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Green energy suppliers granted temporary price cap derogations

Image: Getty.

Image: Getty.

A trio of green energy firms have been granted temporary derogations from the energy price cap, allowing them to charge above the determined limit on standard variable tariffs (SVTs).

Good Energy, Ecotricity and Green Energy all had electricity tariffs temporarily exempted from the price cap owing to how they derive all of their power from renewables sources.

The price cap, enforced by industry regulator Ofgem, came into effect from 1 January 2019 and essentially placed a limit on how much energy suppliers can charge customers of theirs on SVTs.

The cap had been the subject of much discussion in the lead-up to its introduction, and in February last year the government confirmed that green energy tariffs would be exempt to prevent the cap from penalising firms offering 100% renewable tariffs that are often more costly than legacy fuel sources, and to stop the price cap from having any negative impact on renewables investment.

However those exemptions are at the behest of Ofgem and late last week, the regulator confirmed that it had granted three such derogations to Good Energy, Ecotricity and Green Energy.

Good Energy’s Electricity SVT, Ecotricity’s Electricity and Electricity + EV, and Green Energy’s Still, Sparkling and Tide SVTs have all been derogated from the price cap until 31 March 2019, the same date the regulator’s first review of the price cap is due to take place.

Before that date suppliers will be eligible to apply for a permanent derogation, and it’s Ofgem’s intent that suppliers will be informed by 1 March 2019 if their requests have been accepted.

Juliet Davenport, chief executive and founder at Good Energy, said that long-term investment in renewables is required if Britain is to “kick its fossil fuel habit”.

“Derogation means we can continue paying generators a good price, establishing a clean energy marketplace. It also means our commitment to research and development, particularly home energy generation, is strengthened,” she said.


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