In today’s rapidly evolving energy sector, businesses are increasingly facing the challenge of balancing sustainability commitments with financial viability. A critical factor influencing this balance in the UK is the cost of Renewable Energy Guarantees of Origin (REGOs).
As a global leader in energy efficiency and carbon emission reduction, EP&T Global is at the forefront of addressing these challenges for the Commercial Real Estate (CRE) sector. We understand the implications of rising REGO costs in CRE and the necessity for businesses to optimise their energy usage, even when it comes from renewable sources.
The REGO scheme, pivotal in the UK's energy market, ensures transparency about the renewable origin of electricity. Each REGO certificate represents one megawatt-hour (MWh) of renewable electricity, allowing businesses to demonstrate their green energy use. However, recent developments, including the cessation of recognition of EU Guarantees of Origin (GoOs) in the UK and Northern Ireland post-Brexit, have sparked significant changes in the REGO market.
The energy landscape is witnessing a dramatic shift globally. Key factors, including geopolitical tensions and market dynamics, have led to substantial increases in REGO prices. Over the UK summer of 2023 in particular prices rose dramatically and hit a record high of £20 in October 2023. With businesses facing double digit percentage hikes in energy costs, some are even considering a switch back to non-renewable sources, jeopardising their Scope 2 emission commitments.
In this context, EP&T Global’s message is clear: Measure, Manage, and Reduce.
With our expertise in energy management and building efficiency, EP&T helps property owners achieve an average energy saving of 21% in commercial real estate, significantly mitigating the impact of rising REGO costs. Our approach involves ensuring that buildings and operations are energy efficient, in parallel with building owners and operators sourcing renewable energy. This dual strategy is critical in today’s scenario, where every kW saved, translates to financial savings and carbon footprint reduction.
Current market conditions also highlight the potential of on-site generation solutions like solar PV and battery storage. These technologies enable businesses to reduce their dependency on energy from the grid, offering a more sustainable and cost-effective alternative.
While the temptation to switch back to brown energy as a cost-saving measure is understandable, it's a short-sighted solution. Moving away from renewable sources will not only increase a business's Scope 2 emissions but also adversely affect their Scope 3 emissions, impacting the entire supply chain. This shift can have significant repercussions for businesses, especially those with commitments to NetZero and those with an environment conscious investor community.
Businesses must stay abreast of the regulatory landscape in energy procurement, anticipating potential reforms in the REGO scheme. These reforms could reshape the way businesses approach renewable energy sourcing, emphasising transparency and direct links to renewable energy project development.
The rising cost of REGOs presents both a challenge and an opportunity for businesses. EP&T Global’s expertise in energy efficiency and our commitment to sustainability, position us ideally to guide businesses through these turbulent times. By focusing on energy efficiency and exploring on-site generation options, businesses can navigate the rising REGO costs while maintaining their commitment to sustainability.
The key is to act now, optimise energy usage, and prepare for a future where renewable energy is not just a choice but a necessity for business viability and environmental stewardship.