Green Tariffs - all you need to know
- Tuesday, September 3, 2024
- Posted By The Growth Company
By GC's Sustainability Team
The Growth Company is committed to helping our colleagues to reduce their carbon footprint at home. Results from our recent Travel and Homeworking Survey found that 36% of GC colleagues did not have a green tariff for their home energy use.
This is one of the ways you can reduce your carbon footprint without having to make any changes at home, and it doesn’t have to cost more than your current contract.
This information pack provides a light-touch overview of green tariffs, their benefits, available options, and helpful resources to assist you in making an informed decision.
Green or renewable energy is derived from natural resources. These are abundant and continuously replenished, making them renewable energy sources. Renewable energy emits little to no greenhouse gases or pollutants when compared to the burning of fossil fuels such as gas and oil. Typical renewable energy sources in the UK include wind, sun, water, waste, and heat.
Green energy tariffs are electricity tariffs ‘backed’ by renewable power. This, however, does not mean that the energy used in your kettle or toaster has come from a wind or solar source.
All energy in the UK comes from the national grid – a mixing pot for all energy sources, including fossil fuel and nuclear, alongside renewable. Today, over half (52.4%) of Britain’s electricity is generated by wind, solar or hydro! Therefore, regardless of which tariff you’re on, at least some renewable energy is part of the mix.
Check out The National Grid Live to see the live National Grid mix in the UK, highlighting the fossil fuel to renewables split.
Green tariffs are energy contracts where your energy supplier has committed to sourcing and purchasing electricity from renewable energy sources, thus supporting the generation of renewable energy, and helping reduce carbon emissions associated with traditional, non-renewable energy sources. When switching to a green tariff, you pay to invest in green energy and help reduce the carbon intensity of the electricity grid and gas supplies, helping drive the decarbonisation and Net Zero journey forward.
Some energy suppliers sell ‘Renewable Tariffs’. This means they have purchased Renewable Energy Guarantees of Origin (REGOs) or Renewable Obligation Certificates (ROCs). These certificates are used to evidence that energy purchased by your supplier is from a renewable energy supply. Alternatively, they may invest in renewables, by building things such as solar farms and wind turbines themselves, or having contracts directly with renewable suppliers such as Power Purchase Agreements (PPAs). A mixed approach is often the most frequent scenario, generating some renewable power alongside purchasing it from renewable generators. Both kinds of tariff count as ‘green’ or ‘renewable’ under UK law.
Both certificates are run and issued by Ofgem: ROCs are a form of subsidy featuring higher or lower ROC banding depending on the energy generation technology type and how old it is, whereas REGOs
are assigned to every unit of renewable energy. Dark green REGOs, which are those from hydro, wind and solar assets are typically more valuable than those from Anaerobic Digesters, Biomass and Landfill gas.
Ofgem issues a REGO for every unit of renewable electricity generated. The renewable energy generator is, however, allowed to sell the REGO certificate and the electricity separately. This means suppliers might claim to offer a ‘100% renewable’ tariff, but the energy they provide could be no different from the general mix on the grid.
REGOs can be bought, sold, and traded like a commodity, leading to varying prices. Therefore, REGOs may not signify that electricity supplied came from a renewable source. Their cost nowadays is very low, enabling suppliers to buy enough REGOs for a year’s supply to a typical house for just a few pounds.
Some industry experts believe REGOs play a key role in supporting the renewable energy market and decarbonisation. Additionally, REGOs can be used to cover the cost of research & development, and wider green energy investment.
When looking to switch to a green tariff, get in touch with your energy provider to learn more about their renewable energy supply.
Green gases are renewable and low carbon gases that can be used in place of fossil fuels, reducing carbon emissions in the heat, power, and transport sectors.
Green gas can be produced via Green Gas mills in the UK, a way to make low carbon gas that can be used in our boilers. The main type of green gas produced in the UK is biomethane, with over 80 plants connected to the grid.
Green Gas mills are powered by anaerobic digestion, similar to a cow’s stomach: fed with grass and waste such as grass cuttings or animal waste as a fertiliser, harvesting the biomethane gas it produces and feeding into the grid. This also eliminates the need to use fossil fuel derived fertilisers! Green gas does not release additional fossil carbon into our atmosphere, and can save nearly 87% of greenhouse gas emissions compared to traditional gas in the North Sea.
Traceability certificates also exist within the gas industry, called RGGOs (Renewable Gas Guarantees of Origin), under the Ofgem Green Gas Certification Scheme.
The electricity system is shared, with decisions made at a governmental level. Ultimately, the cost of decarbonising is being shared between everyone in the country.
Therefore, while it is positive to switch to a green tariff and buy energy a company making investing in renewables, the key takeaway is to keep minimising your energy use all together via avenues such as energy efficiency measures, all contributing towards a reduction in your household’s carbon
footprint. Switching to a green tariff is only one of many steps you can take, and an easy place to start.
Reduced Carbon Footprint: Switching to a green tariff can significantly reduce carbon emissions, simultaneously reducing use and demand for non-renewables. Cheap electricity from renewable sources could provide 65% of the world’s total electricity supply by 2030, massively cutting carbon emissions and helping to mitigate climate change!
Support for Renewable Energy: Helps increase demand for renewable energy, encouraging further investment and development, helping decarbonise the grid.
1. 100% Renewable Electricity Tariffs:
These guarantee that all the electricity used is matched by purchases of renewable energy, ensuring zero carbon emissions from your electricity use.
2. Green Gas Tariffs:
Although they are less common, some energy suppliers offer green gas tariffs, where a portion of gas comes from renewable sources like biomethane gas.
Myth 1: Green Energy is unreliable
Reality: Renewable energy technologies have advanced significantly, making green energy much more reliable and its availability increasing every year. Many green tariffs are backed by guarantees ensuring a stable supply.
Myth 2: Switching to a Green Tariff is complicated
Reality: The process of switching to a green tariff is typically straightforward thanks to the Energy Switch Guarantee, automating the process for consumers and transferring without interruption. Energy suppliers manage most of the transition, making it easy for you to make the switch.