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FROM THE ARCHIVE: Power corrupts
When journalists reel off the steps we should take to go green, high on the list, alongside flying less and buying low-energy lightbulbs, is signing up for a green electricity tariff. It’s not hard to see the appeal. Power stations are among our biggest sources of greenhouse emissions, so opting for a greener electricity supply seems like an obvious way to make a difference.
There are plenty of decent-sounding green tariffs out there. Sign up for Juice, for instance, and ‘npower matches every unit of normal electricity that you use and feeds the same amount, generated from renewable sources, into the electricity network’. Or you could choose an eco specialist such as Good Energy, which supplies ‘100 per cent renewable electricity’. Even these apparently excellent tariffs cost the same, or only slightly more, than standard ones. So you can leave all your lights on without hurting your conscience or your wallet.
If that sounds too good to be true, that’s because it is. Dig a little deeper into the green electricity market and you realise that the whole area is full of disingenuous claims and environmental double-accounting.
The main catch is a piece of legislation called the Renewables Obligation, which obliges all UK electricity companies to buy a proportion of their power – 6.7 per cent today, rising to 15.4 per cent by 2015 – from renewable sources. This is an important law, which raises the demand for low-carbon power plants.
Unfortunately, however, companies can include the electricity they sell via special green tariffs as part of their legal obligation. So in the case of a scheme such as Juice – which accounts for less than one per cent of npower’s customer base – consumers are simply receiving green energy that the supplier was going to have to buy anyway. No extra green power is being generated. (Admittedly npower also promises to put £10 per year per Juice customer towards renewable energy research, but that’s small fry compared to a typical annual bill of £383.)
So what about the specialist companies that deal only in renewable electricity? Sadly, they also offer far less environmental benefit than you’d think. In order to show that it’s met its legal obligations, an electricity company has to be able to show proof of purchase Renewable Obligations Certificates (ROCs) for energy bought from sources such as windfarms. These are tradable, meaning that suppliers which exceed the 6.7 per cent minimum requirement can sell their extra certificates to those which have failed to meet it.
Surprisingly, even the greenest power companies take advantage of this and sell all, or nearly all, of their extra ROCs to less holy competitors. For example, last time I checked, Good Energy was selling 90 per cent of its ROCs, holding on to the 6.7 per cent it needed and ‘retiring’ (removing from circulation) just 3.3 per cent. In effect, this means when you sign up for its tariff, only 3.3 per cent of the electricity you buy will be green power that would otherwise not have been generated. This is better than nothing, but a very long way from customer expectations.
This whole situation would change if more than 6.7 per cent of electricity consumers suddenly signed up to green tariffs. At that point, every new customer would be directly adding to the demand for green power. But if that ever happened – and currently the figure is less than one per cent – such tariffs would simply become very expensive. Indeed, according to a National Consumer Council report, green tariffs that truly create green power generation over and above business-asusual would cost hundreds of pounds extra per year for the average household. After all, building windfarms isn’t cheap.
Don’t get me wrong. I’m categorically for green electricity. And I have nothing against Good Energy and Juice, which are among the best of the green tariffs. But we clearly need a firm regulatory framework so that green consumers know what they’re getting. If we’re to tackle climate change, we need to be honest about our impacts. Making consumers feel green without changing anything may be worse than doing nothing.
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