Good Energy is exempt from the price cap because we do much more to support growth in renewables and clean technologies than others. And because our customers have actively chosen our tariffs to contribute to that support.

A row of wind turbines on rolling hills in late afternoon sun.

Is your energy truly green? If you care about the answer to that question, it is because you want to support the fight against the climate crisis.

It is why our first few customers chose Good Energy when it was founded 20 years ago, as the UK’s first supplier to only offer 100% renewable electricity, in a system that was only 2% renewable and when choice was limited. It is also why many of those customers chose to invest in Good Energy in our first crowdfunding round in 2002.

But more recently, we have seen an explosion in energy companies claiming to have a similar offering. These companies are taking shortcuts to offer low cost ‘green’ tariffs which mislead customers into thinking they are choosing to support the growth of renewables, when really they are just paying for fossil fuel power and some cheap certificates.

In August 2019, the energy regulator Ofgem acknowledged that the way Good Energy does business is materially different. When the energy price cap was introduced at the start of 2019 year, we were given a temporary exemption, while the regulator further examined the market and the ways that our tariffs support renewable generation.

In its guidance, Ofgem was clear that green exemption from the price cap would only be possible for tariffs that do more to support renewable generation than what is obligated. This guidance made clear that on their own, REGOs do not provide a meaningful amount of support for renewable generation, as the costs are ‘immaterial’, which is precisely our argument against this ‘green’ loophole.

When you choose a renewable tariff, you are choosing more than ‘net zero’ or some cheap certificates. You are choosing regeneration — support for the growth of clean energy. After careful review, Ofgem confirmed that Good Energy’s model does exactly this. In its letter, the regulator praised — 

  • Our Power Purchase Agreements (PPAs) with renewable generators: We source power direct from renewable generators to match all of our customers’ use. Ofgem said ‘granting support via a PPA is a main route to market for renewable generators’.
  • Our Gas Purchase Agreement (GPA) in place with renewable generators: We source biogas in a very similar way, which provides a route to market for green gas.
  • Our help and advice for potential and existing renewable generators: Not all renewable generators are big, professionally run wind or solar farms. Many are community schemes or smaller generators run part-time by individuals or businesses. Not only do we provide support through PPAs to these generators, we provide help and advice.
  • Forecasting customer demand and renewable output: Our forecasting team work incredibly hard to match renewable output to customer use as closely as possible down to every half hour, not just retrospectively across a year. The better we are at doing this, the more certain we are of when generators are going to be supplying power, and that certainty means we can pay renewable generators more.
  • Financial support for a carbon offset scheme that produces biogas: Carbon offset schemes can only be part of a short-term solution to the climate crisis. But where they actively support growth of clean energy, they are valuable. Ofgem acknowledged that our gas carbon offset schemes do that.

This regenerative model, and the choice our customers have made to support it, is why Good Energy is permanently exempt from the price cap. Proof that our model supports the purpose we have always said it does — powering the choice of a cleaner, greener future together.

As Greta Thunberg says, “yes we need system change, not just individual change. But you cannot have one without the other.” That is why individuals must be given the choice to help tackle the climate crisis, and why this news is so important.