How do green energy tariffs work?

Renewable Energy Guarantee of Origin (REGO) certificates are issued by Ofgem, the UK energy regulator, to renewable energy generators for every megawatt hour of green energy they produce. A megawatt hour (Mwh) is equal to 1,000 Kilowatt hours (Kwh) and is equal to 1,000 kilowatts of electricity used continuously for one hour. The certificates can then be bought by suppliers, who can submit them to Ofgem to prove they are buying electricity from renewable sources.

The issue is that while these certificates can (and theoretically should) be sold with renewable energy, they are also sold separately for as little as £1 each, so suppliers can buy extra REGO certificates to exaggerate how much renewable energy they are actually using. They can therefore continue to buy electricity from the fossil fuel industry while buying certificates to appear eco-friendly to consumers, in a practice that some refer to as “greenwashing”.

Suppliers often claim to use 100% renewable energy in their fuel mix but this isn’t necessarily always the truth – if their older fuel mixes show large proportions of non-renewable sources but their new ones suddenly seem to be all-green, then you probably have reason to be suspicious. The government has recently launched a review into the rules around green tariffs in an attempt to curb greenwashing and push suppliers to be more transparent about how they source their energy.

This doesn’t mean that fuel mixes can’t provide useful information to help you choose a supplier, or that every supplier is lying. However, if you can do your own research into how a supplier sources their energy, or contact them to ask how they do this and whether they buy REGO certificates, you may get a more accurate idea.

Author: wpadmin

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