Loopholes mean the energy you’re buying may not be as clean as claimed. New standards are designed to filter the green from the greenwash
Here’s the good news: the UK’s electricity supply is the cleanest on record. A whopping 45% came from renewables in 2024. So, with an abundance of green tariffs to choose from, it should be easier than ever to fuel your home – and your low carbon goals – with clean energy, right?
Well, cool your kilowatts a moment.
While it’s tempting to dream that your renewables tariff pipes power directly from those turbines spinning gracefully on yonder horizon, the reality is vastly different.
The bad news is – with the exclusion of off-gridders – we’re all tapped into the same murky mix of renewables and fossil fuel-generated power. And even when we’re promised the portion we buy is 100% clean, a convoluted accounting system involving brokers and renewables certificates casts the glowing eco credentials of some energy suppliers into shade.
The eco credentials of some energy suppliers might not be what they seem. Image: Watt a Lot
Thankfully, help is at hand. A new set of standards devised by renewable energy experts Good Energy aim to rinse away the greenwash. Much like the ‘scores on the doors’ hygiene ratings at your local takeaway, they tell you just how clean your energy supplier truly is, and help take the guesswork out of buying green.
“We think that when you’re choosing a greener supplier, you should know exactly what you’re buying,” says Good Energy’s head of communications, Ian McKee. “No one seems to be prepared to actually change the rules, so the best we can do is a voluntary system of regulating ourselves.”
At the heart of the problem are the outdated and increasingly controversial certificates known as Regos, or Renewable Energy Guarantees of Origin. For every kilowatt hour of green energy generated, there’s an accompanying Rego. These certificates can be traded separately from energy purchases, meaning an energy supplier can buy fossil fuel-generated power and launder it by snapping up a pristine, clean Rego from a middleman broker.
We think that when you’re choosing a greener supplier, you should know exactly what you’re buying
Moreover, certificates carry a yearly time stamp, whereas energy is bought, sold and priced at wholesale level in half-hourly slots. It means suppliers can buy certificates for solar power generated in the summer, sell you dirty power in the depths of winter, and claim it’s clean.
“It’s not really how the system should work,” says McKee. “When it was brought in, the intention was that the certificate would travel with the power, which is what Good Energy does. When we buy renewable power, we buy it with the certificate.”
In some ways, renewables have become a victim of their own success. McKee points out that 20 years ago, there was so little renewable energy on the market that if your supplier told you that you were buying green, they almost certainly had the accompanying Rego to back up their claim. These days, there’s an abundance, often even a surplus, of renewable energy sloshing around the grid. “That means an abundance of certificates, and an abundance of greenwashing,” says McKee.
A recent survey found that more than a third of people believe energy companies are prime candidates for greenwashing. Image: Jimmy Dean
Research by Good Energy reveals that a growing lack of consumer confidence is a genuine cause for concern. It found 38% of people believe energy companies are prime candidates for greenwashing, while 24% of those on non-green tariffs cite distrust as a reason for not switching. Almost three-quarters want stricter rules.
Meanwhile, Regos is also accused of throttling investment. Analysis by the energy consultancy firm Cornwall Insight values the Rego market at £1bn a year. “Money that could be invested in renewables that instead goes into the hands of middlemen via a third-party market that’s just smoke and mirrors,” says McKee.
Good Energy’s answer is the new Good Green Supply scores, a trio of metrics designed with transparency in mind. ‘True green’ details the percentage of power sourced directly from renewable generators, or from suppliers’ own wind and solar farms. ‘New green’ shows the proportion that comes from renewables new to the grid (a good indicator that suppliers are helping make the grid greener). The third metric, ‘Time-matched green’, shows the amount of renewable energy generated when customers want it, which should stop suppliers laundering dirty winter power with clean, summer solar.
This score system should encourage companies to actually be greener in a genuine way. And then customers trust their suppliers more, which is a good thing for everyone
For now, Good Energy’s score system is a voluntary undertaking. It’s early days, but McKee hopes suppliers will get behind it, perhaps even take it as a cue to clean up their act. “It should encourage them to actually be greener in a genuine way,” he says. “And then customers trust their suppliers more, which is a good thing for everyone.”
Ultimately though, the move is a clarion call for stricter rules, the kind of mandatory regulation that McKee says has been mooted by the energy regulator Ofgem, but which never quite materialises.
Energy expert Joe Kwiatkowski, founder of open-source energy tracking platform Matched, has been banging this drum for a while. Kwiatkowski believes there’s still a place for Regos – or something like them – but not in their current form. In his view, Regos helps to maintain liquidity in the power market, something that’s needed by bigger players like Octopus, which serves millions of customers, in order to trade efficiently.
“I think the jury is still out as to whether it’s the certificate market itself that is fundamentally flawed, or whether it’s just the way certificates are currently being managed,” he says.
Matched is working on its own voluntary disclosure scheme, tracking every major British electricity supplier’s commitment to renewables using publicly available, half-hourly data. Eventually, Kwiatkowski plans to reveal the scores of suppliers who fail to publish them themselves. In the meantime, Good Energy’s initiative is cause for celebration, he suggests.
“Everyone is eager for change,” says Kwiatkowski. “The only way to move forward is to get it all out into the open – have a debate, get this information in front of consumers and let it all shake out for a bit. Then fairly quickly we’d hope to see Ofgem catch up with the situation and start to bring standards into the sector.”
Main image: fizkes
