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Green energy and green tariffs

Hanyards turbineOne way of reducing carbon dioxide emissions is to buy “green” electricity which is generated from renewable technologies (usually wind farms, hydro-electric, photo-voltaic or biomass). Most electricity companies have a “green” tariff, but comparison is confusing.

The Renewables Obligation was introduced in 2002, and set targets for renewable energy (4.9% in 2005, rising to 10% by 2010) that electricity companies had to reach, or else pay a fine. Companies exceeding the target were able to trade their certificates (called 'ROCs') to another company who had not reached the required level.

Feed-in tariffs

In 2014 the government announced the closure of the Renewables Obligation. This affected large-scale solar PV from 1 April 2015, and all other new generators from 31 March 2017. Instead, as part of its Electricity Markets Reform, it introduced a system of payments for low-carbon electricity called Contracts for Difference. Smaller-scale projects up to 5 megawatts capacity, which include domestic and smaller commercial installations, continued to receive financial incentives through feed-in tariffs (FITs). These were introduced in April 2010.

How 'green' is my energy?

So-called 'green energy' can mean various things. 'Green electricity' generally falls into one of the following categories::

  • 'Green' source tariffs - where some or all of the units of electricity used by a customer are matched by a unit purchased by the supplier from a renewable generator, such as a wind farm, solar farm or hydroelectric company. Suppliers are obliged to publish annually the fuel mix showing what proportion of the electricity they supply comes from renewable sources. A few smaller suppliers specialise in truly 'green' energy, including Good Energy, Ecotricity, OVO, Green Energy, and LoCO2 Energy. These can offer '100% green electricity', although the mix of renewables may include some nuclear energy.
  • 'Green fund' tariffs - customers pay a premium that is used to finance the construction of new renewable sources of electricity generation, or other environmental projects. But most or all of the energy is derived from fossil fuels, so such tariffs can be for gas as well as electricity, as natural gas is itself a non-renewable resource.

So, not all 'green' tariffs supply 100% renewable energy. In fact many are 'green fund' type tariffs, the nature of which will have an impact on your carbon footprint if switching. Most price comparison websites will provide information about exactly how 'green' the tariff is. The Green Energy Supply Certification Scheme, introduced in February 2010, used to verify the claims made by companies for their 'green' tariffs, and awarded a 'Green Label' to energy products that 'deliver a real, measurable environmental difference'. However, this scheme closed to new applicants in April 2015, in the wake of requirements for greater transparency imposed on suppliers by energy regulator Ofgem.

'Green' gas

A number of suppliers now offer gas in varying shades of 'green'. This can be achieved in two ways. First, the supplier purchases biogas, principally biomethane, produced in UK-based anaerobic digesters from organic material, such as sewage, food waste or crop residues. This biomethane can be injected directly into the gas grid. Because the carbon dioxide released on burning matches that absorbed when the crop was growing, it is described as carbon neutral - in other words there is negligible net contribution to atmospheric carbon emissions.

At present, only a small proportion of gas consumed is biogasl. So in order to claim 100% carbon neutral gas, companies can offset the balance of their customers' carbon emissions from gas by investing in carbon reduction schemes. For example, Good Energy offsets the emissions of its Green Gas customers by investing in aforestation programmes, the installation of biogas plants in Vietnam, and financing more efficient cooking stoves in Nepal..

You can read more about green gas on the website of the Green Gas Certification Scheme.

Good Energy

One of the greenest suppliers is Good Energy (quote ref. GE450), a dedicated 100% supplier of renewable electricity, sourced from wind, solar, hydroelectric or sustainable biomass. good energy logo

Good Energy supports a community of over 40,000 independent renewable heat and power generators by paying them for the energy they produce. The company also owns two wind farms and eight operational solar farms, with more in development or planned. For example, Delabole wind farm in Cornwall was built in 1991,and its capacity was more than doubled to over 9 megawatts by the installation of new turbines in 2010-11, at a cost of £11.8 million.