Are green electricity tariffs just greenwash?

A good starting point is this piece recently written by the BBC. Whilst it was written with domestic consumers in mind the principles apply to business electricity supplies as well.

https://www.bbc.co.uk/news/business-56602674

Many green electricity tariffs are nothing more than electricity bought as it always has been by the energy supplier and then given a green ‘coat of paint’ in the form of Renewable Energy Guarantees of Origin (REGOs).

As suggested by the BBC this costs £1-£2 p.a. for a domestic property. To put this into perspective a renewable electricity generator might receive the following for the electricity it sells:

• Electricity itself on the open market

  • 6.00p/kWh

• Subsidies such as the Feed in Tariff, large variation here but perhaps

  • 10-20p/kWh

• REGOs

  • 0.05p/kWh

So REGOs represent <1% of the income received by a generator of renewable electricity.

Some electricity suppliers buy renewable electricity direct from generators which has a better feel to it. But they often still gloss over the fact that on a cold, dark, windless teatime in winter they haven’t got enough renewable electricity to go round and they rely on ‘dirty’ electricity to fill the gap.

The better suppliers go one step further and work hard to match it to the electricity used by their customers every half-hour; even when it is a cold, dark, windless teatime in winter. They might not suceed 100% of the time but they get close. But in my experience these suppliers don’t pay any more for the renewable electricity they buy than others do. So little, if any, more renewable electricity has been produced as a result.

It is also worth noting that the vast majority of the increase in renewable electricity in recent years has been driven by subsidies like the Feed in Tariff (FiT) and Renewable Obligation Certificates (ROCs). These subsidies are paid for by adding the cost to your electricity bills – regardless of whether you buy via a green tariff or not. These add c. 5p/kWh to the cost of the electricity that we use; 100 times the cost of REGOs. So anybody who is claiming some kind of moral high ground for buying green electricity is only 1% better than somebody who is not.

Buying electricity via a green tariff is not bad but it is nowhere near as good as some would like us to believe. But with green tariffs often costing no more than a non-green tariff why not buy green?

In case you’re wondering – I buy green but for other reasons. Expect a blog on this another time.