Greenwashing
Find out how to tell if green claims are more than just hot air.
How does greenwashing work in the energy industry?
Suppliers claiming to offer ‘100% renewable’ electricity tariffs should be sourcing enough power directly from renewable generators to match every single unit of power their customers are using. This method creates additionality and makes Britain’s electricity grid greener. This is what we do at Good Energy.
However, due to a regulatory loophole, energy suppliers can get away with labelling brown power as ‘renewable’ – when it isn’t. This is because REGOs – the certificates used to certify power as renewable – can be sold separately to renewable power. You can watch the video below to find out how this ‘accounting process’ works, and read Managing Director for Supply, Fran Woodward, explain in greater detail in her interview with The Guardian here.
What are REGOs?
Renewable Energy Guarantees of Origin (REGOs) are certificates that are issued for every MWh of clean electricity generated in the UK. Energy suppliers use them to prove to Ofgem that they have bought enough 100% renewable power to cover what their customers are using over the course of a year.
As the value of renewable power grows, REGOs are increasing in cost – which is great news for generators as it boosts their income and builds the business case for building more generation technologies.
However, REGO certificates can be sold separately from the power they relate to. This makes it possible for suppliers to buy brown power from the wholesale market, and then buy enough certificates to label it as renewable. This is a problem as it is misleading, it doesn’t directly support renewable generators, and it doesn’t lead to the grid getting any greener.
At Good Energy, we buy our REGOs alongside the power.
What makes Good Energy different?
At Good Energy, we match 100% of the electricity our customers use over a year with power we buy directly from over 3,000 independent renewable generators.
We’re ranked No.1 on the Matched Clean Power Index – an independent resource that shows how well energy suppliers match their customers energy with renewables, hour by hour. We achieve the greatest hourly match at a whopping 87%.
We buy renewable certificates (REGOs) together with the power they relate to for a fair price, which creates a supportive environment that encourages more independent generators to enter the market.
The way in which we source power has been recognised as being genuinely green. We’re a top ranked Which? Eco Provider for Energy, and the only UK energy company to receive Uswitch’s Green Accreditation.
What’s more – we’re the only B Corp certified home energy supplier in the UK.
From the blog
Read our greenwashing blogs
Further resources
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.
Read our policy paper with a foreword from Dr Jeff Hardy, Senior Research Fellow at the Grantham Institute and Former Head of Sustainable Energy Futures, Ofgem
Find out why the way we procure renewable energy creates additionality and enables more generators to come to market in this article.
Greenwashing FAQs
Any renewable generator which generates one megawatt hour of electricity is eligible to receive a certificate for that unit of power from the regulator, OFGEM. They can then sell these certificates with the power, or separately.
Many organisations want to ‘go green’ by installing renewable technology. This renewable power means reduced bills and a reduced carbon footprint.
That is clearly a good thing that should be encouraged. But the organisation does not need the REGOs associated with the power they are buying. This means they may sell them on, where they are potentially used to greenwash a household ‘green’ energy tariff.
This effectively means that the renewable electricity is being double counted - once by the corporation reporting itself to be ‘powered by 100% renewable electricity’, and once by the customer on the green tariff.
We don’t want to point fingers. Some energy suppliers are perceived as being 100% renewable – even if this messaging isn’t actually anywhere in their advertising or website. And others can legally claim to be 100% renewable by matching their customers demand with REGO-backed renewables on an annual basis.
The Matched Clean Power Index is a brilliant independent tool to help you to see behind renewable claims and perceptions. It uses public data to see how well energy suppliers match their customer demand with renewable electricity, hour by hour.
It’s true that renewable generation is getting much cheaper — which is good news for everyone. But at the moment renewable generation is still tied to the cost of gas – and until we move away from fossil fuels, or break the link between electricity and gas pricing, it will go up and down in line with the fossil fuel industry.
The big difference here is the value to the generators. We calculated the hypothetical value of just REGOs to one of our 5MW solar farms — that’s fairly big farm with three large fields covered in solar panels, producing enough power for around 1,250 homes. The value of the REGOs over a year would just about cover cutting the hedges. You don’t need to be a business expert to recognize that would be a far from sufficient financial foundation to get the solar farm built.
Meanwhile our dedicated PPA (Power Purchase Agreement) team speak to prospective generators who are creating a business case to get new renewables built all the time. We are able to give them a power price they struggle to find elsewhere, on terms that work for them, because other suppliers are not in the market to support smaller PPAs. That price allows them to create that business case, find finance, and get their generators built. Our PPA team are also a crucial source of support to the generators we work with – offering insight into how changes to the energy system could affect them, keeping them up to date on the changing price of power, and making sure they know about new regulations that are coming that might harm their business model.
Imagine if all suppliers offering green tariffs were doing the same — the market for building new renewables would explode.
Good Energy moved away from building our own generators several years ago because we can have a much bigger impact enabling others to generate clean power than trying to do it all ourselves.
We believe in a fairer, decentralised energy system. Not one where a handful of companies own all the power stations — whether those are power stations are renewable or not. Our long–term goal is to enable all of our customers to generate, share, store and use their own clean green power.
Ofgem’s supply license conditions were not intended to be abused in the way that they are. Our policy document details how the license conditions became out of date once the Climate Change Levy exemption closed for renewables in 2015, which in effect opened up the loophole. This was written with support from Dr Jeff Hardy, who used to oversee the team at OFGEM that wrote these rules in the first place.
It also explains how suppliers simply buying REGOs to back green tariffs should not be making claims of environmental ‘additionality’. These are marketing messages you might see on supplier adverts or websites that make claims like they are ‘making energy greener’ or ‘helping fight climate change’. These claims are against the regulations right now, and should be stopped.
In 2023, Ofgem changed the rules about using European GoOs to certify UK energy as renewable. This has made UK REGOs much more valuable, as suppliers are scrabbling to buy what’s left to label their power as green.
At the moment, the loophole to label purely REGO backed electricity as green still exists.
Ofgem is independent from Government, but we know that they work closely with the government’s Department for Energy Security & Net Zero (DESNZ). If government is concerned about greenwashing in the energy market, Ofgem is more likely to prioritise it. So do write to your local MP — every politician who has this issue on their radar helps.