Green electricity in the United Kingdom

Green electricity in the United Kingdom. There are a number of suppliers offering green electricity in the United Kingdom. In theory these types of tariffs help to lower carbon dioxide emissions by increasing consumer demand for green electricity and encouraging more renewable energy plant to be built. Since Ofgem's 2014 regulations there are now set criteria defining what can be classified as a green source product.[1] As well as holding sufficient guarantee of origin certificates to cover the electricity sold to consumers, suppliers are also required to show additionality by contributing to wider environmental and low carbon funds.

Care needs to be taken in selecting a green energy supplier. A National Consumer Council report in December 2006 concluded that many green tariffs are not delivering the environmental benefits they claim to, and that consumers may not be making the positive contribution they think they are.[2]

Greenpark wind turbine arp
A wind turbine at Greenpark, Reading, England, generating green electricity for approx 1000 homes.

Shades of green

Renewables Obligation

In the United Kingdom, suppliers are legally obliged to purchase a proportion of their electricity from renewable sources under the Renewables Obligation and there is a danger that energy suppliers may sell such green electricity under a premium 'green energy' tariff, rather than sourcing additional green electricity supplies.[3] In addition to selling the green electricity to the consumer, it is also possible for the supplier to sell the associated Renewables Obligation Certificates to another supplier who has failed to meet their quota, rather than 'retiring' the certificate from the marketplace.[4]

On several occasions in May 2016, Britain burned no coal for electricity for the first time since 1882. In April 2018, Britain burned no coal for a period of 76 hours, from 10am 21 April to 10am 24 April – the longest period since the 19th century.[5][6]

Climate Change Levy

Non-domestic consumers can avoid paying the Climate Change Levy by acquiring Levy Exemption Certificates from renewable energy suppliers. Since these are not required by domestic consumers, it is possible for the supplier to sell the certificates to the non-domestic sector, as well as selling the renewables obligation certificate and the electricity.[4]

Carbon offsetting

Prior to the OFGEM green supply regulations, some green energy tariffs involved carbon offsetting, rather than purchasing or investing in renewable energy,[7][8] a practice that does not meet with universal approval. George Monbiot, an English environmentalist and writer, has compared carbon offsets to the practice of purchasing indulgences during the Middle Ages, whereby people believed they could purchase forgiveness for their sins (instead of actually repenting and not sinning anymore). Monbiot also says that carbon offsets are an excuse for business as usual with regard to pollution.[9]

Reporting requirements

In June 2008, Defra announced that, with effect from the financial year 2008/9, Green Electricity is to be treated the same as average grid electricity for carbon dioxide (CO2) reporting purposes. Previously, it was treated as if there were no CO2 emissions associated with it.

Explaining the change, the Minister then responsible (Hilary Benn) said[10] "I want to make sure that the green tariff market, which has grown rapidly over recent years, is clear for consumers and businesses about the precise benefit their tariff brings. Many energy suppliers offer green tariffs to businesses and domestic customers who want to make a contribution to environmental projects or help tackle climate change, but these differ in what they deliver." He added "It is increasingly difficult to demonstrate that buying a renewable electricity tariff is offering additional carbon emissions reductions compared with what suppliers are required to source to meet the Renewables Obligation. I have therefore decided that we will change the voluntary corporate reporting guidelines to bring them into line with current best practice and provide coherent carbon accounting. This will mean that for the reporting year 2008-9, best practice is expected to be for businesses to use a grid average rate – average rate of carbon emissions associated with electricity transmitted on the national grid – unless their supplier can prove the carbon benefits are additional." This does not affect green electricity generated on site (e.g. from photovoltaics or a micro-wind turbine), which can continue to be reported as producing zero emissions.

Certification schemes

In 1999 the Future Energy national certification scheme for green electricity was launched, however it was closed in 2002, apparently because too few suppliers were prepared to accept the proposed revised requirements.[11]

In the absence of a replacement national scheme in the UK, the international Eugene Network, whose main purpose was to give accreditation to national green energy schemes, supported Ecotricity[12] and indicates that Good Energy would be ready for accreditation should a Eugene Standard compliant scheme be introduced in the UK.[13] The Eugene standard was discontinued in February 2009,[14] leaving no internationally recognised means of comparing green electricity.

Ofgem's 2007-8 Proposals

In an attempt to end some of the premium priced offerings by suppliers which were doing no more than repackaging electricity that they had to buy under the Renewables Obligation, the UK Government's Office of Gas and Electricity Markets Ofgem proposed a voluntary scheme for independently verified energy ratings[15] for electricity suppliers. Initially this was intended to include a detailed analysis of the carbon content of the supply, but some critics felt that this lacked sufficient emphasis on additionality, and the actual energy used by consumers from the grid was always a mix of brown and green sources.

After running a series of workshops in early 2008, their proposals turned away from a focus on the source of electricity (and its associated carbon dioxide emissions), to look instead at whether an environmental benefit is demonstrated. Essentially, Ofgem suggest that this can only be done if the supplier invests part of payment received into one of the following activities:[16]

  • installation of energy efficiency technologies (outside of the Carbon Emission Reduction Target - CERT programme);
  • other consumer behaviour measures, such as active demand management or voluntary smart metering;
  • support for renewable heat installations;
  • additional investment in smaller-scale (e.g. community based) renewable electricity projects - a limit of 1MW has been suggested for wind farms - or in other low carbon sources including CHP and nuclear;
  • retirement of EU allowances under the EU Emissions Trading Scheme (EU ETS);
  • purchase of carbon offsets in line with Defra’s Quality Assurance Scheme for Carbon Offsetting, typically offsets from developing countries under the Clean Development Mechanism;
  • research and development into emerging renewable technologies; or
  • contribution to an environmental charity.

The initial draft of the guidelines would have excluded most of the products currently available on the UK market, including offerings from renewable energy specialists Good Energy and Ecotricity.

The Green Energy Supply Certification Scheme

After consultation, Ofgem introduced modified Guidelines in February 2009.[17] These placed a greater emphasis on the matching principle, requiring that all electricity sold under the Scheme had to be matched by supplies from renewable sources (and excluding other low-carbon sources such as CHP or nuclear). The additionality criteria were simplified slightly to comprise:[18]

  • carbon offsets accredited either under the UK Government's Quality Assurance Scheme (QAS) or under the Gold Standard
  • green energy schemes, mainly those that donate money to charities or to trust funds established to invest in new renewable projects – generally at a community level, and required to be independent of the suppliers
  • energy efficiency schemes, making savings above those from CERT including savings in customers' premises through lower energy use
  • unspecified other measures, producing equivalent carbon savings

Certified tariffs were subject to an annual audit, to ensure that the matching and additionality criteria have been met. Consumers must also be given information on the suppliers overall fuel mix at the point of sale. Although aimed mainly at domestic consumers, the scheme can also certify tariffs aimed at small businesses with an annual energy consumption below 50,000kWh.

The Scheme was launched in February 2010, with the UK's Big Six energy suppliers as members as well as Good Energy. Ecotricity elected not to join the scheme citing concerns about the additionality rules.[19] All suppliers offer domestic tariffs, but only some have offered small business tariffs under the scheme.

The Scheme, which closed in 2015, was controlled by an independent Panel chaired by Solitaire Townsend, and the National Energy Foundation were appointed as the secretariat.

Current OFGEM regulation

In response to concerns about the lack of regulation in the market for green electricity tariffs and in order to protect consumers, OFGEM has consulted and enacted changes to the green tariff market in the UK.[1] Whereas previously the green tariff products were not subject to specific regulations, all retailers must now prove the green credentials of their products to OFGEM. The regulations have three components:[20]

  1. Electricity source - retailers need to hold sufficient Renewable Energy Guarantee of Origin Certificates to match the quantity of electricity sold. Retailers are required to submit proof of this to the regulator.
  2. Additionality - retailers also need to invest additional funds into other environmental projects.
  3. Transparency - retailers are required to inform consumers of how their tariffs benefit the environment.

Areas of controversy

There have been several areas of controversy regarding green electricity sales in the UK. These have been related to both the concept as a whole, which has been subject to criticism, but have usually manifested as disputes between the two leading green electricity companies.

Retirement of Renewable Obligation Certificates (ROCs)

In 2009 the founder of Ecotricity, Dale Vince, criticised Good Energy for their failure to retire a sufficient quantity of ROCs.[21][22] Good Energy had previously promised to retire 5% of its ROCs, but Vince claimed they had consistently retired fewer ROCs than promised. He backed this up with evidence from OFGEM. It appears that after this dispute Good Energy did increase the number of ROCs it retired, but now seems to have ceased to do this entirely.

Advertising Standards Authority Case

In 2016 Ecotricity claimed in an advertisement that it was the greenest energy supplier. This claim was disputed by Tesla Motors and subsequently thrown out.[23] The judgement faced criticism from Good Energy, with its managing director David Brooks saying “The ASA appears to have based its decision purely on data provided by Ecotricity without considering whether that data represents an objective view. Obviously, the criteria Ecotricity has chosen to measure itself against other companies has been selected to suit Ecotricity. We don’t think the ASA has considered what it calls “suitable comparative data” before reaching its conclusions." [24]

Worsening greenhouse gas emissions

In the UK, wood counts as a renewable fuel and the Drax power station burns a large mass of it. Biofuelwatch has criticized this wood burning, saying "In return for trashing forests and digging up communities, Drax is receiving massive subsidies, when it should have been closed down years ago".[25][26][27]

Suppliers currently offering green source products

See also

References

  1. ^ a b "Ofgem proposes improvements to green tariffs to improve protection for consumers". www.ofgem.gov.uk. Retrieved 2016-07-21.
  2. ^ "Reality or rhetoric? Green tariffs for domestic consumers" (PDF). The National Consumer Council. December 2006. Archived from the original (PDF) on 2007-10-03.
  3. ^ Green Electricity... Are you being conned? Archived 2007-06-29 at the Wayback Machine The Ecologist, published 2005-06-01, accessed 2007-06-07
  4. ^ a b Why Friends of the Earth no longer produces a green electricity tariff league table, Friends of the Earth, published July 2005, accessed 2007-06-13
  5. ^ "Britain passes historic milestone with first days of coal-free power". Financial Times. Retrieved 19 June 2016.
  6. ^ "Britain gets no power from coal for 'first time on record'". The Telegraph. 10 May 2016. Retrieved 19 June 2016.
  7. ^ "Reality or rhetoric? Green tariffs for domestic consumers" (PDF). The National Consumer Council, UK. December 2006. Archived from the original (PDF) on 2007-03-31.
  8. ^ GRÁINNE GILMORE (January 6, 2007). "Grey areas with green energy". London: The Times.
  9. ^ "The trade in carbon offsets is an excuse for business as usual" by George Monbiot, The Guardian, October 18, 2006. A reprint of the article may be accessed at on Monbiot's website. Also see "Carbon Offset Business Takes Root" by Martin Kaste, NPR, 28 November 2006.
  10. ^ Defra Press Release: Green Tariffs: Check what yours delivers 16 June 2008
  11. ^ Consumers left in the dark over green electricity, Friends of the Earth, published 2002-11-06, accessed 2007-06-08
  12. ^ Ecotricity - committed to new renewable energy Eugene, accessed 2007-06-07
  13. ^ Case Study: UK market lacks information Eugene, accessed 2007-06-07
  14. ^ Eugene Standard - Letter from Board about dismantling Archived 2011-07-19 at the Wayback Machine, Eugene, accessed 2010-02-26
  15. ^ New energy ratings to help cut through green customer confusion (press release), accessed 2007-11-07
  16. ^ http://www.ofgem.gov.uk/Sustainability/Environmnt/Policy/Documents1/Green%20supply%20guidelines%20-%20proposals%20July%2008.pdf Ofgem: Green supply guidelines - proposals July 2008
  17. ^ Final Green Supply Guidelines, Open letter dated 4 February 2009
  18. ^ Green Energy Supply Certification Scheme website accessed 16 December 2010
  19. ^ Ecotricity Press Release, 'New green energy guidelines from Ofgem are feel good but not do good says Ecotricity'
  20. ^ "Protecting consumers in the green and renewable offers market - final proposals" (PDF). OFGEM.
  21. ^ BusinessGreen.com, From; Network, part of the Guardian Environment (2009-05-14). "Good Energy accused of misleading green tariff customers". the Guardian. Retrieved 2016-07-21.
  22. ^ "Utility Week – Good Energy and Ecotricity clash over green claims". utilityweek.co.uk. Retrieved 2016-07-21.
  23. ^ "ASA Ruling on Ecotricity Group Ltd - Advertising Standards Authority". www.asa.org.uk. Retrieved 2016-07-21.
  24. ^ "Good Energy and Ecotricity in new row over who's greenest". 2016-04-07. Retrieved 2016-07-21.
  25. ^ http://www.biofuelwatch.org.uk/axedrax-campaign/
  26. ^ Eisenstein, Charles. "The campaign against Drax aims to reveal the perverse effects of biofuels". The Guardian.
  27. ^ "'Wood-pellet fuel emits more carbon than coal': U.S. watchdog to probe shock claims on power giant Drax's 'green' supplier". This Is Money. 12 March 2016.

External links

News

EDF Energy

EDF Energy is an integrated energy company in the United Kingdom, with operations spanning electricity generation and the sale of gas and electricity to homes and businesses throughout the United Kingdom. It employs 13,331 people, and handles 5.7 million customer accounts.

Ecotricity

Ecotricity is an energy company based in Stroud, Gloucestershire, England specialising in selling green energy to consumers that it primarily generates from its 87.2 megawatt wind power portfolio – the company prefers the term windmill rather than wind turbine. It is built on the principle of heavily reinvesting its profit in building more of its own green energy generation.

Energia Group

Viridian Group plc is an Irish energy company with interests across the island of Ireland. Viridian organises itself into two main groups: Power NI and Energia.

Future Energy

Future Energy is a former accreditation scheme for green electricity in the United Kingdom, designed to support and stimulate electricity generation from renewable energy sources. The scheme was launched in 1999 and was operated by the Energy Saving Trust until funding expired in 2002.It is thought that funding was not renewed due to few suppliers were prepared to accept the new requirements for green tariffs proposed by the Trust following the introduction of the Renewables Obligation. As of 2007 the scheme has not been replaced, although Friends of the Earth, who used to run their own scheme, have been among those calling on the government to do so.

Good Energy

Good Energy Group PLC is a British energy company based in Chippenham, Wiltshire that generates and purchases renewable electricity, and supplies electricity and gas to homes and businesses throughout the UK. Its CEO is Juliet Davenport.

HomeSun Ltd

HomeSun led the transformation in the UK of solar for homes with the launch of Free Solar in 2010 using the Feed-in Tariff (FITs) subsidy. Working with government-led subsidies, HomeSun now offers free cavity wall insulation. The company's particular focus within the category is residential blocks of flats of three storeys and above.

Hydroelectricity in the United Kingdom

As of 2012, hydroelectric power stations in the United Kingdom accounted for 1.65 GW of installed electrical generating capacity, being 1.8% of the UK's total generating capacity and 18% of UK's renewable energy generating capacity. This includes four conventional hydroelectric power stations and run-of-river schemes for which annual electricity production is approximately 5,000 GWh, being about 1.3% of the UK's total electricity production. There are also pumped-storage hydroelectric power stations providing a further 2.8 GW of installed electrical generating capacity, and contributing up to 4,075 GWh of peak demand electricity annually.The potential for further practical and viable hydroelectricity power stations in the UK is estimated to be in the region of 146 to 248 MW for England and Wales, and up to 2,593 MW for Scotland.

However, by the nature of the remote and rugged geographic locations of some of these potential sites, in national parks or other areas of outstanding natural beauty, it is likely that environmental concerns would mean that many of them would be deemed unsuitable, or could not be developed to their full theoretical potential.

Interest in hydropower in the UK has been renewed in recent years due to new UK and EU targets for reductions in carbon emissions and the promotion of renewable energy power generation through commercial incentives such as the Renewable Obligation Certificate scheme (ROCs) and feed-in tariffs (FITs). Before such schemes, studies to assess the available hydro resources in the UK had discounted a large number of sites for reasons of poor economic or technological viability, but more recent studies in 2008 and 2010 by the British Hydro Association (BHA) identified a larger number of viable sites, due to improvements in the available technology and the economics of ROCs and FITSsSchemes up to 50 kW are eligible for FITs, and schemes over 5 MW are eligible for ROCs. Schemes between 50 kW and 5 MW can choose between either. The UK Government's National Renewable Energy Action Plan of July 2010 envisaged between 40 and 50 MW of new hydropower schemes being installed annually up to 2020. The most recent feedback for new hydro schemes is for 2009, and only about 15 MW of new hydropower was installed during that year.

List of electricity sectors

This is a list of electric power industry sectors in every country or region around the world.

Northern Ireland Electricity

Northern Ireland Electricity Networks Limited (NIE Networks) is the electricity asset owner of the transmission and distribution infrastructure in Northern Ireland. NIE Networks does not generate or supply electricity. NIE Networks is a subsidiary of ESB Group.

NIE Networks has three transmission interconnectors with the transmission grid in the Republic of Ireland. The main interconnector was built in 1970 between Tandragee and Louth but "the Troubles" saw the interconnector destroyed in 1975 and left in that state for twenty years until repair.NIE Networks should not be confused with Power NI, its own former supply business, which was not part of the sale to the ESB and remains owned by Viridian. NIE Energy changed its name to Power NI on 25 July 2011, as ESB retained the NIE name in Northern Ireland.

Npower (United Kingdom)

Npower Limited (trading as npower) is an electricity generator and supplier of gas and electricity to homes and businesses which is based in the United Kingdom, formerly known as Innogy plc. As Innogy plc it was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index.

In March 2002, it was acquired by RWE of Germany, and was subsequently renamed RWE npower plc. RWE split off its renewable energy, network and retail divisions as Innogy SE in April 2016, and Npower transferred to the new business. It is considered as one of the Big Six energy suppliers, which dominate the gas and electricity market in the United Kingdom.

The Npower is different from the Nigeria Npower programme, which is a scheme by the federal government of Nigeria to alleviate poverty by employing and training Nigerian youth in skill acquisitions in different areas.

Outline of the United Kingdom

The following outline is provided as an overview of and topical guide to the United Kingdom of Great Britain and Northern Ireland; a sovereign state in Europe, commonly known as the United Kingdom (UK), or Britain. Lying off the north-western coast of the European mainland, it includes the island of Great Britain—a term also applied loosely to refer to the whole country—the north-eastern part of the island of Ireland and many smaller islands

Premier Power

Premier Power Limited is an electricity supply company in Northern Ireland.

The company was formed in 1992 following the privatization of electricity supply in Northern Ireland. Previously, Northern Ireland Electricity was responsible for the running of the country's power stations and transmission. British Gas (now BG Group) bought Ballylumford power station from NIE and formed Premier Power to run it.

On 12 August 2010 the AES Corporation announced that its subsidiary, AES Ballylumford Holdings Limited, had acquired Premier Power through an all-cash transaction for £102 million (approximately $160 million), which included purchase price and working capital adjustment. The transaction was announced on 2 July 2010, and was subject to licence consents from the Northern Ireland Authority for Utility Regulation and the Northern Ireland Department of Enterprise, Trade and Investment.Through the Ballylumford facility, Premier Power generates 50% of Northern Ireland's electricity and 17% of all Ireland's.

REG WindPower

REG WindPower is a renewable energy company, in the United Kingdom.

REG Windpower is one of the UK’s leading developers and operators of small to medium-sized wind farms, operating nine sites in England and one in Wales, with a combined operational capacity of 41.15 MW.The ultimate parent company Renewable Energy Generation Limited, registered in Jersey, was put into liquidation in January 2016.

SSE plc

SSE plc (formerly Scottish and Southern Energy plc) is an energy company headquartered in Perth, Scotland. It is listed on the London Stock Exchange, and is a constituent of the FTSE 100 Index. SSE operates in the United Kingdom and Ireland.

It is involved in the generation and supply of electricity and gas, the operation of gas and telecoms networks and other energy related services such as gas storage, exploration and production, contracting, connections and metering. SSE is considered as one of the "Big Six" companies which dominate the energy market in the United Kingdom.

Scottish Power

Scottish Power is a vertically integrated energy company based in Glasgow, Scotland. It is a subsidiary of Spanish utility Iberdrola.

ScottishPower is the distribution network operator for central and southern Scotland, Merseyside, North Wales and parts of Cheshire and Shropshire. It is also the Transmission Owner for the south of Scotland. The company also supplies electricity and gas to homes and businesses around the United Kingdom and generates power for supply to the grid. It owned PPM Energy in the United States which has now been folded into Avangrid.

Solar power in the United Kingdom

Solar power represented a very small part of electricity production in the United Kingdom (UK) until the 2010s when it increased rapidly; because for most of that decade new installations were subsidized with a feed-in tariff (FIT), and also because of the falling cost of photovoltaic (PV) panels.

As of 2019 installed capacity was over 13GW, with the 72MW(DC) Shotwick Solar Farm being the largest in the UK, however peak generation was less than 10GW. As panels have a capacity factor of around 10% in the UK climate, average annual generation is roughly the installed capacity multiplied by 1000 hours, being slightly under 13 TWh in 2018, somewhat under 5% of UK electricity consumption.

Wind power in the United Kingdom

The United Kingdom is one of the best locations for wind power in the world and is considered to be the best in Europe. Wind power contributed 18% of UK electricity generation in 2018. Onshore wind power has the lowest levelised cost per MWh of electricity generation technologies in the United Kingdom when a carbon cost is applied to generating technologies. In 2016, wind power first surpassed coal in UK electricity generation, and in the first quarter of 2018 surpassed nuclear power generation for the first time.

Wind power delivers a growing percentage of the electricity of the United Kingdom and by the end of July 2019, it consisted of 9,929 wind turbines with a total installed capacity of over 21.5 gigawatts: 13,062 megawatts of onshore capacity and 8,483 megawatts of offshore capacity.

This placed the United Kingdom at this time as the world's sixth largest producer of wind power. As of 2012, polling of public opinion consistently shows strong support for wind power in the UK, with nearly three quarters of the population agreeing with its use, even for people living near onshore wind turbines.Through the Renewables Obligation, British electricity suppliers are now required by law to provide a proportion of their sales from renewable sources such as wind power or pay a penalty fee. The supplier then receives a Renewables Obligation Certificate (ROC) for each MW·h of electricity they have purchased. Within the United Kingdom wind power is the largest source of renewable electricity and the second largest source of renewable energy after biomass.Overall, wind power has raised costs of electricity slightly. In 2015, it was estimated that the use of wind power in the UK had added £18 to the average yearly electricity bill. This was the additional cost to consumers of using wind to generate about 9.3% of the annual total (see table below) – about £2 for each 1%. Offshore wind power has been significantly more expensive than onshore, which raised costs.

Offshore wind projects completed in 2012–14 had a levelised cost of electricity of £131/MWh compared to a wholesale price of £40–50/MWh. In 2017 the Financial Times reported that new offshore wind costs had fallen by nearly a third over four years, to an average of £97/MWh, meeting the government's £100/MWh target four years early. Later in 2017 two offshore wind farm bids were made at a cost of £57.50/MWh for construction by 2022–23, nearly half the cost of a recent new nuclear power contract.

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