HOW GREEN IS GREEN ELECTRICITY?

This article looks into green electricity and asks if this is actually as green as it is made out to be?

The good news is, that on the supply side the UK electricity system just recorded its greenest ever month in May 2020, with 0 coal burned for an entire month. Sunday 24th May was also the greenest ever day for the electricity grid. Both of these accomplishments were helped by record low demand, coupled with abundant wind and sunshine.

As you can see from the National Grid chart from Friday 5th June, in terms of wind and solar, the UK is able to produce more than 40% of its electricity from these two sources alone. This is a good thing and is a cause for celebration.

This is all excellent, but there are two things that I think do a disservice to the overall goal that renewable energy is trying to achieve. One is misleading marketing claims and the other is the murky world of renewable energy certificates (RECs). Both of these piggyback off of the good work done by others, without contributing anything positive for the environment.

Misleading marketing

I am singling Ovo out purely because there is a recent example of them being exposed. Please see here for more details. There are other providers who have been guilty of such claims in the past.

Regarding their standard rate tariff, this has been shown to have a higher carbon intensity than the UK grid average.

Then for their supposedly 100% renewable premium tariff, this allows Ovo to submit enough Renewable Energy Guarantees of Origin (REGOs) to the energy regulator Ofgem each year to cover that used by the consumer.

The only problem is, that for a £60 premium, only £1 goes to pay for these REGOs. Ovo also spend some money via the Woodland Trust, but it is not clear how much.

Unfortunately, what this means is that customers of Ovo are spending money on a premium product that does not support the growth of renewable energy in the UK.

Renewable energy certificate (REC) accounting

When a lot of people see that a company is claiming to have purchased 100% of their electricity from a renewable source, they would assume that they have a contract with a provider who matched their demand with an equivalent amount of renewable supply. Unfortunately, this is not the case and there is a significant aftermarket, where certificates are traded and the additionality can become weak.

For more information there is a great article on clean energy hub here.

The main problem stems from the unbundled RECs, as the link between the electricity and the renewable certificates is broken, making it open to abuse. This makes it very hard to verify whether the money being paid for the certificates actually led to the development of new renewable energy production.

What you need to know

This article looked into renewable energy and the green claims that surround this industry.

From a UK perspective, particularly wind power and to a lesser extent solar have been a great success story of late.

Low demand, coupled with abundant wind and sun has seen record after record broken. This proves that the technology does work at scale and can lead to real and meaningful emissions reductions at a grid level.

There are two things that I identified as being problematic. One was that of so-called green tariffs sold to customers which offer little towards sustainable outcomes. The other is the REC aftermarket, where certificates are traded and used to make claims of being 100% renewable energy, but where it is not clear this actually led to the development of new renewable energy generation.

Whilst the technology is both necessary and desirable, like with anything consumers and businesses need to do their own research to make sure what they are buying is actually sustainable.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below, or reach out to me on social media. What do you think needs to be done to encourage the development of more renewable energy?

 Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s