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BFF Blog
'Green tariff' confusion
Thu 21 Aug 2008
Moves by Defra and regulator Ofgem to more closely define ‘green tariff’ electricity risk adding confusion to the marketplace. Both organisations are motivated by the understandable desire to avoid ‘double counting’ carbon savings from existing and planned renewable supplies (so called ‘additionality’). The basic premise is that the proportion of renewables in the supply mix is determined by Government policy (primarily the Renewables Obligation) and not by customer demand. So the argument goes that any ‘green’ tariff label is misleading and cannot be directly linked to new renewable generating capacity.
However, this approach is not without its critics – notably the outspoken head of Ecotricity who rightly points out that not all electricity suppliers are equal. Some invest considerably more in new renewable generating capacity than others and are therefore doing more than their fair share to ensure that Government’s challenging renewable targets are met. From the users’ perspective, having the ability to confidently select a lower carbon supplier empowers them to actively reduce the footprint of their consumption. BFF would argue that at sufficiently high levels, user demand for lower carbon tariffs would stimulate demand for the construction of more renewable electricity projects.
Having worked with Defra and several utility companies, including Ecotricity, BFF’s view is that some account does need to be taken of the contribution to carbon savings by suppliers and users. A good starting point is electricityinfo – a website which provides data on the carbon intensity of electricity by supplier. BFF uses these figures to inform clients about different suppliers and, interestingly enough, the data for the site is sourced from Ofgem and Defra’s sister department BERR!
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