Signing up to a green energy tariff does not guarantee your business will get the direct benefit of green electricity and not all so called ‘green suppliers’ use clean, reusable energy. Some suppliers purporting to be green accept electricity generated by landfill gas, the burning of waste in incinerators or hydro or nuclear power. These tariffs may save money but are not necessarily green or renewable. Make sure you know what you are paying for.
Green energy comes from renewable resources including power generated by wind, solar, geothermal, small hydro-electric, wave and biomass sources and by combining effective energy efficiency measures. By purchasing all or even a proportion of your energy supply from renewables, you can reduce the environmental impact of your energy use and support the renewable power industry.
If you sign up to a green tariff it means the demand for green electricity within the grid has to be matched by an equivalent supply. This means developing new green energy sources. Renewable energy is pooled along with electricity generated by other sources in the national grid. It does not guarantee that your business gets green electricity in the office.
The UK has the largest potential for renewable energy within Europe, and government statistics show we could be meeting almost 40% of the country’s electricity needs from green sources by the year 2025. The UK government passed the Renewable Energy Obligation in 2002 requiring all electricity suppliers to provide 3% of their electricity from renewable sources. This level rises each year until it reaches 10% by 2010.
At present two thirds of electricity in the UK is generated by burning coal and gas in power stations which releases millions of tonnes of carbon dioxide, the main gas responsible for climate change. Apart from the environmental damage, extracting these fuels is becoming more difficult as we use up the easily accessible fuel, and it is obviously non-renewable. Much of the remainder comes from nuclear power, which is expensive, has the potential to cause catastrophic accidents and leaves waste products which will require looking after for literally thousands of years. Solar, wind and wave power are renewable but still need capital investment and have environmental impacts. Green electricity can be a combination of different sources, some with much greener credentials than others.
What should I look for when purchasing green electricity?
There are two main types of green electricity tariffs. Energy tariffs and fund tariffs, or you can buy a combination of the two which is considered better. Energy tariffs ensure that for every unit of electricity you use, the same amount of green electricity is generated. Fund tariffs enable the electricity company to take the extra that you pay on your bill and invest it in new renewable energy projects. These contributions are deducted from your bill, either as a fixed rate or in the form of a premium. The combination of the energy and fund tariffs are attractive and the most common.
Green energy can be complicated, but it should not be. It is worth noting that Friends of the Earth no longer produces its informative list of “green” energy suppliers. The charity believes the government should be doing more and that by paying for a green tariff you could end up simply paying extra to help the electricity company meet its legal obligations – without increasing demand for renewable electricity.
Not only that, but because companies can trade their Renewable Obligation Certificates (ROCs), in theory they could sell renewable electricity twice, which defeats the object. ROCs are digital certificates which hold details of exactly how a unit of electricity was made, by whom and also who bought and used it. ROCs are traded separately to the actual electricity itself and work as a bonus premium on top of the price paid for the unit. Because energy companies must now generate at least 10% of their electricity output from sustainable sources they can buy ROCs on the open market to make up any shortfall in that 10%. Because companies can trade their ROCs, in theory they could sell renewable electricity twice – once to the consumer, and once through selling the certificates to another company.
In addition the Climate Change Levy imposed by the government to encourage cleaner electricity generation can be abused by so called green suppliers. Levy Exemption Certificates can be used in the commercial sector as proof of purchase of green electricity that is exempt from the levy. Each and every electron of electricity receives two certificates – one from the ROCs and one from the Climate Change Levy – but there is still only one electron. Thus there is the possibility of further double counting between the domestic and commercial markets.
Companies and organisations worth looking at and useful websites
www.foe.co.uk Friends of the Earth no longer produces green energy league tables but is an excellent site for information on green issues, plus extensive relevant documents.
www.greenpeace.org.uk Juice is a green energy developed by npower in partnership with Greenpeace. Juice does not cost any more than normal npower electricity.
www.nef.org.uk the National Energy Foundation provides information on renewable energy.
www.cat.org.uk offers solutions and a wide variety of useful information.
www.ecotricity.co.uk Ecotricity build and supply new sources of renewable energy to homes and businesses and plough profits back into building new sources of green electricity. Ecotricity say they are an independent and ethically focussed company, which won’t cost more than normal electricity because they will match the price of your local supplier.
www.energylinx.co.uk provides information on all main companies providing green electricity.
www.greenenergy.org.uk Green Energy wants to create an environmentally responsible electricity supply industry. It offers two green tariffs, one to provide 10% of green electricity at a price set at the same level as your regional electricity supplier, and the other, Green Energy 100 is 100% pure green electricity at a small premium over your regional electricity supplier. Green Energy plans to reinvest up to 50% of profits back into UK renewable electricity generation projects and buy all their renewable energy from British sources.
www.rspb.co.uk RSPB Energy has a green price plan and does not cost more than your local electricity supplier and donations are made to the RSPB.
Other green energy companies which may be worth a look at include GreenPlan from Powergen which is endorsed by WWF and helps pay for renewable energy projects in the community. Powergen has wind farms in the UK and Ireland and plans to develop more.
Green Tariff Customers from London Electricity pay a premium which goes to the Green Energy Fund. Green Energy from ScottishPower helps finance renewable generation and other environmental and educational projects which directly benefit local communities using a premium which is donated to the Green Energy Fund.
www.thecarbontrust.co.uk the Carbon Trust, the independent, government funded company that helps business and the public cut carbon emissions and supports the development of low carbon technologies.
www.cat.org.uk Centres for Alternative Technology (CAT)
UK trade associations for energy
www.british-hydro.org British Hydropower Associations (BHA)
www.r-p-a.org.uk Renewable Power Association
www.scottishrenewables.com Scottish Renewables
