The energy retail market has come under scrutiny following concerns about greenwashing, as revealed in the government’s response to the 2021 call for evidence on “green” tariffs.
The summary of responses from various stakeholders, including suppliers, generators, individuals, trade associations, consumer groups and the Electricity System Operators, highlights issues related to consumer transparency and the need for regulatory improvements.
In the consultation on green tariffs, a majority of respondents expressed concerns about the current approach of retrospective annualised matching using REGO certificates, stating that it lacks sufficient consumer transparency.
Many respondents pointed out that consumers were unclear about whether choosing a green tariff led to actual additional renewable generation, leading to confusion among consumers.
Regarding how green tariffs can be regulated to promote consumer-driven investment in low carbon electricity generation, only two respondents disagreed that significant reform was necessary.
The other twenty-four respondents proposed various suggestions – among the most popular suggestions were to establish a clearer definition of ‘additionality’ so that consumers could understand if their green tariff purchase contributed to increased renewable energy production.
Furthermore, several respondents argued that consumer choice could drive more investment in low carbon electricity if different types of REGOs were explicitly distinguished.
Simon Shaw, Regulatory Affairs Lead at Good Energy, said: “There is no question that UK consumers want to play a part in cutting the country’s carbon. Green tariffs should be a powerful way for consumers to contribute to renewable investment, but the current system is too confusing for the vast majority to understand how to do so.
“We now know that there is consensus across the industry that the energy retail market is rife with greenwashing, so it is disappointing that having kicked off this review nearly two years ago the government’s next step is another delay.”
