Renewable Energy for Business: A Quick Guide to REGOs, PPAs and Deeper Green
The closer the UK moves towards its net zero by 2050 goal, the larger our renewable energy sector grows. While this is a positive change, there’s a lot to get your head around when it comes to renewable energy for business, especially when you’re confronted with terms like REGO, Deeper Green, PPA and RGGO.
To better understand your renewable energy options and get a clear insight into what’ll work best for you and your business, Kendra’s energy experts are on hand.
But before arranging your no-obligation chat, let’s quickly cover the basics. Below is a summary of each renewable energy option and what you can expect.
Renewable electricity for business (REGO)
When you choose a renewable electricity contract, you’re bound to come across the term REGO. It stands for Renewable Energy Guarantees of Origin. REGOs are certificates issued by Ofgem for every unit of renewable electricity generated. Suppliers use them to show that the electricity you buy is matched by renewable generation from:
- Solar power
- Wind power
- Hydroelectric power (energy generated from flowing water)
- Biomass
… but is biomass a sustainable option?
Technically, biomass counts as a renewable energy source because the carbon it produces is considered part of the natural carbon cycle. However, to generate electricity, biomass power stations burn organic materials, such as wood pellets and this creates emissions.
Therefore, if you’re looking for a truly sustainable REGO contract, you’ll need to check whether it excludes biomass. Many UK businesses now only opt for electricity generated from wind, solar or hydroelectric power.
What are ‘Deeper Green’ renewable energy products?
If you want to go beyond a standard renewable electricity contract, Deeper Green products offer greater visibility and control over where your electricity comes from.
Rather than simply match your electricity use with renewable generation, Deeper Green products allow you to specify a particular source of renewable energy. For example, if you’d prefer electricity generated by hydroelectric power, or even a specific wind farm, this can be built into your energy agreement.
Choosing Deeper Green products will strengthen your sustainability credentials, boost transparency and demonstrate a greater commitment to supporting renewable energy generation.
Power Purchase Agreements (PPAs) for business
A Power Purchase Agreement (PPA) is a direct contract between your business and a renewable energy generator.
It means you know exactly where your electricity is coming from and can support a specific renewable energy project. PPAs are typically long-term agreements and are popular with larger organisations looking for price certainty and a direct connection to renewable generation.
A ‘sleeved’ PPA works in a similar way, but an energy supplier sits in the middle, delivering the electricity through the grid and managing billing and balancing. This makes it simpler to manage while still providing full visibility of the renewable energy source.
How much does renewable electricity for business cost?
Once upon a time, choosing 100% REGO-backed electricity came with a hefty price premium. Today, that’s rarely the case.
In some cases, you can switch from standard to renewable electricity at no extra cost. If there is a cost involved, it’s generally only small, ranging from around 0.05p–0.15p more per kWh.
With little or no cost barrier, renewable energy for business is now achievable for many organisations.
What about nuclear energy?
Nuclear power provides reliable, zero-carbon electricity for the UK because it doesn’t burn fossil fuels. However, it’s not renewable and therefore doesn’t qualify for REGO certification.
Choosing REGO-backed contracts supports the growth of the renewable sector, encouraging others to use renewable electricity generated from naturally replenishing sources. It’s an important step for any organisation with sustainability or net zero ambitions.
How about renewable gas for business?
Renewable gas is backed by RGGOs (Renewable Gas Guarantees of Origin). Most of it is biomethane, produced through anaerobic digestion: a natural process that releases gas by breaking down organic materials, such as farm waste, food waste and grass cuttings.
How much does renewable gas cost?
Unlike renewable electricity, renewable gas is in limited supply. As a result, it costs at least 1.6p per kWh more than standard gas, bringing contract costs up.
Because renewable gas is more expensive and isn’t as widely available, some organisations reduce or remove their reliance on gas altogether. Instead, they switch to electric alternatives, powered by 100% REGO-backed renewable electricity wherever possible.
Renewable energy for business: which option is right for you?
It depends on your priorities. There are renewable energy options to suit every budget and goal, from cutting your carbon emissions to working towards net zero.
Before you decide, it’s worth thinking about:
- Your sustainability goals: are you aiming to cut emissions, hit a net zero target, or meet the expectations of customers, investors or tender requirements?
- How you report your carbon: the type of contract you choose can affect how emissions from your electricity use are recorded.
- How much transparency you need: is a standard REGO-backed contract enough, or would you benefit from naming your source through a Deeper Green product or a PPA?
- Your view on biomass: if you’d rather avoid it, make sure your contract excludes it.
- Your budget and appetite for risk: including whether a fixed price, a flexible contract or a longer-term PPA best suits your plans.
- Your gas use: is renewable gas worth the premium, or would switching some equipment to electric make more sense?
- Timing: which options are open to you and when can vary depending on when your current contracts end.
Getting your renewable energy for business decisions right can make a real difference to your costs, your carbon footprint and how your business is seen by customers and partners. But with so many options, and a market that’s always changing, it isn’t always easy to know where to start.
That’s where we come in
Our energy specialists will review your current contracts and energy use, establish end goals and explain all renewable energy for business options in clear and simple terms. That way, you can make informed decisions that work for your business today, while putting you firmly on track to meet your future objectives.
To arrange a no-obligation conversation, email enquiries@kendraenergy.co.uk and ask to speak with our energy specialists.
