Get the most eco-friendly energy without being green-washed
Summary:
- If you want to have the most eco-friendly energy possible, go for a supplier such as Good Energy or Ecotricity, who uses their profits for building new renewable capacity.
- Simply being on a renewable energy tariff may not be helping.
A third of households in the UK are on a renewable energy tariff. This is a significant chunk of the population, so this sounds like relatively good news. Even better news is that of everyone that switched supplier in 2020, 81% switched to a renewable tariff.
However, there is an issue with what a “renewable energy tariff” actually is. The way that suppliers typically describe it is that for every unit of energy you use, they guarantee that one unit of electricity will have been produced through renewable means.
But this is where it gets complicated. There’s no requirement for the supplier to actually purchase renewable electricity from a windmill farm, solar park etc. Instead, they can simply buy what’s known as a Renewable Energy Guarantee of Origin (REGO) certificate for every unit you consume. A REGO is produced every time a renewable generator produces a unit of energy, and can be sold on to other suppliers. In theory, that’s a good idea. But because the number of units of renewable energy produced actually exceeds the amount being specifically requested by households, REGOs are very cheap to buy.
This means a supplier can buy or produce carbon-intensive “brown” energy, purchase a dirt-cheap REGO, and sell the electricity onto you for a premium as “green”. If this is your situation, you’ve been greenwashed.
In theory, if enough people switched to renewables tariffs then the demand for renewable energy would match or exceed supply, and REGOs would be worth their weight in gold. That would heavily incentivise new suppliers to produce renewable energy, in turn generating valuable REGOs that they can sell. But this is not currently the case.
So to make sure that you’re actually doing the best you can with the energy you buy, make sure you buy from a company that either generates its own green energy (and no brown energy), or that actually buys it from renewable producers – and can prove it. Even better are companies who invest their profits from selling electricity into building new renewable capacity.
The firms that are widely-cited as being the greenest to buy from in the UK are Ecotricity, Good Energy and Green Energy UK. Personally, I’m an Ecotricity customer and can recommend them.
One thing to note is that the greenest energy also costs the most. Perhaps up to twice what you’re used to paying if you’re on the cheapest tariff available. So not everyone will be able to make this commitment. But if you are in the position to do so, and it is something you do want to do, make sure you’re giving your money to companies actually alligned with what you want, rather than just saying they are.
If you’d like to read a little more on this subject, a couple of links with longer articles:
The other thing to think about is gas supply. Unfortunately the vast majority of gas supply is from “natural” gas, i.e. fossil fuels. But companies such as Ecotricity have been able to produce a small share (about 15%) from renewable sources. These are worth looking into as well.