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REGO Index update – May 2022

May 30 2022

The prices of REGOs in forward markets continued to rise in the first quarter of 2022. Here is the latest update on Renewable Exchange REGO Index and trends observed in PPA tenders completed through the Renewable Exchange platform.

  • Record REGO prices were offered on near-term PPAs and on contracts renewing in 2023 and beyond
  • Since December 21, average REGO price (for REGOs attached to PPAs) has increased by 60%.

See the latest REGO Index updates on our blog.

Market trends

CP20 REGO certificate prices

With increased wind generation in the last quarter, there were more REGOs available on the market which impacted the prices for existing REGOs. There has also been a drop off in the amount of suppliers that are having to honour green tariffs, as huge volumes of domestic customers in the UK have moved onto the standard variable tariff (for the protection of the price cap), which is not a specific green tariff. Some suppliers have still honoured any previous tariff, but others are using it as a chance to reduce their costs at a much needed time. As a result there’s generally less demand for REGOs in the market, and this combination of increased supply and lowered demand has softened REGO prices for the current compliance period CP20 (Apr 21 – Mar 22).

Future contracts REGOs

We’re still observing strong REGO prices for future periods, something that is reflected in both the wholesale market and as a part of PPAs that are tendered through the Renewable Exchange platform. This may be related to Ofgem’s decision on removal of GoOs from the GB market and the rising interest of corporates and larger industries to show the green element of their power imports.

Ofgem has recently indicated the date for the removal of EU GoOs (EU Guarantees of Origin) from the GB market. GoOs are the continental equivalent of REGOs (for power produced in the EU). GoOs can be imported into the UK and used as an exemption to reduce a supplier’s contribution towards the cost of administering the FiT scheme.

Ofgem has now indicated that GoOs may no longer be recognised in the UK from 1st April 2023. Offtakers have been expecting the decision and are prepared for the change so the impact of the statement has not been drastic. However, the longer-term trends in increasing REGO prices show the market has been anticipating this change for a while.

While the growing renewable capacity in the UK and the associated REGOs will counter some of the shortage created by GoOs removed from the market, the demand for REGOs is likely to increase greatly over the coming years. At the same time, as additionality becomes more and more important to buyers, REGOs attached to PPAs are often deemed better as they can be traced back to a specific renewable energy project which was supported.

REGO Index update

The Renewable Exchange’s REGO Index provides statistical evidence of REGO values. All prices were offered to generators tendering power purchase agreements (PPAs) on the Renewable Exchange platform. Bids were submitted from traders and licensed suppliers in the UK.

REGO prices continued to rise in the first 4 months of the year. The maximum price of REGOs has increased to £8.50/REGO offered on contracts starting month ahead. However, record REGO prices were also offered on PPAs with start dates in April 2023.

The data analysed here consists of the REGO component attached to PPA bids on the Renewable Exchange platform for all technology types and contract lengths. The complete PPA offers would have been inclusive of commercial value for power, ROCs where applicable and embedded benefits.

The analysis doesn’t include values obtained in REGO-only tenders.

Optimising REGO sales

REGOs can be sold attached to a PPA or separately. The latter is becoming an increasingly popular option for generators, especially where large volumes of export power are traded.
A year ago, the REGO element of the contract would have only contributed a small revenue compared to the value of export power. Today, monetising on the REGO offtake can give you a significant revenue boost.

At Renewable Exchange we can help you understand the best option for your REGO offtake: whether it’s selling them off as part of the PPA or separately, in fixed volume chunks or in a long-term structured offtake.

Reach out to our team to discuss your REGO strategy.

Renewable Exchange discloses the REGO Index analysis to encourage transparency in the energy market and provide fair access to information for all participants.

For accurate, site-specific PPA price estimation, inclusive of subsidies, green certificates and embedded benefits, log in to the Renewable Exchange platform.

Renewable Exchange also shares REGO data with market intelligence and analysis consultancy Cornwall Insight for an independent review. Request Cornwall Insight’s Green Certificates Survey Report.

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