What a REGO Really Proves: A UK Business Guide to Credible Renewable Electricity Claims

Businesses are under pressure to say something credible about electricity. The problem is that the UK market offers several different things that all sound green: a tariff labelled 100 per cent renewable, a supplier fuel-mix disclosure, a REGO-backed contract, or a power purchase agreement linked to a new generator. They are not interchangeable. For an SME buying electricity, the task is to separate the certificate from the claim, and the claim from the outcome.

Three things a green tariff can mean

A REGO, or Renewable Energy Guarantees of Origin, is a certificate issued in respect of renewable generation. In the UK, one REGO is issued per megawatt-hour of eligible renewable electricity. The certificate can be traded separately from the physical electricity. That separation is the source of both the market's usefulness and most of its confusion.

At its weakest, a green tariff means the supplier has purchased and retired REGOs equal to some or all of the customer's consumption. That is a market-based claim. It demonstrates that renewable generation was produced and attributed, but it does not mean the electrons entering the building came from a wind farm, and it does not necessarily mean the contract caused new renewable capacity to be built.

At its strongest, a green tariff is backed by a direct supply arrangement with a generator, with certificates retired on the customer's behalf and clear evidence of the source, vintage and technology. That is a stronger procurement story, but it still needs to be described accurately. Between those two positions sits most of the market.

Where common claims become shaky

A supplier fuel-mix label describes the supplier's overall electricity portfolio, not the specific tariff sold to one business. It is useful context, but it is not proof that a particular contract is supplied by a particular wind farm. A claim that a company 'uses 100 per cent renewable electricity' may be true on a market-based accounting basis and false if read as a statement about physical supply. Both readings appear in sustainability reports, sometimes in the same paragraph.

The phrase 'zero carbon electricity' is also fragile. Renewable generation has lifecycle emissions, and the electricity system as a whole still contains fossil generation. A market-based certificate can support a lower reported Scope 2 figure under the GHG Protocol, but it does not make the grid zero carbon at the time of use. A credible report will show both market-based and location-based Scope 2 figures, and explain the difference.

Additionality is the claim most likely to fail under questioning. If a business says its tariff 'funds new renewable generation', it should be able to point to a contract structure that would not have happened otherwise. A standard REGO purchase rarely meets that test. A long-term corporate PPA, a sleeved supply deal with a new generator, or on-site solar may meet it more convincingly. The wording should match the evidence.

What to ask before signing

Start with the tariff-specific fuel mix. Ask for the source, technology and vintage of the REGOs or other certificates retired on the company's behalf. Request cancellation evidence, not just a marketing statement. Confirm whether the supplier retires certificates for the customer's volume, or whether the customer is buying a product that is matched at portfolio level.

Ask whether the renewable attribute has been sold onward to another party. Ask how the premium is calculated and what it pays for. Ask whether the contract includes audit rights, what happens if the supplier changes the fuel mix, and whether the green claim survives a change of supplier. If the answer is vague, the claim will be vague too.

The blunt procurement view is this: do not pay a large premium for a certificate that supports a modest market-based statement. Pay for evidence, contract structure and clarity. If the business wants additionality, it should consider a PPA or on-site generation rather than assuming that a standard green tariff delivers it.

Writing a defensible statement

A defensible statement is specific and modest. For example: 'For the reporting year, we purchased REGO-backed renewable electricity for X MWh under tariff Y. Our market-based Scope 2 emissions were Z tonnes of CO2 equivalent; our location-based figure was A tonnes.' That wording is less exciting than 'powered by 100 per cent green energy', but it is far more likely to survive scrutiny from a customer, auditor or investor.

Use 'matched' or 'certificate-backed' where that is what happened. Reserve 'additional' for contracts that can demonstrate new generation. Keep the evidence file with the contract, the certificate cancellation records and the supplier's fuel-mix disclosure. If the business reports under SECR or sets targets through the Science Based Targets initiative, align the wording with the accounting method used. Consistency matters more than superlatives.

The procurement decision

For most SMEs, the sensible approach is to treat electricity supply and renewable claims as related but separate decisions. Compare the unit rate, standing charge and green premium. Then compare the evidence behind the green premium. A tariff that is slightly more expensive but comes with clear certificate cancellation and a precise claim may be better value than a cheaper product that leaves the sustainability team unable to substantiate its own report.

On-site solar remains the most direct way to connect a business's electricity use to renewable generation it can see. It is not a substitute for a green tariff in every case, but it changes the quality of the claim. A procurement strategy that combines a well-evidenced tariff with on-site generation and a plain-English reporting note is likely to be more credible than a glossy '100 per cent renewable' badge with nothing behind it.