GCC COMMISSIONED REPORT: ‘GREEN' ENERGY SUPPLIERS AND THE CARBON CALCULATOR

 

The short answer, unfortunately, is no. Unless you have your own renewable generation (e.g. solar panels), connecting directly into your building, then your electricity comes from the same national grid as everybody else. 

 

For a more detailed explanation of this, see the Ethical Consumer’s guide to ethical energy suppliers.

 

 

 

Whatever company you buy from, the most important thing to be aware of is that the electricity you use has the same carbon footprint, which is, currently, 0.26 kg CO2e per kWh.

 

If you are on a green tariff and you turn your kettle on, some renewable electricity will be taken (on paper) from the electricity account of someone on a standard tariff and transferred to yours.

 

Then a gas-fired power station will be turned up in order to replace it. In other words, your turning your kettle on causes a gas-fired power station to be turned up the same amount as when anyone else does it.

 

The electricity system is ultimately a shared thing. Most of the decisions about it are being made at the governmental level, and the cost of decarbonising it is being shared between everyone in the country.

 

So while it is good to buy from one of the companies that is making more of an effort to help, the key thing is to keep minimising your energy use, and push for political action.

 

This lines up with official UK Government guidance. According to the guidelines on how organisations should report their carbon footprint (page 48 of this document), the correct method is to use “location-based grid average emission factors to report the emissions from electricity”. In other words, the electricity (or gas) coming into your building has all been mixed together in the national grid and we should use the average carbon footprint of that mix to work out our emissions, regardless of who our supplier is. 

 

In the GCC carbon calculator, we are trying to follow best practice, and so we calculate everyone’s electricity footprint based on their local supply. Although it may seem unfair to pay for a green tariff and then not be able to count it against your carbon footprint, there are good reasons for this guidance, and some benefits too – see below for more details.

 

There are definitely positive reasons to choose a green energy supplier:

 

  • If you don’t choose a reputable renewable supplier, you may be helping to subsidise dirty energy. Most big energy companies still make most of their money from fossil fuels, and even those who offer a “green” tariff (such as E-on, British Gas or Shell) don't ringfence your money for renewables so your bills help them still ship and sell more coal, oil or gas.
  • Some UK renewable suppliers aren’t directly involved in generating any energy, they just buy the right amount of special renewable energy certificates (called REGOs) to match the amount of electricity you buy from them. This allows them to certify your tariff as “green”, but it has little real impact on the energy markets. 
  • However, some renewable companies go the extra mile and actively build new renewable energy generation themselves, or directly support those who do. If you use these suppliers, more of your money is going towards supporting new renewables, which is certainly a good thing.

 

The following list is based on research by Ethical Consumer. Check out their recent guide to ethical energy suppliers for more details on all these companies, and their assessment of the non-renewable suppliers too. (If you’re outside the UK, please let us know of any similar references for energy companies in other countries and we’ll share them here).

 

  • Ecotricity is actively building new renewable capacity in the UK. 20% of the electricity it supplies to customers comes from its own wind turbines and solar panels, the rest fromand it also has some direct power purchasing agreements (PPAs) with other renewable generators. This gives those generators extra financial stability. 

  • Good Energy produces around 10-12% of it's own renewable energy.
  • Green Energy UK doesn't generate anything themselves, but they buy all their electricity through PPAs from renewable generators, directly supporting the renewables industry and community renewable projects.

  • Octopus Energy gets only 10% of its electricity through PPAs with renewable generators. The remaining 90% are just REGO certificates. Octopus Energy is part- owned by an Australian company called Origin Energy, which owns a large number of fossil fuelled power stations.  Co-op Energy gets its electricity from Octopus Energy, so the same applies to their tariffs too.

  • Ripple has a different – and interesting – model. Rather than signing a standard supply contract, they ask customers to directly invest in a new renewable generator (e.g. a wind turbine), as part of an energy co-operative. The more you invest, the larger your ‘share’ in the turbine will be, and the bigger the discount on your bills. Any extra electricity you need (if you didn’t invest enough to cover all your bills from the wind turbine) will be supplied by Co-op Energy, who in turn use Octopus  as their supplier (see above).

  • Bulb and Ovo Energy get part of their supply through PPAs, but most of their renewable tariff is based on REGO certificates. Ovo also supplies SSE Energy.

  • Together Energy don’t own any renewable capacity or have any purchasing agreements with green generators. Their renewable tariff is based 100% on REGO certificates.

  • Shell is a fossil fuel company that buys some REGO certificates.

 

Ethical Consumer classifies three of the above companies as their ‘Best Buys’ for supporting green energy in the UK. These are: Ecotricity, Good Energy and Green Energy UK 

 

Ripple Energy is categorised as ‘recommended.’ It is certainly helping to build new renewables but gets a slightly lower ranking due to its link to Octopus Energy, who are part-owned by a fossil fuel energy company.

 

Some energy companies say they are generating gas from sewage or grass, or offsetting emissions by planting trees. Some of these projects may be positive, others are controversial or unlikely to have much impact. See Ethical Consumer for more information on this. None of them can be accurately measured or verified in terms of their carbon savings, so we don’t count these kinds of measures in our carbon calculator. Overall, we’d recommend choosing a supplier based on their support for renewable electricity, rather those who put foreward these harder-to-prove claims.

 

Supporting an energy company that is genuinely helping to build new renewables is one way we can help reduce our carbon footprints. Increasing the amount of renewables in the electricity grid will bring down the average footprint per KWh, which will feed into our carbon calculator and help all of us reach our carbon targets.

 

1) Buying from a renewable tariff means that the supplier pledges to buy enough renewable energy certificates to match the amount of power it is selling to you. However, all electricity comes to us via the grid - there's no specific cable with 100% clean energy flowing from the green supplier to the customer. No new green power has been ‘switched on’ when you change to a green tariff, all that happens is that some certificates are traded somewhere.

 

2) The point of green tariffs in the UK was supposedly to increase demand for renewables, helping to boost their growth. However, this isn't really happening under the current UK system. In order to call its emissions ‘renewable’, all an energy supplier needs to do is to purchase the correct number of certificates (called REGOs) from someone who owns some renewable energy generators (e.g a wind farm or hydroelectric scheme). There is currently a large surplus of these REGOs in the market – around 37% of the UK's electricity supply is from renewables, while only 3% of UK households are on green tariffs [2]. So buying from a green tariff isn't stimulating the market in a meaningful way.

 

This isn’t just true for the UK – a recent study found that green tariffs were not helping to increase renewable supply in Germany, France or Italy either. 

 

3) Part of the reason for this is that it’s not just our electricity that’s mixed together – our money is too. No matter who our energy supplier is, we’re all helping to support renewables through levies on our energy bills, and via our taxes. Under the current UK system, these funding streams have a vastly bigger impact on the UK’s renewable supply than our choice of energy supplier. New renewable energy developments survive or fail based on a range of factors, but being able to produce REGO certificates doesn’t seem to be one of them [3].

 

4) From an accounting perspective, if we did decide to count green tariff electricity as zero, that would then mean that everyone else's ‘brown’ electricity would need to be counted as slightly dirtier, because we'd have sliced a bit of renewables out of the shared pool. This would be very difficult to calculate and also not really fair, when – as noted above – the levies and taxes that everyone pays on their bills make a far bigger contribution to producing renewable energy than the amount paid to green suppliers.

 

There are benefits to reporting electricity footprints using the grid average:

  • If we counted our electricity footprint as zero, there would be less incentive to increase efficiency and reduce energy use. This is important, because while it is possible to power the needs of the world with renewable energy, the sums only add up if those of us in wealthier countries seriously cut down on the energy we waste (as explained in this book and elsewhere). Reducing our energy footprint also saves us money.
  • The average footprint of many electricity grids is set to dramatically fall over the next 10 years – see, for example, these UK projections, or President Biden’s pledge to make the US electricity supply zero carbon by 2035. This means that using grid electricity will give organisations a ‘free’ decline in emissions over that period, making it easier to meet any carbon targets.

 

 

 

 

May 11, 2021