AlexMcGowan
Member
- Location
- Cheshire
One of the most common queries I receive, is why REGO's aren't currently priced to reflect their true value within export PPA agreements, however with recent changes within the industry hopefully that is soon coming to an end.
We've seen an increase over the last 12 months of third-parties attempting to purchase just the REGOs from generators, allowing them to effectively classify the brown energy they've bought from the grid as green energy, and offering inflated REGO prices in order to do this. Unfortunately, this then leaves the generator with what can only be classified as brown energy that they now have to sell via PPA. This has many affects on the PPA tendering process, the 2 most drastic being that all energy suppliers who only trade in green energy on their supply side automatically withdraw themselves from the tender, this includes Good Energy, OVO Energy, Drax Renewables, F&S Energy and many more. Secondly, once a buyer has been found, there is the realisation that brown energy is valued less than green energy, and therefore reduced unit rate offers are received.
In order to combat this, whilst also giving generators more of an incentive to transfer their REGOs across, Good Energy have re-assessed their REGO pricing to bring them more in line with their current value, and we as a company are hoping others will follow suit. Good Energy are now offering £8.50/REGO for all Solar, Wind and Hydro customers and £7.50/REGO for all AD customers.
It is likely that this recalibration has seen them readjust their power prices by the same amount in the opposite direction, so that the overall deal remains the same, however it is good to see the importance of REGOs being acknowledged, and the scales tip in their favour.
We've seen an increase over the last 12 months of third-parties attempting to purchase just the REGOs from generators, allowing them to effectively classify the brown energy they've bought from the grid as green energy, and offering inflated REGO prices in order to do this. Unfortunately, this then leaves the generator with what can only be classified as brown energy that they now have to sell via PPA. This has many affects on the PPA tendering process, the 2 most drastic being that all energy suppliers who only trade in green energy on their supply side automatically withdraw themselves from the tender, this includes Good Energy, OVO Energy, Drax Renewables, F&S Energy and many more. Secondly, once a buyer has been found, there is the realisation that brown energy is valued less than green energy, and therefore reduced unit rate offers are received.
In order to combat this, whilst also giving generators more of an incentive to transfer their REGOs across, Good Energy have re-assessed their REGO pricing to bring them more in line with their current value, and we as a company are hoping others will follow suit. Good Energy are now offering £8.50/REGO for all Solar, Wind and Hydro customers and £7.50/REGO for all AD customers.
It is likely that this recalibration has seen them readjust their power prices by the same amount in the opposite direction, so that the overall deal remains the same, however it is good to see the importance of REGOs being acknowledged, and the scales tip in their favour.