operator (DNO). Once electricity enters the grid, there is no way of separating the electrons according to the source of their generation. As a result, the electricity delivered to your home by DNOs is a blend of electricity generated from all the different sources available – wind, solar, gas, nuclear, coal, etc.
How do REGOs work?
This is where the Renewable Energy Guarantees of Origin (REGO) scheme comes in. They provide complete transparency to consumers about the proportion of electricity in the National Grid that is supplied by renewable sources.
Everytime one megawatt hour (MWh) of renewable electricity is produced, a REGO certificate is issued by Ofgem to the generator of that electricity.
Household suppliers like Shell Energy can buy these REGO certificates from renewable generators. The number of REGO certificates that are available match the exact amount of renewable electricity that is produced and is put into the National Grid.
How do REGOs benefit renewable generators?
The purchasing of REGO certificates provides renewable generators with revenue which can be used to further invest in their businesses, which in turn encourages more investment in and production of renewable electricity.
As more customers demand renewable electricity, it means more REGOs need to be bought, making it more attractive for new renewable generators to build wind farms or solar plants in the UK.
How do REGOs benefit consumers?
REGOs provide a viable and affordable option for consumers to opt for renewable electricity, particularly for those consumers who are not able to generate their own or connect directly to a renewable electricity producer.
REGOs also provide consumers with a valid means to track their carbon footprint and enable them to play a role in supporting the transition to a low carbon energy future.
The future of REGOs
With nearly 60% of consumers wanting to power their homes with renewable electricity, it is likely that the demand for renewable electricity will increase. As there are a limited amount of REGOs available – because they are based on the amount of electricity generated from renewable sources – the growing demand for renewable electricity will in turn drive the production of more REGOs.
What else is Shell Energy Retail doing to support a lower carbon future?
As well as supplying our customers with renewable electricity through REGO certificates, we’re also contributing to nature-based solutions to reduce carbon intensity globally. On behalf of every customer, we make an annual contribution to UN-approved conservation and reforestation schemes that protect rainforest and woodland across the globe.
We also offer our customers affordable access to smart home technology that empowers them to reduce their energy use.
See here for more information about Shell and the energy transition.