shire-dweller wrote: ↑Sun Jan 02, 2022 9:51 pm
Smitten wrote: ↑
So if the whole population in the UK moved to a green energy tariff everything would be fine and dandy and we would have 100% green energy because all that green energy would be produced somewhere, by someone, in an imaginary wind farm or solar farm?
Supply and demand, like Barbie dolls? If everybody in the UK wanted to buy Barbie dolls but there wasn't enough of them, then first of all, the price of Barbie dolls would go up, perhaps massively up, just to control demand. After that, production of Barbie dolls would increase quickly because the manufacturers would rather enjoy the large profit margins. If all UK households moved to a green energy tariff
at once, then obviously there would not be enough renewable supply to match the demand straight away. I imagine that the price of renewable energy tariffs (fixed price contracts, not subject to Ofgem's price cap) would go up a lot relative to non-renewable tariffs, just to control demand, and suppliers would have to stop accepting tariff switches towards renewable tariffs, as they could not get hold of enough REGO certificates. The price of REGO certificates would go up a lot, and the profit margin of generating renewable energy would go up a lot. Then, investment follows demand and profit margins. It might take a few years for brand new solar / wind / tidal generation projects to go live (with all planning permissions and such), but if that's what all UK households really wanted and if they were willing to pay a premium for it, then those projects would happen at a faster pace and without any need for government subsidies.
I understand the principle of REGO certificates as well as supply and demand. My problem is with the system. It is opaque, open to greenwashing and has a largely unregulated market in REGO certificates. This means companies that do not produce green energy or enough green energy can buy certificates to compensate and then market energy bought elsewhere on the open market as 100% green when the origin is not always certain or declared. When large corporations are loosely regulated they have a tendency to bend rules or break rules to suit profit. With a vast number of consumers looking to reduce their carbon footprint there is a lot of temptation. Scottish Power and Good Energy produced a report entitled “Come Clean on Green” in April 2021 which highlighted independent research that found one third of electricity marketed as green or renewable in the UK is greenwashed. The study also exposed providers selling certificate only energy which does not meaningfully benefit the environment:
https://www.scottishpower.com/news/page ... shing.aspx
As far back as 2019, a Which survey called into question the REGO Certificate system pointing out that Ofgem only requires companies to have the REGOs to match their customers use in order to legally claim that their electricity is 100% renewable. However, there is also a separate market where REGOs can be bought by anyone. Ofgem does not track or regulate the trading of these certificates. In my opinion this needs strict regulation if we are to trust REGOs and green tariffs.
It seems the government is also looking into this. In August of 2021 the Department for Business, Energy & Industrial Strategy announced a review into greenwashing in the retail energy sector amid concerns of overstatement of green credentials by many providers:
https://www.gov.uk/government/news/gove ... ty-tariffs
Quoting from the announcement “Energy companies are currently able to market tariffs as ‘green’ even if some of the energy they supply to customers comes from fossil fuels, as long as this is offset by purchasing enough certificates called Renewable Energy Guarantees of Origin to cover their customer base. These determine the proportion of electricity that they source from renewable electricity generation. Options being explored include looking at whether the system around these certificates needs to be smarter, as well as whether suppliers need to provide clearer information to households about their green tariffs, including type of renewable energy used (such as wind or solar), where the renewable power was generated and when.
The government is also publishing a separate call for evidence on third-party intermediaries in the retail energy market, such as price comparison sites, auto-switching services, and non-domestic brokers, with around half of households using them when engaging with the energy market. They currently operate outside of the retail market rules, and ministers will seek views on whether a general regulatory framework is needed.”
Once the system has been cleaned up I think we will all be able to buy green tariffs and believe 100% green energy claims with a lot more conviction.
And finally, I would just like to make it clear no Barbie dolls were harmed in the production of this response