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” (from 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, the producer earns 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 flowing into the grid that has been passed on to customers.
Imagine a new company: Smog Energy. They build a coal-fired power station, pump that energy into the grid and sell it. For eco-conscious folks like you, a green tariff is offered – and it’s cheaper than others, so you go for it. They “provide” your green energy by purchasing REGOs. So long as they buy enough certificates to cover the units of green fuel you use, everyone’s a winner: you’re supporting an ethical, clean, future-focused company – right?
Remember Smog’s business: they 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”. Smog pays £1.55 per year for the REGOs. But you pay them way more than that. So – you’re supporting coal-fired energy production.
Maybe Smog would actually purchase units of green electricity from the renewable producer, as well as REGOs. 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. As one helpful 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.
Smog Energy also has non-green customers. Smog allocates them a mix of green and brown fuel. When more customers like you ask for green power, Smog balances things by allocating less green to the other lot, topping them up with more brown fuel, either generated by Smog themselves or bought from other brown sources. Of course, they 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 built. If you can’t buy from a local green energy source you can trust, please 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.