Good Energy : New report reveals Big Six dodging renewable energy costs

Good Energy, the 100% renewable power company, is publishing a new report today on greenwashing in the energy market.

The research note provides fresh analysis into the practice of suppliers' bulk-buying cheap renewable certificates from across the EU to 'prove' their tariffs are green.

This option allows the UK's biggest energy suppliers to avoid paying environmental levies which support renewable energy in Britain.

Recent years have seen a surge in suppliers buying second-hand renewable certificates in the UK without buying any renewable power at all. This is harming the shift to clean energy and holding back the fight against climate change.

Good Energy's research has found that some suppliers are very active with this same practice but in other European countries. Last year, the number of European 'Guarantees of Origin' in the UK market reached 57.9 million. This is an increase of 41% from 40.9 million on the previous year.

Six of the 16 suppliers which buy these certificates offer domestic energy tariffs: British Gas, EDF, E.ON, Shell Energy, Npower (now owned by E.On), and Green Network Energy.

These suppliers account for over 50% of domestic customers, meaning millions of households will be on 'green' tariffs impacted by the practice. Collectively, they were able to avoid paying £126 million towards government-mandated renewable energy schemes last year, leaving other companies to pick up the tab. The approach also reduces the environmental benefit of green tariffs offered by these suppliers.

British Gas was the largest user, purchasing 20 million certificates last year. This is twice as much as anyone else and accounted for 35% of the entire market for the past year. This approach allowed British Gas to legitimately avoid paying over £48 million into schemes to support renewables in Britain.

Ben Starling, Good Energy's commercial analyst conducted the analysis. He commented:

'Buying low-cost renewable certificates on the European market is more popular than ever. This route allows big energy suppliers to avoid paying into renewable subsidy schemes at home, which means less investment into clean power. This is a real downside for customers who join green tariffs expecting their bills to go towards green projects in Britain. Our analysis highlights the need for stronger transparency from energy suppliers around how they justify environmental claims.'

This practice will continue despite Brexit fast approaching. Ofgem, the regulator has stated it will allow suppliers to continue to use European GoOs after the transition period ends on 1 January 2021. However, the EU will not allow other member states to buy certificates originating from within Britain.

Notes

1. The full report can be read here.