New standards aim to tackle greenwash from renewable electricity suppliers
- 73% of consumers want stricter rules on energy suppliers making green claims, and 38% believe energy suppliers are more likely to greenwash than other businesses
- Good Energy introduces new transparency standards for renewable electricity suppliers and calls for the industry to follow suit
Good Energy, the renewable electricity company, has introduced new transparency standards on where it sources its energy, laying down a challenge to the rest of the industry and calling for much greater clarity from other suppliers, amid claims that energy companies are “greenwashing”.
It says energy suppliers can still buy power from fossil fuels and sell it to consumers and businesses as “100 per cent renewable”, due to a misleading system relying on renewable energy certificates. These Renewable Energy Guarantees of Origin (REGOs) are often traded via a thriving secondary market, meaning suppliers can source energy from fossil fuel sources, and then buy certificates to label a tariff as green.
Analysis1 by Cornwall Insight commissioned by BT Group and published in October 2024 estimated that, if all REGOs were traded at spot prices seen at the time of writing, £1bn would be spent annually on REGO certificates, without evidence that this is being reinvested towards the growth of renewables. The report states that if allocated elsewhere this spend on REGO certificates by the industry could deliver around 1,900MW of solar generation, 680MW of onshore wind or 400MW of offshore wind; in each case enough to power around 660,000 homes and reduce the UK’s annual carbon emissions by roughly 900,000t/year. The report stated that although REGOs allow organisations to report lower emissions, this does not necessitate lower energy consumption or real-world emissions reductions.
Good Energy’s new research3 suggests that consumers are confused by the lack of clarity over renewable electricity supply, duped into thinking the energy they use is 100 per cent renewable when it’s not. Over half of consumers (54%) with 100% renewable tariffs believe their supplier gets all of their electricity from renewable sources. A 2021 report by Good Energy and Scottish Power2 found Good Energy to be the only supplier to back all of the power it supplies customers with direct agreements with renewable generators, and Good Energy remains the only supplier to not only make this claim but have it independently audited. Meanwhile the market is rife with confusing supplier claims such as “certified green energy we buy… via the wholesale market”, when it is impossible to buy green energy on the wholesale market as it is a mix of all sources.
This confusion is also causing consumers to turn away from choosing renewable energy products. There is a lack of trust in energy suppliers, with 38% of adults saying energy suppliers are more likely to greenwash than other businesses (compared to just 10% who disagree). One in five (20%) even believe their own supplier is greenwashing.
The new data reveals that three in four consumers (73%) believe there should be stricter rules for transparency on how energy suppliers market their green claims.
Independent assessments of energy suppliers’ green credentials exist, but are increasingly broadening in scope to include factors such as whether a supplier offers flexible ‘time-of-use’ tariffs or sells other green products like heat pumps and solar, which are irrelevant to how green a customer’s electricity is unless they are on such a tariff or buying these products.
In response, today Good Energy has launched Good Green Supply – three key metrics for renewable suppliers to share how they score on the sourcing principles that matter for transparency and growth of renewables – and is calling on other renewable suppliers to do the same.
The metrics are:
- True green – The percentage of power sourced directly from renewable generators. This could come from direct agreements with renewable generators or suppliers’ own wind or solar farms. This is to expose the practice of buying power from fossil fuels while selling it as ‘renewable’ through deceptive clean energy certificates.
- New green – The proportion of power from generators which are new to the grid. This is to reinforce the importance of continuous decarbonisation of the grid by connecting new renewable generators to it. A third of consumers (34%) say they are prepared to pay more for an energy tariff that genuinely supports the growth of renewable energy.
- Time-matched green – The amount of customers’ energy usage that is matched to renewable generation hour by hour. Currently, suppliers can match winter electricity use with certificates from midsummer solar power, for example, which is not only misleading it is unhelpful in creating an energy grid that generates clean power when it is needed. This metric will demonstrate the amount of renewable electricity actually generated when customers are using it.
The company is launching the initiative with a video explaining Good Green Supply, available here.
Good Energy is disclosing its scores for the most recent Ofgem fuel mix disclosure period, which runs from April to April annually, on its fuel mix disclosure webpage. Its scores are 100% true renewable, 40% new renewable and 90% time-matched renewable. The company is asking other suppliers disclose their scores either now or alongside their next fuel mix disclosure period later this year, which will relate to the period April 2024 – April 2025.
Good Energy’s research reveals that very few people are deliberately choosing renewable tariffs. Of those who have a 100% renewable tariff, only 7% deliberately chose it versus 79% who didn’t.
Scepticism and lack of transparency are preventing others from choosing one. Of those people who don’t have a renewable tariff, 24% say it’s because they don’t believe they are actually 100% renewable; 20% don’t understand how they work; 13% say they’re not transparent; and 11% think they don’t really help make energy more sustainable.
Nigel Pocklington, Chief Executive, Good Energy, explained: “Most people don’t know what it means to be certified as a renewable electricity supplier, and if they did, they’d be shocked. Your energy supplier can buy most of your power from fossil fuels and sell it to you as ‘100 per cent renewable’.
“The current system uses certificates and middlemen, making renewable claims deceptive. We believe customers deserve better; the current standards aren’t fit for purpose and we want more transparency. Clarity around how transparent suppliers actually are in sourcing renewable electricity is one of the major roadblocks preventing British households and businesses from being able to play an active part in our net zero ambitions. The demand is there but the industry is not being nearly honest enough with customers.
“We’re calling on other renewable suppliers to reveal their data on these important metrics to help drive true decarbonisation of the grid. We’re also asking for the Government to make this level of transparency mandatory so that people and businesses can be assured that choosing a green supplier helps to create a greener energy system.”
Joe Kwiatkowski, Founder of Matched, an open-source initiative that tracks the renewable content of electricity tariffs using publicly available data, said:
“The decarbonisation of the grid has led to significant differences in how renewable energy is sourced, but reporting standards have not kept pace. Customers require clearer, more detailed disclosures to make informed choices, and we welcome this initiative from Good Energy.
The majority of respondents responding to a government consultation on REGO reform in 20214 argued that the current approach does not provide a sufficient level of transparency.
Good Energy wants to see more clarity in the energy market so that brokers and customers understand exactly what they are buying. It believes that if suppliers want to sell renewable electricity to their customers, they should have to buy it from generators in the first place. This would result in a more level playing field in pricing for the end customer, and a boost in genuine investment for renewables – already the cheapest form of electricity generation – that could bring the price down for everyone.
ENDS
Research methodology
Consumer research conducted by OnePoll on behalf of Good Energy between 16th and 20th May 2024, sample size of 2,000 UK adults representative on the basis of age, gender and region.
Notes to editors:
1 ‘Reviewing the Future of REGOs for Corporates’, Cornwall Insight, published October 2024
2 Research conducted online by OnePoll for Good Energy. Fieldwork was undertaken between 16-20th May 2024 amongst 2,000 UK adults and results have been weighted to be nationally representative.
3 ‘Come Clean on Green’, Good Energy and Scottish Power, 2021
4 ‘Designing a framework for transparency of carbon content in energy products’, Department for Energy Security & Net Zero, summary of responses published 2023
Media contacts
Good Energy
Ian McKee / Rhiannon Barriball
Call 01249 765558 or email press@goodenergy.co.uk
About Good Energy www.goodenergy.co.uk
Good Energy is a supplier of 100% renewable power and an innovator in energy services. It has long-term power purchase agreements with a community of more than 2,500 independent UK generators, is the UK’s largest voluntary administrator of the Feed-in-Tariff scheme and offers solar and heat pump installations.
Since it was founded almost 25 years ago, the company has been at the forefront of the charge towards a cleaner, distributed energy system. Its mission is to power a cleaner, greener world and make it simple to generate, share, store, use and travel with clean power.