Government moves to end confusion over ‘green’ energy
Relegating detailed descriptions of a tariff's environmental benefits to the small print will no longer be enough for 'green' energy suppliers.
As any household or company which has tried to make the switch to a clean energy supply will know, the myriad environmentally-friendly tariffs come in wildly differing shades of green.
While some promise to source electricity from purely renewable sources, others might invest in the development of clean tech while others source energy from ‘brown’ sources such as landfill gas.
Recognising this consumer minefield, Government has written to energy watchdog Ofgem asking it to provide detailed guidelines to energy suppliers with a view to establishing a rating system ranking the different environmental benefits of any given tariff.
It has also written to the chief executives of energy suppliers asking them to spell out the environmental benefits of their tariffs in the clearest possible language to enable customers to make an informed choice.
Environment Secretary Hilary Benn said: “I want to make sure that the green tariff market, which has grown rapidly over recent years, is clear for consumers and businesses about the precise benefit their tariff brings.
“Many energy suppliers offer green tariffs to businesses and domestic customers who want to make a contribution to environmental projects or help tackle climate change, but these differ in what they deliver.
“This market is changing rapidly, partly because we have committed to the largest expansion of renewable electricity in our history. We will shortly be consulting on a range of measures that will encourage energy suppliers to increase their investment in renewable energy.
“I want to be sure that people and businesses who buy green tariffs have clear information about what environmental benefits they are getting linked to renewable electricity and whether this is in addition to that which energy suppliers must provide anyway. As with any product in the marketplace, we need to know what we are paying for, particularly as in some cases, choosing the tariff may cost more.”
Ofgem chief executive, Alistair Buchanan, said: “Ofgem is eager to clear up the confusion among consumers over green tariffs. We have worked for some time on revising our guidelines on how suppliers should market their green tariffs and last November we proposed an accreditation system that will make clear which tariffs offer real environmental benefits.
“We have since worked on a revision of the proposal based on consultation with stakeholders on the complex issues surrounding green tariffs and we intend to publish a revised accreditation scheme proposal in July, consistent with Defra’s position on carbon reporting.”
The expansion of the green tariffs market reflects the fact that more and more people want their energy use to have benefits for the environment. This growth in green tariffs has sent a clear signal to energy suppliers that people want them to do more on the environment, and promote renewables.
It has also supported the Government in mandating energy companies to produce an ever greater share of renewable energy.
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