Greenwashing energy

As the world wakes up to the urgency of climate change, more and more people want to do their bit to help fight it. And one of the easiest ways to do so is by switching to an energy company that supplies 100% renewable electricity. 

Or at least it should be. Unfortunately, greenwashing and the broken regulation around green tariffs is making it harder.  

Why choose a green tariff?

Our research has shown that 65% of people would switch to a green tariff if it meant that it helped support the transition to a clean energy system.  

More than half of the energy tariffs available today are being marketed as ‘green’. But in the vast majority of cases, the suppliers offering these tariffs are buying dirty power from the wholesale market, and labelling it green through a regulatory loophole. Meaning they are not doing what customers expect them to do — support the growth of renewables. 

How do fake green energy tariffs work?  

No energy supplier will hook up your home or business to a seperate 'renewable only' electricity grid. But every electricity supplier must match the amount its customers use with power sourced from somewhere. Suppliers offering green tariffs are supposed to source this power from renewable generators.  

However, instead of most suppliers offering ‘green tariffs’ simply buy power on the wholesale market, which is a mix of all sources including fossil fuels and nuclear. They then separately acquire certificates to label this brown power ‘green’. The certificates are either UK Renewable Energy Guarantees of Origin (REGOs) or European Guarantees of Origin (GoOs).

It is a complex topic, so here we have pulled together all the resources you might need to get to grips with it. 

• The problem of greenwashing in the energy retail market — Good Energy’s policy paper with foreword from Dr Jeff Hardy, Senior Research Fellow at the Grantham Institute and Former Head of Sustainable Energy Futures, Ofgem. 
• Renewable energy in Europe — Our analysis of how UK energy suppliers are using European Guarantee of Origin Certificates not only to greenwash tariffs, but to avoid paying the mandatory support mechanisms for UK renewables. 
• Come Clean on Green — Good Energy's joint report with Scottish Power, using data published by independent consultants Baringa, looking at which suppliers are backing their domestic and business tariffs with renewable power, and which are just greenwashing.
• How Good Energy trades renewable power — Why Good Energy’s agreements with over 1900 generators and the way we trade power is so dramatically different to other ‘green’ suppliers. 
• Greenwashed energy tariff FAQ — What are REGOs? Is renewable energy being double counted? Shouldn’t renewable electricity be low cost? Your greenwashed energy questions should all be answered here. Get in touch at greenwash@goodenergy.co.uk if it’s not though.  
• The greenwash suppliers — How do you know which suppliers are greenwashing? Which? have published a report.  
• Our blog — We have been writing about greenwashed energy tariffs on our blog since 2017. You can find all of our posts about greenwashing here. 

Are you a procuring green electricity for a business?

The same REGO loophole applies. And you don't have to take our word for it, the corporate green electricity procurement guides from the Committee on Climate Change and The UK Green Buildings Council both address the lack of provenance and additionality of pure REGO backed tariffs. 

It is widely understood that even with the increasing value of REGOs, the structure of the system will never provide prices high enough that will act as a support mechanism for new generation on its own. This would only happen if the energy supplier of the green tariff specifically chooses to enter into new capacity generation contracts (PPAs).

- The Committee on Climate Change, Corporate Procurement of Renewable Energy – Implications and Considerations

In 2020, REGO certificates were priced between 20-50p per certificate. In practice this means that suppliers could purchase fossil fuel power but sell it as a green tariff or 100% renewable energy if supported by an equivalent amount of REGO certificates.

- The UK Green Buildings Council, Renewable Energy Procurement & Carbon Offsetting Guidance for Net Zero Carbon Buildings