Decarbonisation Action Plan targets greenwashed energy tariffs

Acknowledging the importance that consumers must be able to trust tariffs marketed as ‘green’ will in fact be just that, Ofgem is succumbing to growing concerns about ‘greenwashing’ and promises to ‘ensure that consumers are not misled’, say some commentators.

The current system for transparency in tariffs marketed as ‘renewable’, means suppliers can buy fossil fuel power, backed by cheap certificates, to claim their tariff is green.

Policy expert, Tom Steward, of renewable energy company, Good Energy, said: “We have never seen a clearer intent from the regulator to crack down on greenwashed energy tariffs. It is brilliant to see Ofgem acknowledge that some suppliers are overstating their environmental impact and that it plans to put a stop to consumers being misled.

“As with much of the programme, how Ofgem intends to achieve this goal will be crucial. The REGO system was originally intended to provide transparency, but left open a loophole for unscrupulous suppliers to exploit. We need a watertight new approach to ensure customers wanting to play a role in tackling climate change can choose a green energy tariff that does what it says on the tin.”

Following the announcement of Ofgem’s Decarbonisation Plan, Patrick Erwin, Northern Powergrid’s policy and market director, commented: “We welcome the clear message that Jonathan Brearley is delivering to the industry on his first day as CEO through the Decarbonisation Plan; it is exactly what’s needed.

“We look forward to working in partnership with Ofgem and stakeholders across our operating area to deliver on this vital agenda. Jonathan’s message chimes with our vision for our future network, set out in our DSO plan, published last year. This sets out how the power grid can underpin decarbonisation and enable the move to net zero.

“Through our current operations and future ED2 business plan, on which we will be consulting extensively this year, we will continue to invest and innovate to create a smarter network that supports decarbonisation, enables economic growth and makes our region more resilient and prosperous.”

Juliet Davenport, CEO and founder, Good Energy, commented on the wider impact of the plan, but raised some concerns: “Ofgem is beginning to make the right noises in this report, but it needs to be much bolder to deliver a zero carbon Britain. 

“To truly protect the customer of the future, we need to protect the planet we live on. The most cost effective way of doing this is by putting British businesses and households at the heart of the solution to the climate emergency, allowing every part of the system to be part of a zero carbon Britain, not excluding the small guys and in the process handing the reins to the incumbents who caused the problems in the first place.

“One really positive step is Ofgem’s acknowledgment of the role of truly green tariffs in doing this. This is the starting block for changing consumer behaviour. We welcome this and encourage government to set a policy and regulatory principle of ‘no backward steps’ on zero carbon.”

The Institution of Gas Engineers & Managers’ (IGEM) chief executive, Neil Atkinson, said: “We cautiously welcome Ofgem’s Decarbonisation Action Plan, which states broadly what everyone else has been saying about the path to net zero emissions by 2050; that in order to successfully tackle UK decarbonisation that we need to have a coordinated response from the gas, electricity and transport industries and all corresponding branches of government.

“However, there are no magic bullets when it comes to the future of heating, power and transport. There will not be a fully electric solution and IGEM agrees with the Committee on Climate Change that reaching net zero will require a mix of solutions for the whole energy system including electricity, low carbon gas and renewables. Hydrogen and other low carbon gases such as biomethane will provide transport solutions and will provide clean, green energy to the home. Heat networks and hybrid heat pump solutions will also play a role in the transition from natural gas to hydrogen.”

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