What are Green Energy tariffs?
“Green” energy comes from renewable sources. Producing power from renewable sources has a lower impact on the environment and creates a smaller carbon footprint, so its referred to as "green" energy. Typically when talking about “green” energy, this is in relation to electricity. Most gas comes from fossil fuels, “green” gas does exist but isn’t widely available. Renewable energy is generated, added to the national grid, mixed with energy from other sources, and finally dsitrbuted to houses and businesses in the UK. End customers have no control of what energy is actually delivered to their home/business.
The opposite of "green" energy is "brown" energy, which is generated by dirty non-renewable sources like coal and natural gas.
Most energy suppliers that claim to supply 100% green energy will use a blended approach where they purchase green energy with REGOs and through PPAs or even have their own renewable energy generation capacity. Suppliers are not obliged to provide data on the proportion of primary vs secondary REGOs so it can be difficult to know if your energy is 100% green.
Where does Green energy come from?
- Solar- panels of reactive material are energised when UV from sunlight hits them – this generates energy
- Wind - Turbines placed on land and at sea harness wind and convert it into power.
- Hydroelectric - Large volumes of water, created by man-made dams, flow through a turbine, generating energy.
- Biomass - Microorganisms break down biological material. One of the by-products of these organisms is combustible gas used to power turbines.
- Wave and Tidal - The technology is still in its infancy, but the plan is to utilise the power of the waves and the cyclical nature of the tide to produce electricity.
What are REGOs?
The Renewable Energy Guarantees Origin scheme, or REGO, is designed to provide customers with transparency about the proportion of electricity that suppliers source from renewable generators.
Ofgem issue 1 REGO certificate for every 1,000 units (1 Megawatt) of energy produced by a renewable generator – which certifies the energy is generated is from a renewable source. When an energy supplier buys energy directly from a renewable generator they also buy the accompanying REGO certificates.
REGO certificates are submitted annually by energy suppliers to Ofgem. If the number of certificates covers the amount of energy sold – they can claim their energy is 100% green.
Are there any problem with REGOs?
REGO certificates can be traded on a secondary market, separately from where the energy is sourced. This means a supplier can purchase brown energy and then REGO certificates separately to make their energy “100% green”. When Shell bought First Utility in March 2019 their fuel mix went from 3% renewable to 100% green energy - by purchasing the necessary REGO certificates. This is considered “greenwashing” and the Energy regulator has vowed to end this.
What are PPA's?
A PPA is a Power Purchasing Agreement. This is when an energy supplier agrees to buy electricity directly from an energy generator.