Five questions brokers should ask about a green energy tariff

Use these to help identify which “green” tariffs are truly in line with an ambitious climate target.

Being an energy broker has always required a complex mix of skills, and in 2021 there are more challenges than ever. As well as being an expert on contract negotiation and the legislative landscape, you also have to take into account the changing priorities of the business world. Many companies are setting themselves targets to significantly reduce their carbon emissions, or even reach net zero emissions, over the next decade or so. This means that you have to guide them through the greenwash to the tariffs which will actually help them achieve their goal – while still finding the best price and contract type.

These five questions to ask energy suppliers will help you identify which “green” tariffs are truly in line with an ambitious climate target.

1. “How much of your electricity is actually from renewable sources?”

 It’s perfectly legal for an energy supplier to buy electricity on the open market from any source whatsoever, then buy green certificates from other suppliers or brokers in order to call their electricity “green”. The secondary market in Renewable Energy Guarantees Origin (REGO) certificates means that suppliers or brokers with a surplus of REGOs can sell them to suppliers who haven’t so much as spoken to a renewable generator, allowing the latter to market their energy as “renewable” even when it’s from dirty sources such as coal or gas

This means that you can’t accept a “green” or “100% renewable” tariff at face value; you have to ask about their sourcing. Suppliers don’t have to disclose the source of their renewable energy in their fuel mix data either, so it could all be from REGOs. 

Good Energy is very upfront about our sourcing: we match every unit of electricity used by customers with a unit sourced from renewable generators via direct power purchase agreements.

2. “How much are you investing in new green generation?”

When you’ve eliminated all the suppliers which use REGOs to achieve their “green” tariffs, you’re left with those who actually invest in sources of renewable power. It’s worth asking how much they’re currently investing. How many generators are they currently supporting? How many generators do they own and run themselves? But remember to take the overall scale of the business into account; without this context, metrics such as “number of generation projects” are not a useful measure of a company’s commitment to renewables.

Good Energy supports over 1,600 renewable generators around the UK by sourcing our energy from them and paying a fair price for it. We’ve invested in new renewable projects and sold them back into community ownership. And, we currently own six solar farms and two wind farms.

3. What is your company vision for the future of renewables?

Everybody agrees that for the UK to meet its target of zero emissions by 2050 we will need tens of billions of pounds to be spent on new renewables projects, but there are differences of opinion on the best way to get there. Some suppliers believe that it is their role to build their own renewable assets. Good Energy believes that the future of renewables is people-owned rather than supplier-owned, distributed rather than centralised. We invest in community energy schemes to get them off the ground and support them long term by purchasing their electricity, but we don’t seek to control them. Our vision is of a democratic, locally based energy generation network.

4. “How local is your energy?”

Although green energy can be generated anywhere, there are advantages to choosing locally generated energy. Supporting local generators allows a business to boost the local economy and position itself as part of the community through its energy choices. It’s a simple way of having total transparency on where your energy comes from. And the more local generators we have, the less reliant we are on importing energy from elsewhere. Many businesses will feel that these advantages mean it’s worth paying more for their tariff.

5. “How are you greening your gas?”

Green gas – that is, biomethane gas produced from decaying organic matter – can be described as carbon neutral because the material that is decomposing has absorbed as much CO2 from the atmosphere in its lifetime as it gives off when it rots. However, in the UK we only produce enough to meet less than 1% of demand: there just isn’t enough to go round. So, most energy suppliers offer green gas with a mixture of biomethane and natural (fossil fuel-based) gas. They then then offset through carbon reduction schemes, so that the gas can be called carbon neutral.

The key question for you to ask as a broker is: what kind of offsetting are they doing? Some will be doing traditional offsetting projects such as tree-planting, but this does nothing to solve the problem that pushed them into offsetting in the first place: an undersupply of green gas. Good Energy is different because our offsetting is done through investment in green gas projects overseas. It’s all done in partnership with internationally recognised offsetting organisation Climate Care. Every unit of gas we sell is “greened” through a mirror investment in the global supply of green gas, rather than through less relevant offsetting schemes.

For more information about our energy and what we’re doing to power a cleaner, greener world, visit https://www.goodenergy.co.uk/our-energy/.

Keep in touch

Provide an email address to sign up to one of our newsletters. We won't use your email address for anything else, and you can always unsubscribe.