Why Good Energy is exempt from the price cap

Posted in: Energy

Posted on: 03.01.2019

The energy industry regulator Ofgem has confirmed that Good Energy is currently exempt from the price cap. What does that mean and why does it matter?

At the government’s request, Ofgem has implemented a price cap for energy. The cap is designed to protect customers, particularly those who are on more expensive standard variable tariffs.

It is aimed primarily at the customers of the larger energy suppliers who have often never switched, or who sign up on a fixed tariff, then at the end of that deal see their prices skyrocket. At Good Energy, we do things differently — the vast majority of our customers are on the same variable tariff.

In the process of developing its implementation, the government and Ofgem consulted with the energy industry on the impact the cap might have on renewable suppliers.

That consultation concluded that green suppliers like Good Energy are different. We go above and beyond buying and selling renewable energy, creating a market for the renewable generators, and our customers actively choose to buy energy from us.

As such, Ofgem laid out a route to apply for exemption (or a ‘derogation’) from the price cap for renewable suppliers. We applied for and have been granted a temporary derogation from the cap, as confirmed by Ofgem on its website here.

Juliet Davenport, CEO and Founder of Good Energy explains; “If Britain is to kick its fossil fuel habit, long-term investment in renewable energy is required; Ofgem has recognised that Good Energy is distinct from most other suppliers in providing that investment.

“Derogation means we can continue paying generators a good price, establishing a clean energy marketplace. It also means our commitment to research and development, particularly home energy generation, is strengthened.”

This decision is time limited to the end of March 2019 when Ofgem reviews the cap once again. At that point we will need to submit further evidence to achieve permanent derogation.

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