Consumer group Which? has said that many energy firms that are claiming to provide renewable energy to their customers are actually misleading them. Which? discovered that several companies making such claims were neither generating their own clean energy nor buying renewable energy direct from other producers.
Instead, they were found to be buying cheap certificates that allowed them to make renewable energy marketing claims under existing industry rules. Which? found that it as 'just as likely' with the certificates that the energy was being purchased from a fossil fuel source via the general wholesale market.
Ofgem provides renewable energy generators - such as solar and wind farms - Renewable Energy Guarantee of Origin (REGO) certificates. These are produced per MWh of clean energy generated.
If suppliers buy their energy from the generator directly, they can buy the REGOs that go with it from 15p upwards per certificate. However, it is also possible to by REGOs separately without the clean energy, as these can be purchased freely.
Ofgem only mandates that customers hold matching REGOs to customer use in order to make 100% renewable energy claims. The regulator doesn't regulate or monitor certificate trading.
Which? has said that a greater degree of clarity is needed so that consumers can be clear on how green electricity is actually defined in the market and how it is marketed. It has accused some suppliers of 'greenwashing' tariffs and misleading customers in the process.
Which? assessed over 350 electricity tariffs over the summer period and discovered that 40 suppliers were offering 100% renewable energy tariffs. But some, such as Ovo, were neither generating it themselves nor buying it direct from renewable generators. Others, such as Shell, were topping up their direct purchases with traded certificates.