Energy regulator bans greenwashing

Good Energy boss welcomes Ofgem clampdown on green tariff claims

Good Energy Chief Executive Juliet Davenport has welcomed new Ofgem rules which now force energy companies selling green tariffs to prove they really do provide environmental benefits.

The rules on green tariffs, which come into force on April 1, are part of Ofgem’s Retail Market Review to make the market simpler, clearer and fairer for consumers.

Last year Ofgem raised concerns that energy customers were unable to tell the difference between genuine green tariffs and those which don’t offer any real benefits.

Juliet Davenport said:

“This clampdown is good news for customers. People buy a green tariff because they believe they are making a difference and the company supplying the electricity is really dedicated to renewable energy.”

“The rules should prevent suppliers over–stating their ‘greenness’ or positioning themselves as green when they are getting most of their power from coal or gas. That’s not what the customer has in mind when they choose a green tariff.”

“From talking to customers about their experiences, there’s evidence of people being misled.”

Suppliers must now clearly state if a green tariff does not offer any environmental benefit above and beyond that already paid for through government policy, and must show evidence of where its electricity has come from by holding special certificates.

And firms must also show that they invest their own time and money into renewable energy, as a result of customers choosing its green tariff, and not just packaging the existing environmental obligations as something extra.

Good Energy estimates that there are around 225,000 electricity customers on 100% renewable tariffs in the UK.


What the customers say

Case study 1, Rachel Cox a Teaching Assistant from Nottingham.

“I signed up to a supplier’s green tariff based on its sustainable appearance. Its website and social media alluded to it being very concerned with climate change and gave the impression it was helping to save the planet. But only after I signed up I realized that, despite offering a green tariff, this supplier relied heavily on burning coal for most of its power. I was shocked to see how little renewable energy actually went into its overall fuel mix. I think the new rules will help people like me from being misled.”

Case study 2, Nev Stokes a Web Developer from Edinburgh.

“I left one of the big 6 suppliers in search of authentic green electricity. There were quite a few providers offering green tariffs but it was hard to tell what portion of their electricity came from renewables. Some companies offering green tariffs are definitely not very green, but it’s pretty confusing when their marketing is so slick. Hopefully the new rules will make it easier to spot a company which gets 100% of its power from renewables from those just making a token effort.”


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Notes to Editors

For more information on Ofgem’s new rules which take force on April 1 2015 click here.

Suppliers offering green tariffs in the UK are Good Energy, Ecotricity, Ovo Energy, LoCo2, Green Energy, Green Star Energy and Woodland Trust.


Ofgem has introduced three key principles that green tariffs will need to follow from April 1 2015:

1. Transparency - To help consumers understand the market better, Ofgem is asking suppliers to clearly say if a green tariff does not offer any environmental benefit other than those that consumers already pay for through costs embedded in their energy bill or through taxation. This includes publishing an annual report on how they are providing environmental benefits or being clear to consumers if it doesn’t.

2. Environmental benefits – Suppliers will need to show that environmental benefits happen because consumers chose a tariff and not solely due to subsidies or supplier obligations. This requirement will protect consumers but will also allow suppliers flexibility and opportunities to innovate.

3. Evidence of Supply - Suppliers must have evidence that verifies where the electricity supplied in a tariff comes from. This means that they must show they have enough Renewable Energy Guarantees of Origin certificates and have retired any other certificates for the same products.


About Good Energy

Good Energy is a fast-growing 100% renewable electricity supply company, offering value for money and award-winning customer service. An AIM-listed PLC, and founder member of the Social Stock Exchange, our mission is to support change in the energy market, address climate change and boost energy security. Good Energy matches over the course of a year all the electricity its customers use with power from renewable sources. Good Energy has consistently been ranked top or second in Which? energy company customer satisfaction surveys for the past four years. Good Energy’s dual fuel tariff is cheaper on average than the standard tariffs sold by the ‘Big Six’ before discounts. Good Energy invests in renewable energy including wind, solar and early investment in Tidal Lagoon Power.

Twitter: @GoodEnergy  

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