Good Energy has continued its crusade against “greenwashed” energy tariffs, accusing rapidly-growing supplier Bulb of misleading consumers.
Bulb is one of a flock of energy market challengers which have attracted customers with their “renewable” energy, slick branding and digital focus. Launched only in August 2015, Bulb now serves 1.6 million households and was recently named the fastest-growing company in Europe.
But renewable supplier Good Energy says Bulb’s green claims are based on half-truths.
At issue is Bulb’s—and many other energy suppliers’—use of Renewable Energy Guarantees of Origin (REGO) certificates. These companies purchase electricity on the wholesale market, much of it generated by fossil fuels, then match that power with REGOs, purchased separately. REGOs cost just £1.50 per domestic customer per year, Good Energy says, and provide “effectively no value to renewable generators.”
Good Energy chief executive Nigel Pocklington writes in a blog post: “We believe that genuine green electricity means having direct contracts with the renewable generators, paying them a fair price for the power, and creating a market to encourage more renewables.”
These direct contracts are called power purchase agreements (PPA), and they give renewable generators a long-term income stream that allows them to remain viable and invest in more capacity.
Bulb says it does work with renewable generators directly. The homepage of its website states that “wherever possible, we have direct relationships with these generators to purchase their electricity.”
However, Good Energy has pointed out that the list of generators on Bulb’s website includes just 29 different installations, many of them small.
“Small scale generators need to be supported, but 20-odd of them can’t power 1.6 million homes,” Pocklington writes. He notes that Good Energy, with 260,000 customers, has contracts with more than 1,600 renewable generators.
Pocklington also notes that Good Energy’s recent report, published with Scottish Power and drawing on data from consultancy Baringa, revealed that Bulb is one of the “worst culprits” when it comes to greenwashing. Just 4% of the electricity on its green tariffs comes from renewable generators, with the rest bought from the wholesale market and scrubbed with REGOs.
Bulb claims that the percentage is higher. “We have enough PPAs with renewable generators to meet up to 40% of our members’ demand. We could reach this percentage on a windy day when our members’ demand is low,” its website states.
However, Good Energy rubbished this claim. “What Bulb is saying is if their 1.6 million customers all used much less electricity at the same time, and it happened to be very windy, they have enough PPAs to meet 40% of demand,” Pocklington writes.
Good Energy both matches 100% of its customers’ demand over the year with renewable power and aims to match it down to the half-hour.
“Through clever forecasting of customer usage and keeping a close eye on the weather, which has a big impact on renewable generation, we achieve this around 90% of the time. Meaning our customers’ demand is being matched to actual renewable generation, not just certificates, as closely as is possible, in real time,” Pocklington writes.
Bulb isn’t the only energy supplier Good Energy has accused of greenwashing. Last year it cast doubt on new energy giant OVO’s green credentials. OVO admits that it sources just 13% of its electricity from PPAs, but says it wants to increase the figure to 40% by the end of this year.
Good Energy and Scottish Power, which generates all of its own renewable electricity, have called on Ofgem and the Department of Business, Energy and Industrial Strategy (BEIS) to crack down on greenwashing by energy suppliers. The government and regulator should set minimum standards for what can be classified as green energy and ban tariffs that don’t use PPA-sourced electricity from wearing the label, the suppliers argue.
