Energy suppliers claim to sell '100% renewable' electricity without producing any green power

Majority of providers purchase certificates to ensure that the power they supply is matched up with zero-carbon sources; but Which? claims some customers are in the dark about what they're buying

Ben Chapman
Friday 27 September 2019 15:45 BST
Consumer group calls for more clarity about what customers on green tariffs are actually buying
Consumer group calls for more clarity about what customers on green tariffs are actually buying (PA)

Energy suppliers that do not generate or directly source green energy risk misleading customers by claiming they are “100 per cent renewable”, according to a report.

Suppliers can be seen as “greenwashing” by purchasing certificates from companies that generate renewable electricity, which allow them to claim they provide zero-carbon energy, even though much of the power they actually supply may comes from fossil fuels, Which? has argued.

Green Star Energy, Ovo Energy, Pure Planet, Robin Hood Energy, So Energy, Tonik Energy and Yorkshire Energy all sell “100 per cent renewable” electricity tariffs but do not generate any renewable energy themselves or buy any directly.

Instead they buy Renewable Energy Guarantee of Origin (REGO) certificates, whose purpose is to prove to the final customer that a given share of energy was produced from renewable sources.

The average household uses a little over 3MWh of electricity per year, meaning suppliers can buy the certificates to match this usage for only around £1.55 per customer and claim a tariff is “100 per cent renewable”.

The consumer group said it is concerned that many suppliers are claiming to be green while doing little to support additional renewable energy supply.

However, some suppliers hit back at the criticism. Steven Day, co-founder of Pure Planet, said that any suggestion it misled customers is untrue and that Which?’s report demonstrates a “fundamental misunderstanding of the way electricity is generated, certified, traded, managed by the grid and supplied”.

He added: “All green suppliers have to use REGOs to verify that the electricity used by their customers is matched by electricity generated from renewable sources.”

Which? analysed more than 300 energy tariffs and found that 40 suppliers sold what they described as 100 per cent renewable options.

It said much greater clarity is needed around how “renewable” energy is defined and marketed to ensure customers aren’t misled.

A survey found a third of people thought purchasing a renewable tariff meant that all of the electricity delivered to their home would come from renewable sources.

But it is not possible to achieve this because power from all sources is linked up to the national grid before being directed to individual homes.

Some companies buy the certificates to match up the energy they supply with green energy generated. Others go a step further and generate renewable electricity themselves or buy it from those that do, rather than relying on REGO certificates.

Both Ecotricity and Good Energy source enough renewable electricity to match their customers’ usage, but this tends to mean their costs are higher and therefore their tariffs are more expensive.

Recognising that these firms directly support renewable energy, regulator Ofgem exempted both companies from its price cap on standard variable tariffs.

Richard Headland at Which? said: “As consumers grow ever-more environmentally-conscious, it’s concerning that some suppliers appear to be ‘greenwashing’ their energy tariffs, which could risk misleading customers.

“We believe there needs to be greater clarity on how renewable electricity is defined and marketed. People can only make informed decisions about where to buy their energy from if firms are more upfront and transparent about their green credentials.”

Green Star Energy and Foxglove Energy both said they source all electricity from renewable generators, but Which? said the firms do not own renewable generation or have contracts with renewable generators and buy REGO certificates to match customers' use.

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