Why I do not buy energy on a green tariff

Why don’t I buy energy on a green tariff? 350,000 people have signed up to buy energy on a green tariff from one of the six major domestic energy suppliers in the United Kingdom. I am not one of them. I was never convinced by something that calls itself a “green” tariff. The phrase is actually meaningless. What does “green” mean when applied to electricity and gas supplies? Most people would think that ”green” means energy generated by sustainable renewable means – such as wind power, photovoltaics or possibly even by biomass (although I do not classify biomass as “green”). Notice that there are words that I have used which could be used by the energy suppliers to describe their energy tariff, but instead they have opted for the vaguer, almost mysterious word “green”.

Well, in the context of an electricity tariff “green” must mean something. I think it is intended to give the impression that the energy supplied on these green tariffs is somehow connected to the green movement, more environmentally friendly than the old “ungreen” tariff that you might have previously signed up to. That is just an impression, no more. In “Through the Looking Glass” Humpty Dumpty told Alice that words mean exactly what he wants them to mean, and so it is with the energy suppliers and green tariffs.

In 2002 Ofgem, that stout protector of energy consumers promulgated a voluntary “green tariff” code, which was also a little Humpty Dumpty. Even then, not all the energy companies signed up to it. Highly protective of consumer interests Ofgem has proposed a new Code and all energy suppliers wanting to sell a “green” tariff must sign up to the new code or else Ofgem would enforce it. It is of course interesting that Ofgem has allowed consumers to be confused and misled about “green” tariffs for six years, to that extent that 350,000 people have signed up.

That seems to indicate to me that the regulator does not do all the regulation that it should be doing to protect the public; after all this is a rather simple point and does not take years to formulate a code and force energy companies to sign up to the code or else lose the right to describe a product as green.

The new Code, not yet beyond the design stage, proposes an independent accreditation scheme, with gold silver and bronze levels, presumably because Ofgem thinks consumers too stupid to differentiate without a colour scheme and because Ofgem wants to permit the energy companies to sell different shades of green tariffs.

The new guidelines (they will not be regulations will require that the tariff delivers both environmental benefits and transparency. This, Ofgem hopes, will stop the energy companies from simply repackaging things that they are forced to do by legislation in any event and getting an extra slice of cream by calling them green. In other words there has to be “additionality”.

That is quite astounding; an energy company selling a green tariff as such without additionality would be coming very close to defrauding its customers. It is a scheme that I would not offer to consumers because I think it is over the line between marketing and illegality. Nevertheless, Ofgem does not agree with me because they have permitted this “green” tariff for six years.

Ofgem hopes that transparency will enable the consumers to understand the differences and benefits of the different green tariffs on offer. The very small energy suppliers can do this, but the larger ones cannot. It cannot be shortage of resources that prevents them from doing so.

I often disagree with the Energy Savings Trust but I see that its Chief Executive, Philip Selwood is rather scathing about Ofgem’s proposals. “If Ofgem’s guidelines progress as proposed then green tariffs cannot make a meaningful contribution towards increased renewable energy supply in the UK. What the public needs is clear and simple information so that they can make informed choices about the energy they use.  They’ll end up being misled and buy something which will not have a direct impact on their carbon emissions.  Welcome to Greenwash.”

The Energy Savings Trust finds “green” tariffs misleading, unproductive of increasing the supply of energy from a renewable source, without transparency when it comes to advising consumers on the fuel mix of the energy they buy, and uncertified.

So now you know why I do not buy energy on a green tariff from one of the major energy suppliers. I guess that Mr Selwood does not buy it either.

I recommend that no one does, even after the Ofgem code is actually published. You may have thought that buying electricity on a green tariff would help towards building those wind turbines that you know are environmentally sound. You may have had good feelings about paying that little bit more for something more environmentally friendly. I am sorry if I have disillusioned you but green tariffs are simply a way to get a bit more out of your wallet without providing any significant extra for it.

You would be doing far more good if you closed your green tariff and donated the difference to an environmental charity, rather than donating the money to one of the big six energy suppliers. Their profits are quite large enough without that extra from a green tariff.