In 2022, the Government announced that from April 1st 2023, the UK will no longer recognise EU Guarantees of Origin (GoO) certificates. As a result, it may be a good time for your business to understand the type of renewable energy certificates associated with your supply contract, and consider what potential impacts this change may bring going forward.
What are GoOs?
European GoOs (Guarantees of Origin) are certificates purchased by electricity suppliers as proof that the electricity supplied to their customers has been matched with verified, renewable sources. One GoO is issued for every MWh of renewable electricity generated.
Under current rules, when UK electricity suppliers source electricity from mainland Europe via interconnectors, they are also able to import GoO certificates and use them in the same way as the UK’s Renewable Energy Guarantees of Origin (REGO) certificates. However, following a consultation in 2022, the Government confirmed UK recognition of GoOs will cease on April 1st, 20231. This means UK electricity suppliers will no longer be able to source your renewable electricity certificates from Europe. Specifically, they will no longer be eligible to use within suppliers’ Fuel Mix Disclosures (i.e. the mix of energy sources used to generate your electricity) or for Feed in Tariff (FiT) and Contracts for Difference (CfD) scheme payment reductions2.
The move follows the UK’s withdrawal from the EU and the end of the Brexit transition period on 31st December 2020. At that point, the EU stopped recognising UK REGOs for use in Europe, but the UK continued to recognise GoOs for the uses mentioned above. The UK Government had continued to review this policy but following the 2022 consultation, confirmed its decision to withdraw the use of GoOs in the UK.
What does the removal of GoOs mean for your business?
With demand for renewable electricity continuing to grow, and GoOs soon no longer eligible as proof of renewable supply, it’s expected that demand for REGOs will rise. Suppliers will look to replace around 42TWh of the renewable energy that was imported in 2021/224, which is around 28% of total UK renewables supply, potentially causing a demand shock that could cause prices to rise.
Looking to the future: Protecting our customers’ interests
Bryt Energy is committed to providing British businesses with zero carbon, 100% renewable electricity and it’s something that’s essential to our vision of a net zero future. Therefore, we’ve been prepared for the withdrawal of GoOs and done what we can to support our customers.
Sally Masters, Commercial Director at Bryt Energy, explains: “We have processes and hedging strategies in place to ensure we will match our customers’ supply with UK REGOs from April 2023 onwards. So those businesses that are already in contract with us can be assured that we’ve considered and covered this, and they won’t be adversely affected by price rises associated with increased REGO costs during their contract period.
Having a Norwegian parent company, Statkraft, with their vision to renew the way the world is powered, we at Bryt Energy believe that climate change has no border and, as such, GoOs have traditionally formed part of our fuel mix. Whilst we still believe this, we are prepared for the changes brought about by the consultation, already using a far greater proportion of UK REGOs to continue to support our customers.”
If you have any questions about the above changes, please speak to our friendly team of experts by calling us on 0330 053 8620 or email at email@example.com. We also have a dedicated FAQ section on our Fuel Mix Disclosure page, where we cover our own zero carbon, 100% renewable electricity supply, guarantee of origin certificates, and the broader energy industry.