Energy regulator Ofgem has announced plans to try to clear up confusion about green tariffs and their environmental benefits and given suppliers just two months to sign up to new guidelines.
Alongside the guidelines Ofgem wants to establishin an independent scheme by the end of 2008 to award gold, silver and bronze accreditation to green tariffs depending on the clarity of information and environmental benefits.
Ofgem chief executive, Alistair Buchanan, said: “With our revised guidelines we intend to shine a light onto suppliers’ green offerings to show the customer why a tariff is green. Suppliers must tackle customers’ scepticism by providing much clearer information about their green tariffs to customers, so they can easily understand the extra environmental benefits the tariffs provide – our guidelines will help them to do that.
“We also urge suppliers to move quickly to establish an independent verification scheme before the end of the year, and will work with them to do that. We want suppliers to stop re-packaging their existing environmental activity as green immediately and to align their marketing with our guidelines by September 2008.”
Under the Ofgem guidelines green tariffs would have to provide benefits to the environment above and beyond the contribution to renewables and carbon emissions reductions included in conventional tariffs.
|You are paying already for energy effiiciency and renewable measures so make sure you pick the green tariffs which really make a difference:|
Ofgem is concerned that some green tariffs are no better than non'green tariffs.
At the moment all electricity customers contribute to the costs of increasing generation of electricity from renewables and reducing carbon emissions – through a controbition of eight to 10 percent of their domestic gas and electricity bills.
A Ofgem statement said: 'Some green tariffs are simply a re-packaging of these existing customer subsidies, although many do provide additional environmental benefits. Under the guidelines the tariffs must provide benefits to the environment above and beyond what the current subsidies are delivering.'
The scheme will be initially voluntary, but Ofgem is reserving the right to make it compulsory through the electricity supply licence.
However, some within the industry are unhappy and claim green tariffs should only refer to products which invest in expanding renewable capacity and not those focussed on carbon off setting.
Dale Vince, Managing Director at Ecotricity, said: “OFGEM are greenwashing - avoiding the big issue, new renewable capacity.
“Putting in place a system that will ensure customers can't get real green tariffs - instead all they can get are 'green' tariffs where trees get planted and carbon gets offset - cuddly, stupid, off message and pointless 'green' tariffs.
“That's how OFGEM think they’re going to straighten out consumers confusion - redefine green tariffs as anything but investment in new renewables.'