Juliet Davenport: Consumers and businesses want to do their bit for the planet. Switching energy supplier to one with good green credentials seems like an easy way to do so. They shop around and find one offering ‘100 per cent renewable electricity’, and at a price that’s competitive — great. But is it? Findings from a survey we commissioned with YouGov* show that more than eight in 10 people (84 per cent) consider ‘renewable energy’ to be important to them. However, a majority (58 per cent) don’t have a very good understanding of what ‘renewable energy’ even means. The most common misconception, held by 52 per cent of consumers, is that a renewable energy supplier should provide electricity from wind and solar farms directly to people’s homes. This indicates a widespread lack of understanding of how the National Grid works, and a picture of confusion in a market in which there are a growing number of renewable energy providers failing to be fully transparent with consumers. This confusion wouldn’t necessarily be a problem if consumers and businesses were able to see the words ‘100 per cent renewable’ on a supplier’s tariff and take them fully at their word. Unfortunately, a few suppliers are capitalising on people’s confusion to offer ‘green’ tariffs that do effectively nothing to encourage more renewable generation — something which our research found 48 per cent people believe a ‘renewable’ supplier should be doing. For every unit of renewable electricity generated, Ofgem issue a Renewable Energy Guarantee of Origin (REGO) certificate. However, these certificates can be purchased without the energy they are associated with, essentially independent of their origin, at very low cost. Several suppliers are taking advantage of this loophole in order to offer low cost ‘renewable’ tariffs which do not encourage any additional renewable energy generation to the UK grid. They are simply labelling their electricity ‘green’, without actually purchasing any renewable power. This is leading to a perception that consumers no longer need to pay more for 100 per cent renewable electricity, which unfortunately isn’t the case yet.
Business Green 19th April 2018 read more »