British authorities have caught energy companies in a hoax after they discovered that their marketing strategies were passing off a non-environmental product as fully renewable electricity. The government is developing new measures to regulate this market, writes BBC News.
Nine million British households have now switched to clean or green rates. However, some energy companies accuse their competitors of cheating and using marketing tricks to pass off dirty fossil-fuel electricity as green.
The U.K. Department of Enterprise, Innovation, and Craft is considering whether suppliers should be required to give clearer information about the energy sources used and where and when the electricity was produced.
Authorities are also mulling a decision to regulate intermediaries in the energy market, such as price comparison websites and auto-switching services, which are not yet subject to retail market rules. Analytical sites offer the consumer to compare prices and tariffs of different companies in order to choose the most profitable one. Auto-switching services allow transferring all control over electricity selection and payment to the service. The system conducts monthly checks, confirming that your rate is the most economical.
вЂњI want people to know that when they buy a green rate, they are investing in companies that in turn are consciously investing in renewable energy,вЂќ said Minister of Business, Energy and Clean Development Anne-Marie Trevelyan. She added that the new measures maximize the transparency of companies so that every family in Britain can be sure they are contributing to tackling climate change.
Electricity suppliers speculate on green rates by mixing renewable energy with the product of fossil fuels. Producers of green electricity have the right to trade certificates issued by a regulatory agency when generating energy separately from electricity. Therefore, suppliers can buy such a document without having to purchase clean energy along with it. With a certificate, companies often advertise their rates as environmentally friendly, but in reality, they do not supply the customer with completely clean energy, mixing it with dirty energy.
Each certificate costs the company only 1-2 pounds ($1.39 or $2.77, respectively) per customer per year, allowing it to sell green tariffs at an affordable price.
The U.K. is now actively reducing its emissions in order to achieve the overall 2016 Paris Agreement goal of completely eliminating greenhouse gas emissions by mid-century.