Ofgem issues guidelines for green energy claims

The Times
February 5, 2009
Robin Pagnamenta

Britain’s energy regulator yesterday called for a crackdown on green energy tariffs, after claims that some suppliers had misled customers about their environmental credentials.
Ofgem called for the creation of an independent accreditation scheme for green tariffs in an effort to “reduce customer confusion and rebuild trust”.
Under Ofgem’s proposed guidelines, tariffs will be considered green only if they bring additional environmental benefits beyond suppliers’ existing legal obligations to generate some of their electricity from renewable sources.
About 319,000 customers in the UK subscribe to green energy tariffs, but the offerings vary widely in quality. Some suppliers offer electricity generated from 100 per cent renewable sources or pledge to invest more than 60 per cent of the proceeds in new wind parks. Others simply repackage their existing generation portfolios, including renewable energy that they are obliged to purchase under UK law.

The “Big Six” energy suppliers and the niche supplier Good Energy have already pledged to sign up to the new guidelines, which Ofgem hopes will be in place by this summer.
The accreditation scheme, which will be overseen by an independent body, will enable householders and small-business customers easily to compare green offerings based on the reduction in carbon emissions.
Juliet Davenport, the chief executive of Good Energy, a niche supplier of 100 per cent renewable electricity, welcomed the announcement made by Ofgem.
Ms Davenport said that a voluntary code was the minimum step that any company should take before offering a “green” energy tariff. She said: “We are pleased to see these guidelines emerge and to be the first independent supplier to have signed up. Good Energy has been calling for more formal guidelines on green supply for several years to allow customers to differentiate between genuine green tariffs and mere ‘greenwash’. We are especially pleased that green claims will be subject to independent scrutiny, giving consumers confidence in what they are signing up to.”