The government is going to review how energy suppliers market ‘green’ electricity tariffs, amid concerns some could be exaggerating their environmental credentials.
The review, launched today, will explore the extent of ‘greenwashing’ in the retail energy sector, and whether there is sufficient transparency around where energy comes from.
Currently, suppliers can market electricity tariffs as ‘green’ even though some of the energy has come from fossil fuels, which industry figures have warned risks misleading customers.
Energy companies can purchase certificates known as Renewable Energy Guarantees of Origin (REGO), which determine the proportion of electricity acquired from renewable sources.
REGOs can only be used once to demonstrate that electricity is from a particular renewable energy source, however they can be bought and sold separately from the actual unit of electricity that came from the renewable generator.
Experts have warned that the system is open to loopholes that risk “double counting” the UK’s renewable energy supply, or even claiming foreign renewables as its own.
The government aims to explore whether the mechanism around REGO needs to be smarter, and whether suppliers should provide clearer information about green tariffs, including the type of renewable energy used, where and when it was generated.
Anne-Marie Trevelyan, Minister of State for Energy and Clean Growth, said:
“Millions of UK households are choosing to make the green switch and more and more of our energy comes from renewables.
But I want people to know that when they sign up to a green tariff, they are investing in companies that make a conscious choice to invest in renewable energy.
Part of that is ensuring companies are being as transparent as possible on where their power comes from. That way, every family in Britain can rest assured their choices are helping to contribute to our world-leading target of eliminating our contribution to climate change by 2050.”
It’s estimated that around 9 million British households are on green tariffs, with over half of all new electricity tariffs launched badged as ‘100% renewable’ or ‘green’.