Unless you generate your own power, you can’t guarantee that the electricity flowing into your home is produced in a clean, renewable way. The national grid takes in and distributes all the electricity that feeds it: the “brown” (produced in power stations run on fossil and nuclear fuels) along with the “green”. So when you buy green electricity, what’s going on?
For every 1MW of green electricity created by a renewable energy producer, they earn a REGO (Renewable Energy Guarantee of Origin) Certificate. Ecotricity describes this as a “birth certificate” for that unit of green power. The power goes into the grid and the producer is paid for it. Where does the certificate go? The producer doesn’t own the power any more, it’s gone into the national mix. The certificate can be sold – separately – to any electricity company. Whoever owns the certificate owns that unit of green energy, and they can allocate it to the customers who’ve asked for clean fuel. The certificates help account for green energy that has been passed on to customers.
If we at Gower Power built a coal-fired power station, pumped that energy into the grid and sold it to customers, we could also offer a green tariff by purchasing enough REGOs to cover the amount of green electricity you, our customers, wish to use. We would promise you 100% green fuel, we’d buy enough certificates to ensure we owned enough green fuel to deliver that, and everyone’s a winner … you’re now being supplied by an ethical, clean, future-focused company – right? Remember our business: we produce electricity using coal. According to Which?, “it can cost suppliers as little as £1.55 per year to say that your year’s electricity supply is renewable”. That’s how much we pay for the REGOs. But the bills you pay us are way higher than that. You’re investing in our coal-fired energy production. Thank you!
Maybe we’d actually purchase the green electricity from the renewable producer, as well as the REGO. That’s an investment in renewables – right? Well, most of the renewables in operation now are heavily subsidised by government grants derived from bills. Buying from them isn’t an investment in additional green power production, and that’s what is really needed. As one blog on this tricky subject says: “we need about 3GW of new renewable generation capacity annually if we are to achieve our 2050 net-zero target and work towards averting a catastrophic climate breakdown.” Buying green power from existing sources and shuffling certificates around won’t get us there.
Our imagined Gower (Coal) Power also has non-green customers – we give them a mix of green and brown fuel. When more customers ask for just green power, we allocate more of it to them, and more brown goes to the other lot- generated ourselves or bought from other brown sources. Of course, we could buy more green instead … but it costs more, particularly when more people are asking for it and not enough is being produced. Genuinely 100% green power, from genuinely 100% green companies, does cost more – for now.
We need more renewable sources to be created. If you can’t buy from a local green energy source you can trust, buy your green electricity from companies that Which? approves as genuine green suppliers, look at how they are investing in our future, and always be suspicious of low-cost green tariffs. This great video from Ecotricity explains more.