Power companies are paying as little as 93p a customer for the right to claim that dirty energy tariffs are actually green.
There are 111 energy tariffs now classed as renewable out of 282 on the market, 39 per cent of the total, and the cost of these deals is falling. But a Sunday Times investigation has found huge confusion over what renewable really means because suppliers can “greenwash” fossil fuel energy by buying certificates.
No matter what tariff you are on, every household in the country gets exactly the same energy from the National Grid. So even if you have signed up for a 100 per cent green energy supplier, what you get is 40.6 per cent gas, 2.1 per cent coal and 17.3 per cent nuclear. Just 37.1 per cent comes from renewables, which includes wind, solar and bioenergy.
Green energy companies can claim their credentials by either generating their own renewable power (such as wind or solar), buying it directly from other companies that generate it, planting trees, or by buying Renewable Energy Guarantees of Origin (Rego) certificates issued by green energy plants such as wind farms and hydroelectric power stations.
A green certificate can be very cheap. Cornwall Insight, the energy analytics company, found that Rego certificates could be bought by suppliers from renewable energy generators for as little as 30p per megawatt-hour (MWh) of electricity consumed. The average household uses 3.1 MWh of electricity per year, so on average it costs suppliers just 93p to claim that a year’s energy use is green.