The UK government has initiated an inquiry into renewable energy arrangements amid mounting concerns about the level of “greenwashing” by huge energy companies purporting to provide customers with environmental benefits. The government stated it would evaluate how the renewable energy sector offers its green power rates to consumers as part of a crackdown as more people convert to renewable energy.
The business department warned that it would tighten rules to prevent companies from overstating the environmental advantages of their green electricity tariffs, a marketing tactic identified as greenwashing. The investigation would examine whether labels such as “100% renewable” or “green” were still fit for purpose. More than half of all new energy supplier arrangements now claim to come with environmental benefits, putting as many as nine million British consumers on green tariffs.
However, companies can now advertise their tariffs as “green” even if a portion of the energy they provide comes from fossil fuels, which industry experts worry could mislead consumers. Under the current laws, suppliers can obtain green designation in various methods, including promising to invest 100 percent of their customer’s revenue in creating renewable energy or making an agreement with an existing solar array or windfarm to purchase the electricity they generate.
Energy companies purchase Renewable Energy Guarantees of Origin certificates under a government program aimed to demonstrate to customers how much of electricity they sell comes from clean sources. When a supplier promises that its 100 percent renewable energy tariff is supported in this way, it indicates that it will provide certificates indicating the same quantity of renewable energy for each megawatt-hour of power used by its customers.
Experts have warned that the system contains flaws that might lead to the UK “double counting” its renewable energy production or even declaring foreign renewables as its own. The government has stated that it is considering reforming the Rego structure to make it “smarter.” Energy providers may also be required to offer consumers more information about their green tariffs, such as the kind of renewable power used, such as wind or solar energy, and where and when renewable energy was generated.
The energy minister, Anne-Marie Trevelyan, expressed worry that some energy businesses were exaggerating how ecologically benign their goods were. “Millions of families in the United Kingdom are choosing to become green, and renewable energy is becoming a bigger part of our energy mix. However, I want people to understand that when they sign up for a green tariff, they are supporting businesses that have strategically decided to invest in sustainable power. Part of that is guaranteeing that firms are as open as possible about where their energy comes from,” she explained.