Beware green energy tariffs

Signing up for so-called ‘green electricity’ doesn’t guarantee a cut in emissions. So what are the best clean energy options out there?

More electricity users are signing up to green energy tariffs every year, says UK electricity regulator Ofgem. But the truth is that if everyone on the national grid changed to a green tariff tomorrow, we wouldn’t have created any more green energy collectively. This, plus the growing uncertainty surrounding the role of renewables in the future UK energy mix, means it’s time for companies to start questioning the validity of their green tariffs.

In the UK, renewable energy generates Renewables Obligation Certificates (ROCs) that are sold on the market to electricity companies. By law, they have to buy a minimum 7.9% renewables into their energy mix in the year 2007/8. This figure will gradually increase to 15.4% by 2027, according to government targets.

At the moment, there aren’t even enough ROCs to go around the energy companies to satisfy these targets, says Ofgem. Companies could only buy 66% of the total ROCs needed to satisfy the 2006/7 target, down from 76% in 2005/6. The cost of the remaining deficit of green energy is paid into a buy-out fund, which is distributed to ROC providers for future investment.

The number of ROCs had been rising steadily by about three million a year from 2003 to 2006, but last year this faltered, with ROCs rising by under a million (Ofgem partly attributes the fall to tighter guidelines for the qualification of biomass/coal mix energy). Since first introduced in 2002, the ROC system has been criticized by environmental and pro-renewable energy groups and compared unfavourably to schemes in Germany, which provide popular feed-in tariffs to residents with microgeneration facilities.

What’s green?

According to dedicated UK green electricity supplier, Ecotricity: “The only green electricity that does anything to reduce CO2 emissions and our dependence on fossil fuels is the new kind, the stuff that gets built today and tomorrow.” The company argues “if you’re not building you’re not actually achieving anything green at all. It’s just marketing and spin.”

Ecotricity has published a table (featured) revealing the amount of money spent on renewable energy build per customer per year by the big six UK energy suppliers. Ecotricity claims that of the energy it supplies, 28% is renewable (mainly wind) generated themselves, adding that this figure is rising as they erect more turbines.

Ecotricity isn’t the only one with a bee in its bonnet about false green tariff claims. An Ofgem spokesperson told ClimateChangeCorp: “Ofgem is eager to clear up the confusion among consumers over green tariffs.” The regulator has been working on a rating system, which it will propose in July this year, that will make clear which tariffs offer genuine environmental benefits.

Ecotricity spend £555.63 per each new customer, compared to normal energy companies such as Eon, Powergen, Scottish Power etc who average at £4.00 per customer.

Source - ClimatechangeCorp