What is green electricity and how to avoid greenwashing
Green electricity is generated from renewable energy resources such as solar, wind, hydro, tidal, biomass and geothermal energy (geothermal has minimal usage in the UK in comparison to other countries such as Iceland). Because it can be constantly replenished it’s much more environmentally friendly than fossil fuels such as coal and gas.
One of the biggest and most cost-effective sustainability improvements you can make as a business is to switch to a green electricity contract. However, the green marketplace can be confusing. Green energy comes in a number of different shades of green. So to help make sure you can make the best choice for your business we’ll aim to demystify the different products available to you.
How is electricity deemed ‘green’?
In the UK resources that make renewable electricity such as solar panels and wind farms are awarded a certificate by Ofgem called Renewable Guarantee of Origin (REGO). The EU has an equivalent scheme called Guarantee of Origin (GoO) certificates.
Energy suppliers in the UK can buy REGOs or GoOs from someone who generates renewable electricity such as a wind farm owner, to match the amount of electricity supplied to a single large customer, a group of customers or to all of the energy company’s customers.
Pure green
Pure green electricity is a sustainable energy source with zero carbon emissions. To qualify as being pure green, the energy supplier must buy both the REGOs or GoOs and the actual energy generated from the same renewable generation source such as solar or wind farms.
There is generally a premium paid for the purchase of green energy generated, as this will allow the generator to further invest in more renewables, whereas just buying a certificate does not raise enough funds to justify further development.
Nuclear
Nuclear energy is made by splitting uranium atoms, this creates heat to produce steam, the steam passes through turbines to generate electricity. As nuclear power plants don’t burn fuel, it’s considered zero carbon. However, nuclear doesn’t receive REGO or GoO certificates as it’s not a renewable energy source.
What is greenwashing in electricity?
Each REGO or GoO certificate accounts for a set number of units of renewable electricity. Ofgem, for example supply one green certificate for every 1,000 units of renewable energy generated. Currently there’s nothing to prevent an energy supplier from buying a REGO or GoO from the renewable energy provider, but then buying the actual energy from the wholesale electricity market (which can be made up of gas, coal, gas and renewables) and then selling this onto customers as green electricity. This is technically allowed by both Ofgem and the GHG protocol and it allows businesses to claim zero carbon emissions — even though the energy they’ve purchased isn’t actually green.
Why does greenwashing happen?
Consumer demand for green energy is growing, a fact that is recognised by energy suppliers. Suppliers want to entice new customers but do so in a way that is most cost effective to their business. Buying REGO and GoO certificates exploits the loophole in the system so that they can present themselves as green without the extra cost of investing in and paying the premium associated with pure green energy.
How can I avoid greenwashing?
At Zellar, we make it easy to understand your emissions and switch to a green supplier. Unless the energy supplier buys both the REGOs and the actual electricity from the same place your energy will not be considered as green and your emissions will be calculated as the same as the grid average.
Zellar is always here to help you understand your emissions and switch to a greener supplier when your energy contract is up for renewal.