Buying green electricity

Where does our electricity come from?

The majority of the UK's electricity comes from burning fossil fuels (e.g. coal, oil and gas) which is a major contributor to climate change. Carbon-free sources, including nuclear and renewables, account for around one quarter of total electricity production. Renewable, or 'green' electricity, accounts for just 5.5% at present, but is set to grow over the coming years through policies such as the Renewables Obligation (RO). This requires electricity suppliers to source an increasing proportion of their electricity from renewable sources of power such as wind energy. The Government wants at least 30% of our electricity to come from renewable sources by 2020.

Green electricity offerings

Most energy suppliers offer 'green' electricity tariffs. These seek to support renewable energy. The two main types of offering are green supply tariffs and green funds.

Green supply tariffs

A green supply tariff means that some or all of the electricity you buy is 'matched' by purchases of renewable energy that your energy supplier makes on your behalf. These could come from a variety of renewable energy sources such as a wind farm or hydroelectric power station. Your supplier should let you know what sources are included in the mix, and also what proportion of your supply is renewable. We advise people to look carefully at whether the renewable energy they are purchasing is “additional” i.e. it is above and beyond what suppliers are required to produce under the RO. Many green tariffs state that your supply is renewable but they simply assign some of the renewable energy they are already required to supply to you, whilst reducing the amount of renewable energy they provide to other customers. This does not therefore, increase the amount of renewables in the overall energy mix.

Green funds

A green fund usually involves paying a premium to contribute to a fund that will be used to support new renewable energy developments. The cost of generating electricity from renewable energy sources can be slightly higher. Under this option, the existing electricity supply continues as normal, but your involvement could help to alter the mix of energy sources in future toward renewable sources (depending on the type of tariff).

Green Energy Supply Certification Scheme

In February 2010, Ofgem introduced the Green Energy Supply Certification Scheme. These tariffs have been independently checked, and meet the energy regulator Ofgem’s Green Energy Supply Guidelines. However, whilst these are required to demonstrate real carbon savings, it is important to note that they do not ensure that the electricity you buy is renewable. In order to comply with the scheme, suppliers can invest in additional renewable energy projects (including community renewables) however, they can also use the following methods:

· “Additional activities”. These could include energy efficiency measures such as cavity wall and loft insulation (as long as these are not being claimed for under other schemes which place obligations on electricity suppliers).

· Carbon offsetting so long as it is certified under either DECC’s Quality Assurance Scheme for Carbon Offsetting (QAS) or the Gold Standard for regulated credits. This could include for example the provision of fuel efficient stoves abroad.

Both of these would be required to meet the requirement for a minimum amount of carbon reduction per customer (at least one tonne of CO2).

In particular it is important to be aware that the claim of “matching” the energy you buy with renewable energy does not necessarily mean that you are increasing the amount of renewable energy produced in the UK. The supplier only has to show that they have produced enough renewable energy to be able to supply it to all their customers who have signed up to their Green Tariff. Suppliers would be obliged to supply this through the RO regardless.

This is a voluntary scheme and not all suppliers or tariffs are required to use it. Click to see a list of tariffs currently certified under the scheme.

We advise all customers considering buying a green tariff to look carefully at what suppliers are offering to ensure that it meets their personal definition of “green”. Signing up to one may not actually reduce your carbon footprint or UK carbon emissions.

What to do next:

There are many green offerings on the market,. Some questions you might like to consider before choosing a green offering are:

• Will it cost any more than your current tariff?
• Is it a green supply tariff, a green fund, or another type of offering?
• If relevant, what proportion of your green supply tariff is from renewable sources and how does this compare to the UK average?
• How does this offering deliver additional benefits over and above the supplier's targets under the Renewables Obligation?
• What information is available from the supplier about green tariffs and green funds?
• Have you taken all cost effective measures to reduce your energy usage before signing up to a green tariff? This is the most important and effective way of reducing your carbon emissions and will also lead to lower energy bills. Visit our 'Home improvements and products' section to find out more.

The Energy Saving Trust does not recommend specific suppliers of green tariffs. However, you may find the following websites useful as a guide:

Consumer Focus

Green Electricity Marketplace