Green energy deals 'mislead customers'

Britain's biggest energy companies have been investigated by the regulator Ofgem over the way they operate "green" schemes that offer the public the chance to be supplied with wind, wave and solar power.

Ofgem has told The Independent it is concerned that customers may be being misled about the actual impact of the so-called "green tariffs" on the generation of renewable energy. Instead of offering additional clean power, the companies have merely been selling green customers the renewables they are forced to buy by law anyway, often at a premium.

Customers have been able to switch electricity supply since privatisation without changing pipes or meter and green tariffs should offer people cleaner forms of power generation.

The schemes operated by the companies imply that they will do this. Npower's Juice scheme says: "As a customer, npower matches every unit of normal electricity that you use and feeds the same amount, generated from renewable sources, into the electricity network."

EDF's website promises: "EDF pledges to match the electricity you use with the equivalent amount of electricity from renewable sources; wind, landfill gas and small-scale hydro."

The big energy companies do buy renewable power, but environmental groups, the industry watchdog and the regulator say they are not increasing their the amount they buy as a result of their green tariffs.

In fact they are only "repackaging" the renewable energy supply under the Government's Renewable Obligations Order introduced in 2002.

Even then they fail to meet these legal quotas, the campaigners complain. The result is that tens of thousands of customers are charged more for green tariffs, yet no extra green energy is produced as a result .

A spokesman for Ofgem said: "Suppliers really must demonstrate that if they are marketing these tariffs they are doing something in addition to the Renewables Obligation." The regulator said it was revising its guidelines on how companies market the products.

At present only 4.2 per cent of electricity is generated by renewable sources despite the UK's advantageous location for solar, wind and wave power - which the Renewable Energy Association claims is the best in Europe. Only 1 per cent of households are currently on green tariffs. They are barely advertised by the power companies and have to be sought out on their websites. If the public were to opt for green tariffs en masse - and exceed the percentage for the Renewables Obligation (currently 6.7 per cent) - suppliers would be forced to buy extra renewable power to meet their promise to supply them with clean power.

In a report, Virginia Graham, of the National Consumer Council (NCC), said: "Many green tariffs are not delivering the environmental benefits they claim to. As a result consumers may not be making the positive contribution they think they are. Many suppliers are doing little more than meeting legal requirements."

Of 12 green tariffs analysed by the NCC, it deemed 10 to be disappointing. British Gas, for instance, has the largest green scheme with 80,000 customers but the NCC concluded it was merely meeting the law.

The only schemes to get "three ticks" were Good Energy and Scottish & Southern's RSPB Energy.

Nick Rau, energy campaigner at Friends of the Earth, said: "Most suppliers have simply established green tariffs and then proportioned in some arbitrary way renewables to their green consumers.Their purchases ought to result in an additional pull on renewables, but that's not happening. We have been calling for an independent auditing of these schemes."

The Energy Retail Association said it was "early days" for green tariffs. "I know that some suppliers charge a premium but others have equalised the price," said a spokeswoman.

The Verdict

* BRITISH GAS: No additional environmental benefits

* ECOTRICITY: Does more than most

* EDF ENERGY: Good practice but supply only meets legal minimum

* GOOD ENERGY: The best for "pure and simple" green energy

* NPOWER: Supply goes no further than legal obligations

* POWERGEN: Fund will help but only meetng law on supply

* SCOTTISH & SOUTHERN: No additional environmental benefits

* SCOTTISH POWER: Not going beyond legal obligations but green trust a serious effort

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