New guidelines for green tariffs in U.K.


London, U.K. — (METERING.COM) — February 5, 2009 – U.K. energy regulator Ofgem has issued revised guidelines on green electricity tariffs for domestic and small business customers, under which a tariff will only be regarded as green if it brings additional environmental benefits beyond the suppliers’ existing government environmental obligations.

Ofgem says that despite the popularity of green tariffs – around 319,000 customers are currently signed up to green tariffs – research has shown that customers have been confused about what, if any, environmental benefits these offer. Factors include the lack of realization that the electricity they sign up for under a green tariff is any better than that supplied under the standard tariff, and that suppliers already have to meet targets under the Renewables Obligation (RO) and Carbon Emissions Reduction Target (CERT). Ofgem has also been concerned that some suppliers have been doing no more than assigning the electricity they source to meet the RO to green tariffs.

Under the new guidelines suppliers will have to provide to customers a fuel mix disclosure chart displaying the percentage of each energy source used by the supplier, to give the customers an idea of the environmental credentials of the supplier. The supplier also will be required to provide a description of the additional environmental activity that it is undertaking on behalf of the customer to demonstrate a benefit over and above their requirements to meet the RO and CERT. Examples include supporting community-based renewable projects, carbon offsetting, and installing energy efficiency measures. Furthermore, the supplier must provide a quality mark that certifies that environmental activity as part of the green tariff will abate a minimum level of carbon dioxide equivalent emissions. For domestic tariffs the minimum will be equivalent to one tonne of CO2 emissions a year – if the activity is carbon offsetting – or a lower amount for other activities. For small business green tariffs the thresholds will be higher.

Ofgem is also to work with suppliers to set up an accreditation scheme that will be run by an independent body.

The new scheme is expected to be operational by mid-2009 and Ofgem envisages that information on accredited green tariffs will be available online. Suppliers who wish to be accredited will be required to sign up to the guidelines, and only tariffs accredited under the scheme will be regarded as green.

To date the U.K.’s “big six” energy suppliers and Good Energy have signed up to the guidelines.