Opinions
Once we were offered an easy way to help save the planet: ask an electricity provider to supply you with power from renewable sources and you would reduce carbon emissions and so tackle climate change. But doing the right thing has turned out to be more complicated.
There are growing concerns that 'green tariffs' reduce carbon emissions by far less than promised - a point accepted even by government. Supporters still argue they are worthwhile because they boost demand for renewable energy in future. But even that is now being questioned: demand is already massively outstripping supply, leading providers to turn away big customers.
In all this confusion, environmental campaign groups are withdrawing support for green tariffs, and there are two different plans to regulate the industry. In the meantime, a growing number of people are asking: is it worth switching? The answer is far from simple.
The potential of domestic renewable energy is clear: between a quarter and a third of Britain's carbon emissions come from homes, of which just over one quarter are accounted for by electricity. On average, just over one third of this electricity is generated by burning coal, another third by gas, one fifth comes from nuclear stations, one twentieth from renewable sources, and the remainder from 'others', including oil.
With concern about climate change rising, an estimated 200,000 of Britain's 23 million households have a green electricity tariff. Polls have found nearly two-thirds of people would be interested in having one. Most such tariffs offer 100 per cent 'clean energy' from renewable sources. Some offer to invest in renewables or to offset emissions from 'dirty' energy by putting money into projects to reduce carbon emissions elsewhere.
But, surveying 12 tariffs offered by nine companies in 2006, the National Consumer Council (NCC) found many were not delivering the environmental benefits they claimed. Worryingly, even the better tariffs 'only reduce CO2 emissions by around 100kg a year - just 6 per cent of the average household's CO2 emissions', the NCC said. Since then, Ofgem, the energy regulator, and the government's Energy Saving Trust have launched consultations into accreditation schemes to reassure customers.
Critics' primary concern is whether the clean energy being paid for is really 'additional' - that is, more than companies are supposed to supply by law anyway. Under the Renewables Obligation (RO), introduced in 2002, electricity companies must supply a rising proportion of the energy they sell from renewable sources, or pay to 'buy out' their obligation. This year the RO is 7.9 per cent - a level clearly not met overall because only 4 to 5 per cent of all supply is currently from renewables. Not surprisingly, many providers offering green tariffs did not meet their minimum obligation. Concern is heightened by the fact that suppliers can already charge every household £10 a year to help meet the costs of the RO - a figure set to rise to £20 by 2015 - meaning customers potentially pay twice for it.
A further problem is that companies can sell spare renewable obligation certificates (ROCs) to rivals that need to buy out their obligations. Just two suppliers surveyed by the NCC 'retired' (in effect, tore up) some of their spare certificates but even they could not afford to do that with the majority of certificates; the NCC calculated that to retire all ROCs would add £200 a year to a household bill.
These problems are recognised by the Department for Environment, Food and Rural Affairs, which advises people with green tariffs that 'the renewable energy you are using has already been accounted for in the UK energy mix' and gives even supposedly 100 per cent-renewable tariffs a carbon rating. Defra does, however, urge people to sign up for such tariffs because they increase demand for clean energy - an argument also put forward by campaigners, who like the idea of green tariffs but are troubled by their complexity.
This argument does not seem to stack up either, though, because demand already far exceeds supply. While only a few households are on green tariffs, British businesses pay a 'climate change levy' of 0.43p for every kilowatt hour of electricity - except on renewable energy, which is exempt. This tax, and rising consumer pressure, mean big businesses have rushed to buy renewable supplies - overwhelming the less than 5 per cent of power available from these sources.
Electricity suppliers, though, defend their eco-tariffs. Eon, a big supplier with a green tariff that does not, overall, meet its RO minimum, argues that if enough customers sign up to its tariff, it would push the company to exceed the minimum. Good Energy, the only UK supplier to offer 100 per cent renewable energy, agrees buying green does push up demand. That this is not yet resulting in an increase in supply is the fault of other policies, particularly planning constraints, it says.
Meanwhile, many campaigners are reserving judgment - afraid to deter consumers from doing something to help, but worried that if green tariffs are seen as a sham there could be a backlash.
'It certainly shouldn't be one of the first things people do,' says Keith Allott, head of climate change for WWF. 'If you have only time to do two or three things, I'd improve the energy efficiency of your home, think seriously about personal transport and how frequently you fly.'
Some believe the premium charged for green power will be overtaken as the cost of coal and oil drives the price of 'conventional' electricity above the current level of eco-tariffs. But Doug Stewart of supplier Green Energy thinks renewables customers are not safe from rising fossil-fuel prices yet: 'If old "brown" energy rises and green energy stays where it is, the market will pile into green energy until the price equalises.' The turning point will come, he says, when there is enough green energy to satisfy demand - then, oil's influence over the price of electricity will start to diminish.
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