Greenwashing – How Do I Know If My Energy Is Truly Renewable?

While going green is a hot topic for UK businesses looking to do the right thing by our planet, ‘Greenwashing’ – when companies make false claims pertaining to the environmental credentials of their products and services – is becoming more and more common.  Coupled with the fact that 50 percent of energy tariffs now claim to be 100 percent renewable, how can businesses be sure that switching to a renewable energy source actually translates into them only consuming clean energy? In this week’s blog, we aim to shine a light on ‘fake’ green tariffs and how the industry is regulated. 

From Grid to Green

No matter what tariff you are on, every home and business in the UK receives power directly from the national grid, of which approximately 38 percent comes from renewable sources (with coal, gas and nuclear making up the rest). Therefore, there is no direct link between the power consumed at a site and that purchased by the supplier. In order for a supplier to offer a fully green tariff they must purchase enough renewable energy to cover their customer contracts and supply it to the grid, either by generating it themselves or by contracting directly with renewable generators.

The Great Disconnect 

However, this is not the policy or approach followed by all suppliers. Instead, some rely on Renewable Energy Guarantees of Origin (REGO) certificates to label their power green, which doesn’t necessarily ensure all energy supplied is sourced or generated from renewable sources. 

What are REGOs?

REGO stands for Renewable Energy Guarantees of Origin. Ofgem issues REGO certificates to renewable generators, like wind farms, for every MWh of renewable electricity they produce. Each renewable generator is then allowed to sell the renewable power and REGO certificate separately.

What is greenwashing and how do REGOs contribute?

In the energy context, greenwashing is the act of purchasing REGO certificates without the renewable power to which they relate. These certificates can then be combined with power bought from the wholesale market (containing a blend of fossil fuel and renewable energy) to make a supplier appear more green. Put simply, some suppliers will have never purchased a single unit of renewable power, despite labeling their tariffs as green!

For environmentally conscious businesses, ensuring that your energy consumption becomes more sustainable can be a confusing task. We’ve put together some simple tips to help you stay on top of your consumption and ensure you know enough about any renewable energy tariff you choose. 

Step 1: Get a Smart or Advanced Meter installed at your premises – Smart Meters provide a greater insight into your business energy use, more easily enabling you to identify ways to change your energy consumption habits.

Step 2: Consume less energy – wasted energy is wasted money. By consuming less energy, you are helping to ease pressure on the grid whilst saving money at the same time.

Step 3: Switch to a renewable tariff and read the small print – as discussed above, green tariffs can often be misleading so make sure you read the small print and understand where your energy comes from.

Step 4: Ask your supplier this key question – where do they source their power from? Your supplier should be able to tell you whether they purchase their power from the wholesale market or directly from renewable generators. Ask your supplier to explain this to you in simple terms. 

Your supplier should be able to provide you with all the information you need to make an informed decision on their renewable options.