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"Green electricity"


The regulation of electricity generated from renewable sources in the UK is enormously complex.

This means that switching to a "green tariff" will often not lead to any reduction in the UK's total emissions - the emissions from the customer who is switching are just notionally reassigned to other customers.

The calculator incorporates a reduction of 25% in CO2 emissions from the best "green" electricity tariffs.



The calculator incorporates a reduction of 25% in CO2 emissions from the best "green" electricity tariffs.

The reduction of only 25% for "green" tariffs puzzles many people who read the claims of electricity companies that they are supplying 100% renewable electricity, and we have had much correspondence on the subject.

The key point is that, whatever the tariff they are on, when people switch on an appliance (for example an electric heater) the consequence is that somewhere a fossil fuel power station burns a bit more fossil fuel to provide that extra electricity, and so releases extra CO2 to the atmosphere. There is no unused capacity in renewable energy facilities just waiting until someone chooses a "green" tariff, and switches on an appliance. The situation is thus fundamentally different to, for example, Fair Trade bananas, where there are two separate stocks of bananas, and separate supply lines, and individual purchasing decisions can lead directly back to more Fair Trade bananas being grown.

The problem is that, in the UK, the regulation of electricity generated from renewable sources is enormously complex - every electricity supplier is required to either buy some electricity from renewable sources, or to buy certificates from other suppliers who have bought from renewable sources, or to pay a fee. This system is designed to encourage investment in renewable sources, but it results in the trading of certificates that is almost impossible for the ordinary consumer to understand, since some suppliers are selling the "greenness" of electricity twice or even three times to different customers.

Accreditation scheme

The National Consumer Council wrote a guide [1], and concluded that many suppliers offering green tariffs were doing little more than meeting legal requirements, and were not delivering the environmental benefits that they claimed. The guide said that even the best tariffs reduced CO2 emissions by only a fraction.

In response to the criticisms, Ofgem set up an accreditation scheme. The scheme website said that using a certified tariff "helps to reduce the environmental impact associated with your home or business energy use"; creates "additional environmental benefits that wouldn't have happened without your support"; and supports investment in renewable energy in the UK.

The FAQ section of the scheme website dealt with the question: "Is it possible to get '100% Green Electricity' through the Scheme?" The answer given was
Your supplier may have contracted with renewable generators to buy volumes of electricity that match your use. However, the electricity coming out of your socket is the same, and is not altered by moving to a green tariff. Similarly, the carbon emissions that physically result from your electricity use will not be reduced by switching tariffs - they will just be notionally reassigned to other customers. Ofgem therefore thinks that claims stating a customer will consume 100% renewable electricity, through a green tariff, are misleading.
(website viewed 12.12.13)

Recommendations

The calculator therefore assumes the reduction in CO2 emissions from the best "green" tariffs to be just 25% - partly from a reduction in CO2 emissions, and partly from the influence on Government policy arising from the demonstration to the Government that some consumers are willing to pay a premium to reduce their CO2 emissions. The best tariffs are defined according to those ranking highly in the table produced by Ethical Consumer magazine (July/August 2013) (www.ethicalconsumer.org) i.e.

It does not seem possible currently to pay for a tariff giving electricity which is "CO2-free", and while an allowance can be made for switching to a "green" tariff, people should still aim to reduce their electricity use if they want to reduce their carbon footprints.

An option for those who are able to is to install their own solar panels [2]. Any electricity exported to the grid can be deducted from electricity taken from the grid for the calculation of the carbon footprint.


References

[1]National Consumer Council (2007) Reality or rhetoric? Green tariffs for domestic consumers https://www.carbonindependent.org/files/NCC144rr_reality_or_rhetoric.pdf
[2]https://energysavingtrust.org.uk/advice/solar-panels/




First published: 2013
Last updated: 11 Sep 2023