Many energy suppliers in the UK retail market are offering 100% renewable tariffs while providing close to zero support for clean power generators, according to a report by Good Energy.
The report – ‘Renewable Energy Tariffs: The Problem of Greenwashing’ – said because of a loophole in the rules some energy suppliers can sell green tariffs and not have to buy any green power for customers.
Green Energy said that instead of buying renewable power, suppliers are able to buy second-hand certificates for as little as £0.1.
“A typical household’s energy consumption for an entire year can be covered for less than £1 by purchasing these certificates and not the power itself,” the company said.
By contrast, it added, buying the power can cost up to 100 times this price.
The report offers two key recommendations to Ofgem, the energy regulator, for reform.
First, update the licensing condition to reinstate the link between power purchase agreements and customers so that no tariff should be marketed as 100% renewable unless the supplier is buying that power from a renewable generator.
Second, enforce an additionality clause by requiring any environmental claim to be audited by either an independent body or Ofgem, outlining what qualifies as additionality, and creating a clear threshold for compliance in a similar way to the exemptions under the price cap for green tariffs.
Good Energy said the report is supported by Jeff Hardy, who previously acted as Ofgem’s head of future consumers and provided expertise on how suppliers should market green tariffs.
Hardy said in the report’s foreword: “As a consumer, I think it is reasonable that if I choose a green electricity tariff, the company should be able to point to the renewable power plants from which it buys its power.
“That way, I know my hard-earned cash is supporting renewable power and incentivising more of the same, and the economic growth and jobs that come with it.
“I think the market for green tariffs should be simple, transparent, and trustworthy; and that is why I’m supporting Good Energy in their campaign on this.”
Good Energy senior policy manager and the report’s lead author Tom Steward said: “Consumers are being sold down the river.
“Most people would expect a supplier claiming to offer green power to actually be buying green power however, often that is not the case at all.
“Many companies are using a loophole in the rules to claim they are supporting renewables when, in fact, all they are doing is luring in customers with misleading claims whilst doing little to fight against climate change.”