Lots of energy suppliers today are marketing themselves to be 100% green but what does 100% green mean? When you add up all of the renewable energy capacity in the UK you will find that this is a lot less than the actually capacity being sold by suppliers. So what is going on?
Well the reason for this mismatched between installed capacity and capacity sold is that renewable energy generators are maximising their trading receipts by selling their REGOs to energy suppliers that want to sell their tariffs as green. REGOs being “Renewable Energy Guarantees Origin” certificates which are basically electronic allocated certificates that are allocated to renewable energy generators for every kWh of generation produced from their renewable energy plant.
Now having a certificate to confirm that a kWh of renewable energy is indeed renewable is a good thing BUT not when the certificate can be sold separately from the energy itself. Why is this a bad thing?
Well the reason it is a bad thing is because it causes “double accounting”. For example a factory owner installs 1MW of wind and generates 1600 MWh of electricity, let’s assume all of the electricity generated is used by the factory (a good thing) but the factory owner still gets 1600MWh worth of REGOs that he/she can legitimately sell into the open market. A supplier can buy these REGOs and then use these to prove that 1600MWh of electricity they have supplied is renewable (even although it probably isn’t).
This arrangement allows suppliers to pass off brown electricity as green electricity (greenwash) and gives the false impression that there is a lot more renewable energy capacity installed in the UK than is actually installed (virtual renewable energy as opposed to real). So this is not a good thing for those wishing to promote renewable energy and who want to see more renewable energy plant installed in the ground.
So what can we do?
Well if you are thinking about buying a “green’ tariff then before you buy you should look at the companies actual generation mix. Look and see how much renewable energy they actually have in their generation portfolio. If they don’t generate themselves than have a look to see if they state what renewable generation stations they actually buy from (some companies actually tell you who they have contracted with which is a good way of auditing these companies).
Companies that buy REGOs but don’t actually build renewables electricity from the renewable generators are “greenwashing”. They are basically selling you something that isn’t green (like laundering dirty money but less criminal – or perhaps more criminal depending on which side of the fence you are on?).
We have done some research and we believe that there are very few suppliers actually supplying 100% renewable energy. Most are buying REGOs and marketing themselves as 100% renewable energy. The reason we know this is that anyone can check how many REGOs have been acquired and by which companies and for which generators.
If you really want to buy green then do your homework and check to see which suppliers have renewable generation (not bought in but rather have plant generating green electrons).
Buying green may not be cheap but it is certainly worth it in the long run. Its like buying from your local charity shop, you get something you want while at the same time helping someone else – its a feel good factor. So go on treat yourself to that feel good factor.