Millions of households are paying for green energy tariffs that may not be as environmentally-friendly as they seem.
Energy giant Scottish Power is now threatening to report its rivals to the advertising watchdog over concerns they are misleading customers.
And ministers are poised to launch a consultation later this year in response to calls for more transparency.
Green energy deals have soared in popularity as customers strive to do their bit to protect their planet
Green energy deals have soared in popularity as customers strive to do their bit to protect their planet.
Yet a third of the electricity supplied through tariffs marketed as ‘green’ is ‘greenwashed’, according to a new report.
This is where suppliers claim to provide ‘100 per cent green tariffs’ yet do not buy all, or any, energy from renewable sources such as solar, wind and hydro, research shows. Instead, they buy cheap certificates known as a Renewable Energy Guarantees of Origin Certificates (Regos).
Usually, these are sold alongside the green energy produced, but they can also be traded separately.
Providers say that by purchasing Regos they are matching the amount of green power generated with what customers consume.
But critics say energy suppliers should be more upfront about where that green energy they claim to provide is really coming from.
The worst culprits for ‘greenwashing’ include Bulb Energy, Pure Planet and Shell Energy, according to a report by consultancy firm Baringa in partnership with Scottish Power and Good Energy. It shows that as little as 3 per cent of the power supplied by providers is ‘genuinely green’.
Andrew Ward, chief executive of Scottish Power Retail, says: ‘Consumers are being misled by too many energy companies. Snazzy marketing cannot make up for the fact that lots of these tariffs aren’t as green as they might seem’.
More than half of energy tariffs available are marketed as providing 100 per cent green electricity.
Comparison site Uswitch has launched a new service that ranks green energy tariffs. Just one provider, Good Energy, has so far achieved a Gold rating, which means all gas and electricity is from renewable sources.
A Department for Business, Energy & Industrial Strategy spokesman says: ‘We want greater transparency in the energy market to ensure consumers can make informed decisions over their energy supplier’s green credentials. We are launching a call for evidence later this year.’
An Advertising Standards Authority spokesman says it is working with the Competition and Markets Authority to review how effective its rules are and will take proactive action against greenwashing claims to ensure its standards are fit for the 2020s and beyond.
A Pure Planet spokesman says its electricty is classed as renewable in line with watchdog Ofgem rules.
Bulb says it only uses certificates it knows support renewable generators in the UK. Shell says its customers can feel confident they are doing their bit to support renewable generation.
